 Good afternoon and welcome back to the program on Y25. My name is Maxwell Waseek and this is a touch line that comes your way every Saturday. One to three we took you matasvoting disciplines, both local and beyond. And of course I'm still with Fred O'Penda, my guest co-host. Of course standing in this particular afternoon for Robert Osoro is not feeling very well, but a robust duo is joining us right now. Sami Muraya, sports journalist, has been here before he's not an unfamiliar face and so is Ngarwakamuya sports lawyer also joining us. And gentlemen, pleasure to have you one more time Sami, let's start with you. Of course we've seen the threats by sporting betting firms over their tassel with the government, with regards to taxation and yesterday a pronouncement last evening coming out of one of the leading betting firms, Port Pesa, indicated that they have cancelled the funding of all sporting activities in the country. And that means that you know entities like KFC Leipards, Gorma football club and football Kenya Federation that were sponsored by Sport Pesa have suffered a huge setback. First of all, my question is Port Pesa justified to have, you know, to have a tag of who with the government over taxation? Well, I'll start by saying thank you for having me and I'll go straight to it. We have two bulls here that are in the ring and both of them are mudding themselves and taking a very hard stand but unfortunately I think on these if you ask me whether Sport Pesa is justified I would say no because if it is true they've not paid taxes that they were supposed to have paid, then they know it's their obligation it's something they signed on when they started their company and we are looking at taxes that go back a whole five years. Shul they have actually tried to be hard right to KRA and ask them to allow them to pay these in installments. Other people are allowed to do so then that will have been a better solution for them but for Sport Pesa to pull out they've made so much money in Kenya over those years that they've been in Kenya and I know right now it's very difficult for you to pay over 50 billion in taxes because that again will run you to the ground because I'm very sure that over the period where they're being told they've not paid taxes the money has been used, the money has gone into other investments so it's not possible for them to be able to bring all that cash on the table so we have two people here who need to sit down and agree on the way forward because at the end of the day it's most of our teams that are going to suffer it's FKF that is going to suffer but then having sat here with Ngarua, I remember two months ago we were talking about alternative ways in which these clubs can be able to make money the federation should not be relying on a betting company to give them money that doesn't happen anywhere else in the world it only happens in Kenya, most federations always prefer being independent because when you have a firm that comes and pumps in most of their money in the league then it means they call the shots from legal perspective I know before we sign a contract in terms of sponsorship and entity you are cooperating, you are funding me we have an agreement, a contractual agreement so that there is no violation in between the sponsor did sign the contracts with entities that have been sponsoring FC Leipas, Goma, Fubo Club but at some point they were in Rugby as well, Fubo Kenya federation do you think these entities now that the sponsor has cancelled funding their sporting activities can seek legal address to address this for violation of contract? theoretically, yes they can seek legal address but practically I don't think it can happen and the reason I say that is to Sami's point you are in a situation where sport players or these betting firms are the ones who are calling the shots these guys are the ones who have been giving you money over the years and you don't want to lose that revenue because if you take them to court then guaranteed there is no way they are coming back to sponsor you why would I want to be sponsoring somebody who I am fighting in court so theoretically, yes from a contractual perspective, yes there is a way that they can be able to seek legal address but practically I don't see it happening and just to bring in another point you haven't asked me the question but just to comment on what you asked Sami about sport pressure being justified my opinion is that they are justified and the reason I say this is the laws that have been prescribed for this gaming industry are things that were addressed by both parties last year when sport pressure pulled out now I understand where sport pressure is coming from when they were saying that you've hiked the tax winnings from 7.5% all the way to 35% instead of guys sitting down and talking they sat down, they talked and they said okay fine 20% is going to be born by sport pressure or the betting firms and then 15% is going to be born by the winner the person who takes it now what guys don't understand is what this tax is on this tax is in what's called net winnings if 200 million shillings has been bet over the weekend or in one day and of the 200 million shillings 100 million shillings is winnings you take the difference the difference in this case would be 100 million if you take the difference that 100 million is what's supposed to be taxed at 20% now here is something very interesting I did a lot of research about the time when sport pressure were pulling out and I talked to very many people at the authority and this is what they say these tax that we are all complaining about the 20% has been prescribed by