The secret lives of betting billionaires

The secret lives of betting billionaires

Sportpesa Chief Executive Officer Ronald Karauri taking a selfie with Ladies,National seven aside Rugby Teams players after, they unveil new shirt sponsors on November 22nd 2016 at Nairobi Norfolk Hotel.Photo/CHRIS OMOLLO

Kihingo Village in Nairobi’s upmarket Kitisuru Estate is a step back to the pristine view that suddenly appears after a lonely drive on Peponi Road where horses occasionally compete for space with vehicles. Its rustic yet modern houses with brown exteriors give the gated estate a modern yet classical look that epitomises luxurious living.

Among those who call this estate where rent figures start from Sh500,000 per month and houses go for upwards of Sh150 million are a governor and wealthy businessmen.

Every morning, a famous tenant in the estate leaves in a black Range Rover Overfinch with customised number plates and a black chase car in tow.

The two cars that are easily noticeable on the Waiyaki Way traffic snake their way to Chancery Building on Valley Road, which houses the headquarters of betting giant SportPesa.

If betting could be described as a way to riches the way gamblers perceive it, then SportPesa’s Chief Executive Officer Ronald Karauri is the poster boy of this wealth.

As other directors of betting firms in the multi-billion-dollar industry prefer to remain reclusive, Mr Karauri, who has grown SportPesa from an unknown entity to the global behemoth it is today, lets his flamboyance open for all to see.

Flamboyant life

His social media pages are photo albums of a man leading a flamboyant life which a majority in the betting community can only dream of. After all, the son of the former Tigania MP Mathew Adams Karauri, who incidentally does not bet but has said in the past he plays poker once a month, has made big gambles in his life, which paid off.

“I am actually a college dropout. That is the only gap in my CV. Everybody knows I didn’t finish campus but you know in life sometimes that is where it takes you so long as you are successful,” he said during an interview with K24 TV in December 2017.

Mr Karauri dropped out of an engineering class at the University of Nairobi to try his luck at Kenya Airways and ended up as a pilot for 11 years. He tried his luck in the entertainment industry and was part of the ownership of the once popular Skyluxx Lounge in Westlands before quitting. He then sold off a piece of land he had bought for Sh2 million at a cool Sh25 million in order to buy shares in SportPesa, which was just starting.

That was in 2014 and mobile phone betting was still unchartered territory. Apart from casinos, the only other widely accepted form of gambling then was the Kenya Charity Sweepstake in which people bought raffle tickets hoping to get matching winning numbers. On Friday, British newspaper The Guardian said Sportpesa made Sh100 billion in revenues last year, a figure the company has vehemently denied before.

“No one even thought it could go anywhere. I remember asking some guys, ‘Do you have some cash to put into this thing?’ They would tell me ‘Boss, what..is this? You’re talking about gambling. It can’t work,” Mr Karauri told Business Daily in a past interview.

It is however one of the speakers on the night SportPesa was launched on February 1, 2014 who gave the Sunday Nation a peek into the convoluted underbelly of a giant industry the government is now fighting hard to rein in.

“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,” said Bulgarian Politician Slavcho Slavi Binev during the launch of SportPesa in 2014.

Different mission

Mr Binev was referring to Gerasim Nikolov, SportPesa’s global Chief Executive Officer and 21 per cent shareholder. Mr Binev himself was in a 2005 WikiLeaks cable described by former US Ambassador in Bulgaria James Pardew as the head of an organised criminal enterprise called the MIG Group.

“The group’s business interests also include construction and tourism; it operates a travel agency as part of its Cool Place entertainment complex. The group’s criminal activities include prostitution, narcotics and trafficking stolen automobiles,” said the cable.

Mr Nikolov on the other hand moved to Kenya just before 2,000 and launched the famed Toto 6/49 which was a replica of a similar Bulgarian lottery. Toto 6/49, which was run by First Lotto Limited was licensed to challenge the monopoly of the Kenya Charity Sweepstake on the basis of its support for people with disabilities and the destitute.

The company halted operations on February 28, 2011 amid claims that it had run short of gaming tickets without ever dishing out its Sh20 million jackpot.

Mr Nikolov then went under for three years before partnering with 10 other shareholders to start SportPesa, which is currently in trouble with the State alongside 27 other firms.

Like Mr Nikolov who came to Kenya for other ventures before joining the gambling industry, Italian Leandro Giovando came to Kenya to join his relative Nico Giovando. Nico Giovando was born in Nyeri in 1954 and though he lived in Europe as he grew up, upon his return to Kenya, he started Almanara Luxury Resort.

Located just five minutes’ away from Diani airstrip, the hotel is a favourite for very deep-pocketed individuals, business moguls, international celebrities and politicians.

In July 2010, renowned Real Madrid coach Jose Mourinho spent three weeks at the facility with his family. After winning the 2013 elections, President-elect Uhuru Kenyatta and his deputy William Ruto spent a couple of days at the property.

In 2017, Betin, which had operated in different countries in Africa under GoldBet Group, which has other markets in Europe, badly wanted a pie of SportPesa’s success after seeing it branch to England and even sponsoring Hull City in 2016. Goldbet partnered with Domenico Geovando and Leandro Giovando to set up Gamconde, which currently operates as Betin.

Back to the battle by the operators to regain their licences, on Thursday, High Court judge Weldon Korir refused to reverse the cancellation of Betpawa’s licence.

“I do not find it just and proper to issue interim any orders, let parties file and serve their responses for the matter to be heard on the July 26,” ruled Justice Korir.

Betpawa through its parent company Nanovas International sued Betting Control and Licensing Board (BCLB) under a certificate of urgency, seeking orders to be allowed to continue operations without interference.

Nanovas is majority owned by Nikolai Barnwell who, like Sportpesa’s Nikolov, came to Kenya on a different mission but ended up in the betting industry.

Mr Barnwell’s private seed fund, 88mph, catapulted him to fame in 2011 by providing much-needed finances to upcoming ICT prodigies. 88mph in 2011 invested Sh50 million in seven start-ups in Kenya followed by a Sh100 million investment the following year.

But Mr Barnwell concentrated more on his other love – Betpawa.

On Thursday, the Financial Reporting Centre (FRC) and Directorate of Criminal Investigations (DCI) opened investigations on the bank accounts of the 27 betting companies whose licences are currently suspended with the aim of establishing whether the accounts are being used to launder money.

This is after the BCLB wrote to the FRC asking them to investigate their bank accounts.

The banks had on Tuesday morning started to freeze the accounts which are thought to hold billions of shillings following an order by Central Bank of Kenya (CBK) on Monday night.

Tax haven

Among the issues currently being investigated is whether a well moneyed senior politician is among the shareholders of one of the big suspended firms through a company registered in a tax haven which is being used to launder money stolen from public coffers.

 

By Vincent Achuka, Sunday Nation

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Kenya Connectt
Aggregation for all soft news updates in Kenya.

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