Everton’s sponsors are hailed by the club for supporting community schemes, but there are concerns about how the Kenyan-Bulgarian firm profits from an online gambling craze

Barely heard of in Britain until it launched a spree of Premier League club sponsorships in 2016, the online gambling platform SportPesa has since spread its name across football, rugby, horseracing and Formula One, associating its branding with good works in Africa. At Everton, where SportPesa is the main sponsor, its name is prominent all over Goodison Park, the club have been in Kenya for a pre-season tour, and they promote SportPesa’s “Kits for Africa” initiative, with a donation bin in the club store.

Everton’s chief executive, Denise Barrett-Baxendale, wrote in the club’s annual report: “We value our developing relationship with SportPesa, who have demonstrated a strong alignment with our values.” A spokesperson for Everton, who describe themselves as “the people’s club”, said Barrett-Baxendale was referring to the sponsor’s support for the club’s extensive community work, which she herself pioneered in the deprived areas around Goodison Park.

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Founded in Nairobi as a partnership of wealthy, politically influential Kenyans with Bulgarian investors, SportPesa mined its huge fortune exploiting an online gambling craze in the east African country. Kenya’s interior minister, Fred Matiang’i, warned recently of rising addiction and suicides, adding that gambling will “destroy the moral fabric” without strengthened regulation.

In the UK, while SportPesa has promoted its brand through the Everton sponsorship and partnerships with Arsenal, Southampton and Hull City, it makes use of the “white label” system, allied to a company, TGP Europe, registered offshore in the Isle of Man, a tax haven. This structure, permitted by the UK government, means SportPesa does not require a licence from the Gambling Commission, UK bets are paid to the Isle of Man, and no SportPesa company appears to pay UK corporation tax on those revenues, nor contribute to UK gambling welfare programmes.

Campaign groups including Gambling with Lives have criticised the English football establishment for selling its appeal so enormously to gambling, with many Premier League and Football League clubs – and the EFL divisions themselves – sponsored by betting companies, and concerns are escalating about problem gambling and the game’s “gamblification”.

SportPesa grew rapidly in Kenya to dominate online gambling by zealously exploiting the mass arrival of mobile phone technology from 2014, and sponsors the country’s Premier League. With little regulation and no welfare or research similar to even the UK’s limited industry-funded framework, serious problem gambling appears to have become entrenched among Kenyan young people, who are gambling and losing far more than elsewhere in sub-Saharan Africa.

Matiang’i, finally proposing new regulation in May, said $2bn was gambled annually in Kenya, mostly by low earners, and that 500,000 young people defaulted on loans to fund gambling. Last week SportPesa was among a number of gambling companies in Kenya whose licences were suspended because of reported concerns about non-compliance with regulations, although SportPesa said it did comply and is continuing to operate because of a court order.

Facebook Twitter Pinterest A gambler in Nairobi uses his phone to access SportPesa’s website. Photograph: Thomas Mukoya/Reuters

Ivaylo Bozoukov, SportPesa’s director of global strategy, told the Guardian that SportPesa’s expansion into the UK, which includes offices in Liverpool’s Liver building where Everton are also based, was funded by the profits made in Africa. Well-placed sources have told the investigative website Finance Uncovered that SportPesa made more than $1bn revenues last year in Kenya, but the company does not make its revenues or profits, in Africa or the UK, public. A spokesperson described that figure as “a very significant overstatement” and said: “As is common with private companies, we have made a commercial decision not to publish our revenues in order to protect our competitiveness.”

SportPesa does have a UK-registered company, SportPesa Global Holdings, formed in March 2017, which does declare its shareholders and accounts, but the brand’s structure means that its UK gambling revenues do not appear to be received by that company.

The holding company’s largest Bulgarian shareholder, Guerassim Nikolov, a casino owner, moved to Nairobi in 1999 from Sofia, where he operated a casino, and he founded SportPesa in 2014. Described as the group chief executive, Nikolov wholly denies claims made in Bulgarian media in 2006 that he left the country after being questioned by police in relation to an alleged criminal incident.

Asked by the Guardian about these claims, a SportPesa spokesperson said: “Mr Nikolov vehemently denies the allegations contained within the stories you have highlighted to us and we strongly urge you to treat any claims – most of which are made in personal blogs and by anonymous sources – with extreme scepticism.

“Mr Nikolov has non-operating interests in casinos [ie he is not involved in the day-to-day running of them]. Mr Nikolov has passed the know-your-client checks of regulators in several jurisdictions including some of the most rigorous authorities around the world.”