something called the betting gaming and lotteries act as far as carry is concerned that is not one of their acts their act is the income tax act VAT act, tax procedures act, customs so it's not a tax prescribed under their act if it's not prescribed under their act carry's argument is for all intents and purposes this is considered an expense and if it is considered an expense then sport pressure have the right to claim it at the end of the year and I think section 15 of the income tax act and I think those are the loopholes that sport pressure have been using and that reduces their tax obligations of course is the issue of sponsoring sports section 15 again of the income tax act the money that you use to add sponsoring sports is an allowable reduction so are we looking at all these things before we start blaming sport pressure about the tax that they haven't paid because to me it looks like it's a political witch hunt those that carry are trying to raise money in all matters possible and it's not happening there are very many loopholes that they've created in the law and sport pressure are using it or the betting firms are using it so I don't think it's right and I know where sport pressure sphere is coming you are being taxed this money that's supposed to be going to a lottery that's supposed to be funding sports what are the chance there's been a sports budget in the last 3-4 years even before that came into play friend of mine the government getting opportunistic you know capitalizing on a situation that there is an already existing sports fund which will cater for any void left by sport pressure we've been bankrolling several sporting activities in the country I remember ever I visited the country cutters of sport pressure and you know several arguments with regards to whether sport pressure really contributes to the growth and development of sport or its PR exercise I don't know I'm just going by the thoughts on the street but is the desperate situation of Kenyan sporting entities also affected as to why sport pressure should issue threats to the government actually it's not a threat this is business if I'm not making money why should I sponsor you because they've closed their pay bill numbers for a month or so so I'm not making money why should I sponsor you continue sponsoring if I'm not making money right now there's no need of continuing sponsoring and as Ngarwa said we had that sport budget before even sport pressure came in what has it been able to do it has been able to do a minimal it has had a minimal impact on the sport industry but once sport pressure came in you see it's sponsoring teams gore, FC, the Premier League and rugby at some time for them to say that they are pulling out they are very very much justified to the point and Sami if I may ask Keare is saying that sport pressure has not been paying tax for 5 years question arises where were they because they didn't need these taxes every year I think where was the government when these people were not paying taxes for 5 years they may issue tax compliance exactly they may issue tax compliance granted yes Keare has a mandate and they can go back and say okay fine we think you guys did not pay XYZ and we are raising assessments but I think it's very drastic in the way they are going about it you raise assessments sport pressure says they dispute and they say you know what no us guys will be paid all our taxes that's why you have the tax appeals tribe when you start grinding their business to a halt then it looks like there's something that's coming that's behind and you know the reason they use is this religious angle that we are what's the word our youth shut down all the casinos in this town shut down all the casinos in this town if that's what you're going to be saying before you ask me a question and my question is why is it that it's only sport pressure that is crying out at the moment and I know Bettin as well is also affected and they actually even closed the Kenyan website this week and that's an international Bettin has sport pressure so I have the biggest market so when you start saying about taxes of 5 years that's a whole lot of money and this is why they are complaining you should have allowed me to finish because then you will have not what I want to say because this is me throwing aspana in the ones agreeing with you in a way because we also need to figure out who owns the other Bettin companies because there is talk that some of them are politically owned and that's all I was asking so why just sport pressure and Bettin because those are the two biggest companies that we had in the country and why I like the fact that you cited the laws of what is happening because at the end of the day then they are just beyond going to legal redress or going to court there is always mediation and some of these processes are processes that allow for mediation allow for arbitration to come in and people talk and agree on some of these issues so why is it that all of a sudden we are seeing some companies that are thriving out of the silence of the two giants I don't want to name them but there is one that actually even launched a mega jackpot for 100 million this week and one of the ones that were never closed down at any point even when we had the threats to around 20 companies there are some that were never mentioned anyway so I think that's where we also need to query as much as I might say still sport pressure is still obligated to pay tax I'm not going to defend them but it has to be done in a just manner so let's not also have this blanket feeling where we feel that he is trying to overshadow the other or I'm twisting the other