Sportpesa's Shadowy Bulgarian Backers Are Betting Big On Football In Kenya And Beyond

Kenya is experiencing a surge of interest in sports betting, with a number of companies coming up. Kenya's Betting Control and Licensing Board (BCLB) estimates that as at March 2016, at least five million Kenyans engage in betting on a regular basis, meaning they make a bet at least.

Since 2013, a number companies have emerged to compete for a share of the multi-billion shilling industry. At present, Kenya has 30 licensed betting companies, 10 of which operate online platforms.

Perhaps the most visible of these is Sportpesa, whose estimated active customer base is up to two million. Sportpesa's parent company is Pevans East Africa, which started off by announcing a KES400 million investment in February 2014 that saw the introduction of booths on the streets of Nairobi where users could place their bets, along with a mobile betting service.

Sportpesa has signed lucrative sponsorship deals with clubs in the English Premier League, becoming the official betting partner of Southampton FC, former club of Kenya's national team captain Victor Wanyama, and London’s Arsenal FC, which has a significant fanbase in Kenya, for an undisclosed value.

In July 2016, Sportpesa and Hull City Football Club announced a multi-million pound partnership amounting to KES 450 million annually for three years, which will see Sportpesa's branding on Hull City’s home and away kits for three seasons. Hull City will also travel to Kenya for a game with a Kenyan select side in the country’s top tier league.

Not bad for a company that's been in operation for less than 5 years.

Local Sponsorship deals

In Kenya, Sportpesa has signed a number of deals with various sports associations, the biggest of which is a KES 607 million (US$5.9 million) five-year sponsorship deal signed by Kenya Rugby Union, the biggest in Kenya’s sporting history. In football, Sportpesa signed a four and half sponsorship deal with the Football Kenya Federation expected to run until the end of 2019 season, the value of which is in the region of KES 450 million (US$4.4 million).

Sportpesa also signed sponsorship deals with two of Kenya's most popular football clubs - Gor Mahia and AFC Leopards - for KES 325 million (US$3 million) and KES 225 million (US$2 million) respectively. The company has also entered a stadium sponsorship deal of KES 100 million that will see Nairobi's City Stadium renovated and branded with Sportpesa livery.

Other undisclosed sponsorship deals include the Super 8 league, Nakuru All Stars Football Club, Extreme Super 8, EFC Charity Basketball, KBC Rio 2016 Olympics Broadcast among other deals.

Questions have been raised by a number of Kenyans on the operation of the betting firms, others even calling for the cancellation of the operating licenses by these companies. A motion to this effect is currently in Kenya's parliament, put forward by the majority leader of the National Assembly Aden Duale, questioning the eligibility of betting firms in Kenya.

The Bulgarian Connection

Sportpesa's Kenyan owners include businessman Paul Ndung’u, who owns 17 per cent stake in Pevans East Africa, Chief Executive Officer Ronald Karauri, who has a six percent stake, and Wacera Maina, who owns a stake of 21 percent shares through her firm Flint (EA).

Ms. Maina has had previous involvement with betting and gambling in Kenya, having run the Shinda Smart 90 million in 90 days promotion in 2010.

Pevans East Africa is majority owned by foreign investors, among them Guerassin Nikolov, Valentina Nikolaeva Mineva and Ivan Kalpakchiev from Bulgaria. Also on the list is American businessman Gene Grand.

Gerasim Nikolov and Gene Grand own a combined 42 percent of the company’s shares with each of them taking 21 per cent shares. Valentina Nikolaeva Mineva has a stake of three percent.

According to Bulgaria’s National Security Agency (DANS) Gerasim Nikolov is involved with several Bulgarian gangs involved with credit card fraud. Nikolov has been investigated over claims of racketeering and credit card fraud, and he turned from co-accused to witness in a case involving another criminal nicknamed “The Baron” for the hijacking of 14 Serbian trucks and their drivers for ransom.

In March 2014, Slavi Binev, a Bulgarian Member of the European Parliament (MEP), visited Kenya in his capacity as Deputy Chairman of the Parliamentary Assembly of the European Union for relationships with Africa, the Caribbean and Pacific states (ACP).

It is on this visit that Binev met with Nikolov and lauded the launch Sportpesa, which was quickly becoming one of the largest companies in the sector.

Binev himself had been one of the main shareholders in R – System Holding AD, which has ties in the service, entertainment, construction, investments and security industries, and was named as the 34th most profitable company in Bulgaria.

Slavi Binev is close friends with Nikolov, whom he introduces as a longtime friend in a YouTube video.

“It is very unusual for a politician to maintain old friendships. But I value my friendship with Gero, Genata and the whole team. I am very proud that Gero, who is one of my best friends, is the engine of this team,” Binev is quoted as saying during the official visit to Kenya.

Sportpesa has been able to muscle out their competition, as was seen when rival betting company Betway entered a KES 10 million (US$98,000) deal in February to sponsor AFC Leopards, only for this deal to be cancelled a month later in favour of a KES 45 million deal with Sportpesa.

While Sportpesa's meteoric rise is questionable, the betting industry in Kenya is growing at a pace that some would find worrying. While the amounts of money the company is willing to pay are questionable, it's clear that the company is not afraid of digging into its deep pockets to secure its operations in the country, making billions while hooking Kenyans into a get-rich-quick fantasy.

Cover Photo via Hull City FC

Kenneth Odero

About Kenneth Odero

I tell stories that bridge cultural gaps among people through my writing, and I have a keen eye for news and analysis. Contributor at iAfrikan

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