Nikolov and other Bulgarian investors are said to have provided the gambling and digital technology expertise in the partnership that founded SportPesa. The largest Kenyan shareholder is Asenath Wacera, whose late husband, Dickson Wathika, was the mayor of Nairobi and a long-term friend of the country’s president, Uhuru Kenyatta. Paul Wanderi Ndung’u, another major shareholder, is a prominent entrepreneur in Kenya, having invested early in mobile telecommunications, and he is a major financier and fundraiser for Kenyatta’s Jubilee party.

Facebook Twitter Pinterest Kenya’s president, Uhuru Kenyatta, reversed a pledge for a 35% tax on gambling. Photograph: Yasuyoshi Chiba/AFP/Getty Images

In June 2017 Kenyatta reversed a pledge for a 35% tax on gambling to fund sport, arts and universal healthcare after relentless lobbying by SportPesa and other gambling companies. Instead, after his November 2017 re-election, the president introduced a 15% rate, while imposing a 20% tax on individual gamblers’ winnings, explaining this was “in order to enhance equity and fairness”.

Kenyatta’s spokesperson did not respond to an inquiry from the Guardian about whether the lobbying from SportPesa or the gambling industry had an impact on his change of stance. SportPesa responded by saying: “Our growth is attributable to outstanding customer experience and we refute any suggestion that the company has sought advantage through political connections.”

SportPesa’s use of the UK’s “white label” system, in common with many overseas-owned gambling companies including several more Premier League sponsors, is noted in small print at the bottom of its alluring UK website.

“SportPesa is powered by TGP Europe Ltd of … Douglas, Isle of Man,” it notes. “TGP Europe Ltd is licensed and regulated by the Gambling Commission of Great Britain for provision of services to the United Kingdom.”

The system means TGP Europe provides the actual gambling operations for SportPesa and other companies marketing themselves in the UK. The money supporters of Everton, Arsenal, Southampton, Hull City and other British people bet through SportPesa’s app and website appears to be actually paid to TGP Europe in the Isle of Man. SportPesa, as a non-licensed company, also has no responsibility to contribute to GambleAware, the UK industry-funded organisation providing welfare and education about problem gambling. A voluntary code is applied by companies to donate 0.1% of their gross gambling yield, but GambleAware’s list of 2018-19 donors revealed that TGP Europe contributed only £100.

The SportPesa spokesperson said of this minimal contribution: “We share your concerns about this and raised the issue with TGP directly. As a result, they have now agreed to increase their annual contribution to GambleAware to £10,000.”

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SportPesa’s spokesperson said TGP is responsible for betting duty payable to HMRC on UK bets, but did not respond to a question about whether SportPesa pays UK corporation tax on its profits.

Isle of Man-registered companies do not pay UK tax or publish financial accounts, so there is no available record of how much money TGP or SportPesa are making from their expanding UK gambling operations. The owners of TGP Holdings are listed as three Isle of Man trusts and one trust based in the British Virgin Islands, another tax haven. There is no public information about who the beneficiaries are of these trusts.

TGP Europe did not respond at all to questions about the structure of its operation, the revenues from SportPesa and whether any UK corporation tax is paid.

In its statement, SportPesa did not respond to questions about the company’s UK revenues or whether UK tax is paid on them. Its spokesperson said: “We are a socially responsible business that puts tremendous emphasis on grassroots sport and community development. We are fully compliant with all UK and international legal requirements and, as a company that operates in highly regulated markets, we take our responsibilities extremely seriously.”

Facebook Twitter Pinterest Hull City are also sponsored by SportPesa. Photograph: Greig Cowie/BPI/Rex/Shutterstock

In response to the wider question of how renowned English football clubs decide to partner their names so wholeheartedly with gambling companies, particularly where brands are linked offshore and their finances are not publicly transparent, none of the clubs would explain their decision-making process. Hull City declined to comment, as did Southampton, whose three-year partnership with SportPesa ended last season.

An Everton spokesperson said in a statement: “As with all our partnership agreements, a due diligence process was carried out both by the club and external advisers. Through this, we obtained the assurances we needed in order to proceed with a partnership with SportPesa.”

A spokesperson for Arsenal, whose partnership with SportPesa finished in May, said: “We do not discuss the details of any of our commercial partnerships, but would point out that we conduct due diligence checks via third-party organisations where appropriate before entering into agreements.”