both of them are at fault at this particular point the stand taken by CS Matiangi not a very wise one we know him as a tough talker yes but then is even the right person who should be questioning some of these things because Matiangi is interior minister so is he the right person to be doing this does that fall under his docket we know he is the super CS but then who exactly should be decrying the whole issue about nonpayment of taxes we should be hearing it directly from Kiare the angle that interior using is that very many of the guys who are running this companies are here illegally and that definitely and some of them were deported and that falls under his docket if there is somebody who was a white boss it's interior they can use whatever they want to use to make their point and I think that is exactly what's happening in this particular case it's unfortunate like I'm saying granted these guys have used loopholes and it's business, it's everywhere in the world it happens, there are loopholes at the law the law is designed to have loopholes and if I'm sharp enough to use those loopholes then you can't fault me I mean you guys are the ones who make the laws so you can't fault me there is also another argument I've seen various arguments both on social media platforms and even on the streets football followers most of them Kenyan arguing and there is another one that indicates that how come Sport Pesa haven't cancelled the sponsorship of overall entities like Everton like Formula One Tanzanian sides like Simba yet their most fun base comes from Kenya a lot of baiting enthusiast I know there is a time Kenya was mentioned in a UK parliament on issues baiting but remember if Sport Pesa is still making money in the other markets they will still continue sponsoring them they will still continue sponsoring them but if Kenya we are not going to give them that avenue of making cash then trust me even closing shutting down the Kenyan market they can do it and venture into other markets Are you using Kenyan revenues to allow me to comment on that about 2-3 months ago I attended a sports law conference this guy I forgot his name I think it was at the theatre exactly he has a very complex Spanish name he was a lawyer who did the name deal 198 million euros and he is a big time in Spain and in Europe generally and he made a comment because there was a panel session afterwards that had chairman of the sports tribunal John O'Haga Rosalind Simi and a couple of lawyers and there was a discussion and they said what do you think about baiting and its effect on sports and the Kenyan people were saying these are the future leaders gambling is a bad habit if you ask me very funny excuses and I wanted to ask especially the registrar of sports if you said the future leaders do you know who the president of Liberia is George Ware how did George Ware become president would he have become president if he never had chance through sports no anyway I gave up so we got back into the main story and this guy said what was his name is it a rumor is it lies that half of the revenue generated by European leagues is from baiting it's not a lie half of the revenue generated by European clubs is through baiting so why he said this is what you should do you shouldn't ban baiting but regulate it exactly and like we were talking of here the framework and the regulations and the legislation is there these are nijak reactions that don't make sense these are nijak reactions that don't make sense baiting happens everywhere in the world it happens everywhere in the world I just don't think that we are harming it right when you talk about regulation because at the moment the people that are basically doing regulation are BCLB and from the way they are doing it you can literally tell that it's like this was a big thing that they never expected unfortunately because look at the way BCLB was set out in the past and even in the act the act itself has not been reviewed it's still the same old act they were literally dealing with I'm trying to remember that company that used to scratch their cards or what is charity sweepstake they were literally set out to regulate charity sweepstake and another there was another one called something Toto Toto 6 those were the two companies so then also now taking in all these many companies that have come in they needed to they need to actually amend their act they need to look at how they can be able to accommodate the changes one in technology the changes in how betting has actually taken a new life because that's exactly what is happening and until that happens the same problems because at the end of the day if we have a regulator in BCLB we should not have government interference because regulators are supposed to be independent as much as they are under exactly independent of the government and you see let me use an analogy I think 4 years ago Kenya changed their company laws we were operating under their cake company laws from independence we stopped operating no, there were just amendments happening every day to the law to tweak and to adjust to what is happening in the economy and that's what I think should be happening you shouldn't shut down completely and say okay you know what we need to start legislation we need now to start doing up the regulations so we'll shut you guys as us guys work on the legislation I think it's something that should be systematic you've started with the taxing you've already done with the taxing you've started with the legislation to beef up BCLB and to give them more powers to handle this thing like I'm saying there's nothing new under the sun it's happening in the west it's happening in the east I guess because China is also becoming a very big market for sports these benchmarking tours that MPs go for what are they for if you cannot go and learn what is happening in other countries and come and implement it in Kenya so they just it's a kneejak reaction if you ask me and just find their conspiracy theories and he said she said but you can understand when Sami makes a comment that he's making that this looks like there's something that's happening behind the scenes I know corporate confidence is also an integral part when it comes to funding these sporting federations and several corporates have shied away coming to bankroll Kenyan sports in industry because of lack of transparency those who are in child sporting administrators managers and value for somebody's money is an aspect maybe sport pesa while pumping their money into Kenyan sporting industry they have also been gaining it's better and it's reciprocative but even as we argue that much revenue that is generated in european football comes from betting companies is it wrong to fund sports particularly in Kenya because much fixing is also it comes out as we said betting is also a business generally it's business so it's not wrong for a corporate like sport pesa to come out it's kind of a corporate social responsibility I'm getting money from this market this is something I can give back so it's not really wrong actually better for the sporting industry maybe not even the sporting industry there are some things other things that they can do water projects maybe do some projects in the northern parts of Kenya irrigation some of those things but for sports it's only for it's good because it's for marketing it's appealing for the market it's appealing because most of the betting guys are into sports but there are some other things to be able to do outside sport so let them come in and as Ngaru is saying as Murai is saying sit down and see what we can do not having hard stances on both parties because now as Murai is saying we are having two bulls that are fighting and there is none of them that seems to go down and backtrack and see where did the ring start beating us so it's all about them coming to the table and sit down and laying down the framework of how we can go on with this gaming industry the two of you we've had this particular discussion several times and have been contacted by the way by various federation officers who are asking me come on these guys you bring on the show what they say looks like you know it's a viable thing but is it practical or it's just analysis so the way forward on sports funding now that sport as terminated it's contract with you know funding activities in the country federations, associations, clubs and teams what's the way forward are we going back to being serial beggars exposing our bulls and trying to seek well-wishers and good Samaritans coming on board to support us when we know very well that that's not self-sustaining well the biggest problem we seek is relying on one source of revenue for most of one are federations and two for the clubs and teams and also just other individual sports where we actually seeing most of these betting companies putting in their money the reason why sport pesa has been putting the most money in sports is because they've been here the longest and we could identify with them as Kenyan until when these problems started coming in and we realized it was not Kenyan at all I think from the word go we always knew it as a Kenyan company so what the federation needs now I'm talking about the football federation boxing federation who's been funded by sport pesa before and the clubs that you've mentioned you're talking about Gohorma here talking about AFC Leipards look for other sources of revenue there's a reason why you have a team and I'm sorry sometimes I give examples of Manchester United not because I support them but because we have a director we have the CEO there Ed Woodward whose main focus is generating income he doesn't buy players he doesn't he just thinks about which noodle exactly which noodle company can come and sponsor us which one company can come and put in some money Rangia viatu that's the thing which beer we have as in that's one thing that has an official breakthrough of the team sponsor for literally everything including cutlery that they use so I think that's the way we need to go as Kenya because sport is a big industry we have the funds and we just need one of the questions that we always ask is the people who consume sports can't they be able to support sports and the answer is yes they can so it's all about being able to brand ourselves in such a way that is more accommodative to them and the reason why sometimes I look at rugby for example because you and I love our rugby the reason why money is not being pumped anymore is because yes we have the fund base yes we had teams that were doing very well we had a very national team that's the 7th team that was doing very well the 15s also started rising but the corruption within the federation itself cannot allow corporates to come in so we just need to rebrand we need to sit back look at ourselves internally and ask ourselves questions and just brand ourselves as something that is viable as something an entity that is above board and that way we will be able to literally attract anyone that we go to but if you ask me evals government in this whole sport personal situation this is what I would be doing fine there's a contentious issue you're saying that these guys haven't paid 50 billion in taxes over the last five years and there's a possibility there's some tax there that they actually haven't paid now you sit down you mediate and you say you know what okay fine granted we'll knock off let's say it's 30 billion shillings but don't pay the 30 billion to us our work is what is infrastructure our work as government is infrastructure so you guys do this we are going to give you rebates and we are going to give you concessions in various things but you guys use that 30 billion to construct infrastructure in this country sports infrastructure so put up stadiums and modern stadiums do that stuff all over the country and then ask guys 30 billion is a lot of money for putting up stadiums we don't need big stadiums so put up a stadium you already have a football stadium in kasirani put up modernize the basketball gyms you know that's what you do in terms of infrastructure you guys can have the naming rights and the guys I see who do it very well Emirates you know they take up a stadium and they have the naming rights for about 5-6 years and they really soup up the joint and the joint looks very nice so you know the way I would be looking at it stop holding these guys and telling them you know what you have to pay this 30 billion to carry no one of your work or one of the responsibilities you have as government especially from a sporting perspective is to put up the infrastructure now that 30 billion I'm sure they want it to go to carry for other things no so if we agrees but we find the tax you guys must pay 30 billion will give you concessions will give you rebates will make it good for you guys will make it easy for you guys but there's a condition this amount that you have to pay taxes in the last 5 years channel it into the development of sports well that's a very good idea we are talking about personal interests because infrastructure I think all of us have seen what Paul Kagan has done in Rwanda the basketball facility that will even be hosting NBA finals that's a big plus with regards to growth and development of sport because infrastructure is a key because we all remember that Kenyan missed out on hosting because they were not ready preparedness readiness in terms of facilities we weren't ready so it's the key as well and the one time we were ready we had ended up hosting there under 18 world IWF and it's coming back to Kenyan next year like you're saying and it's not hard we make it look like it's a monumental task it's not hard we have a Nyao Stadium that was supposed to be complete in December of 2017 till today we're still hearing stories about when it will be complete it's all about personal interest kukakula tried what you spoke about in terms of what Nyao Stadium is doing but because some people's palms were not really well greased it became an issue Safarikom did it at Kasarani and you remember Kasarani looked good for about 5 years so it can we just have like we were talking of we have guys who are leading sports who are very a cake in their thinking they're still they don't look at it like a business they don't look at it from the perspective that if you grow the sporting industry you can imagine the amount of jobs you create remember like you're saying you need a business like at Manchester United there's a whole business development team you need marketing guys you need finance guys you're creating employment think about even in the team itself you're creating jobs as coaches you're creating jobs as doctors you're creating jobs as trainers and all this stuff I was looking at the football team in Atlanta I forgot what it's called but anyway they poached the guy who was the corporation secretary at the company secretary at West Brom to be a director and remember thinking to myself as case finished law school you only thinking about law firms you can actually get a job in an institution like that which is can imagine how interesting it is working in such a team we were talking Ed Woodward is an investment banker the only way he got into Manchester United is because he structured the deal for the Glacier family so there's a lot of jobs to be created we just have people who sit on their backsides in the office and do absolutely nothing and they just don't look at sports as a business because the template is there this is a matter of implementation so sports is big it's so huge it's massive it's big and for government you only need to show them one thing if you guys do this thing the right way you're creating jobs that is pay those are taxes you are getting if you promote this industry because these things will have to be run as corporate organizations that's corporate tax coming into play there's so many things there's dividend income it's so many there's so much money the government can make from it I remember there's a question I saw just before we went on there whether sports should be part of the big four or five and I was saying sports should actually be number one or number two if you look at the way sports was designed back in the early 90s and in the 80s we had olympic sports centers we had youth centers literally I remember back then if you come to Nairobi there was a Shawry Moyo social hall there was Pumwani boxing was heavy boxing was very heavy you go to the Mta Jericho there's a pitch there you go to Zewani there's a pitch as in we had a government back then that already knew the importance of investing in youth and investing in sports unfortunately we have a government now that knows the importance of that but then they prioritize other things above sports and a government that keeps on talking about youth employment and like Ngaruwa says that's the easiest way in or seeing our girls who are playing in Israel saying they went to play a sport without kids and what happened is they played the Israel team and then when now they went to support the Israeli team these girls felt sorry for them and they gave them kids free of charge so that is the problem that we have as in we are literally getting teams that are coming up here going out there to represent a whole nation and then they are getting donations because the government itself is not supporting them and once the government invests in sports even the corporates will do it very easily they did with the national team around the stars in Egypt is that sufficient and do you think that is the way actually that's not the way they should go on sports not just an occasion because we have qualified for the African cup of nation it should be a daily thing these are frameworks that should be laid down from the start long term policies not that when we qualify for the Afghan is when now they come out supporting the team actually if they are supporting the team from the start they do not need to do that when we qualify because the team will be sufficient because basketball the morans did exceptionally well tremendous performance in Bama Komali during afrokan basketball championship finishing as runners up without proper funding from the government poor preparations because of lack of I am almost certain I am almost certain that the policies are there but the problem is implementation that has been the biggest problem in this country implementation I know it's a different story but just to show you what the problem is I was having a chat with somebody who served in the kibaki administration and he used to tell me that kibaki used to walk into meetings and tell them you guys think I'm doing magic all I'm doing is just implementing things that I drew up in the 70s so the policies are already there execution of these policies and I'm almost certain that these things are there because people are not stupid I mean government has some of the brightest brains we have in this country I don't think people are stupid I just think it's a case of number one we in the sporting fraternity still have that serikari sa idea mentality we depend on handouts we don't want to see when you sit down and pitch to guys ideas as to how you can revolutionalize sports and make it a business first I'm sure you have to be buying them drinks what do you have some of you are saying that the problem is that we who sit down and have seen this roadmap and can put these plans down unfortunately maybe don't have the financial muscle that some of these guys have so you will buy into my idea you as the electorate you will buy into my idea you will know definitely that this is the guy who can bring in the money but just because he is not gracing your hands for a vote you are not going to vote for him and you are going to vote for him now if I could because I was going to talk about the way forward as a sports lawyer I'm tasking you with the responsibility one we've sat here we're talking about a sports fund we will always talk about it how much money is in that sports fund as a lawyer why don't you use the access to information act to get the information so that we can we need to know how much money is in the sports fund how much has been used back in sports because we never hear about that sports fund we know that there is a board that was appointed and appointed and they are supposed to be let me form a vice president I've never seen him since his appointment exactly I've never seen him since his appointment so I'm tasking you with that responsibility but you know there's already a tassel as we speak because the sports fund is actually under the ministry of sports ideally it should be under the ministry of sports treasury wants it treasury wants access to it now so there's already a tassel there if there's somewhere that's used to channel money it's a sporting industry and unfortunately we just have people who don't see the long term vision we see people who've made money of sports we have guys and especially I hate this argument in the rugby fraternity in our days we didn't have money does that give you the reason to steal now no it does not but there are very many people in the sporting industry who use that as an example so it's time yes for us guys to start but let me tell you it's not going to be easy because you're going to be hit left right hand center because you're coming to break a system that has benefited a few we have an act that supports you now the access to information acts literally mandates them and they're not supposed to be they're not supposed to be any secrets as far as disclosure is concerned it mandates them but let me tell you before you get that disclosure the red tape you're going to face that's why we have the CAJ the ultimate protectors you have it in paper practically is it possible thank you gentlemen for coming to help us in a soba objective and exceptional discussion on the way forward as far as sports funding funding is concerned in the wake of sport pressure one of the leading dating firms cancelling the sponsorship of all sporting activities in the country with regards to the tassel they have with the government it's been a pleasure having you probably shall be looking forward to see how that pans out and keep an eye on the development and see probably there is a way sport pressure can rescind its decision to continue funding sporting activities and bring the likes of United Morayas team in Kenya to play again Shaban FC yes we are coming up next with the pans on and last night Liverpool beat Norwich City 4-1 and let's watch the highlights before we discuss international football transfers and European leagues in general