Sportpesa boss Ronald Karauri: We do not know what really hit us

Ronald Karauli, a jolly, flamboyant former Kenya Airways pilot, was never expected to be the man to grow SportPesa from a struggling little company into East Africa's largest gambling company.

Karauli doesn't need to be a Kenyan to know that he's the man he's been since taking on a public role as CEO of SportPesa.

An avid poker player and the son of a politician, Karauli first met Gerasim Nikolov, the controversial principal founder of SportPesa, at a poker table on the first floor of the semi-glossy Phoenix Casino in Hurlingham, Nairobi, in 2014.

Related

Hey, bet on SportPesa at your own risk

News 04 Aug 2021

Death in the Casino: Story of SportPesa

News 22 Jul 2021

It was a coincidence that he met the Bulgarian that night. The two poker lovers hit it off when they faced off in a game of competitive poker at the Hurlingham casino.

The two strangers quickly bonded and their friendship grew as they played poker games together.

Karauli believes that a person's hobby reveals their true character. And at this table, he knew he could trust Nikolov.

"There are many hands in poker, many cards. You bet, the best hand wins. Sometimes you laugh, but in the end the best hand wins," Karauli told us in a wide-ranging interview to get an inside look at the struggling company.

From here, the two would meet a few more times and solidify their business decision to run a betting company together.

Sportpesa podcast - Episode 3: The Captain Comes In

Biggest betting firm in East Africa

In January 2015, Karauli officially joined SportPesa.

The decision paid off four years later, and their fortunes soared after the company's thunderous success as the largest betting company in East Africa. By December 2018, SportPesa's revenue reached 150 billion yen per year.

He fondly recalls first meeting his Bulgarian partners.

"I wish I had met them. They have this image of Eastern Europeans or Nigerians or whatever, but they're nice people. There's something about poker. It brings out your true character and personality."

Karauli and a group of Bulgarian shareholders have been tight-lipped about the company's movements for months since it became the target of a relentless government crackdown and lost its gambling licences to two other companies, Pevens East Africa and Landmark last month.

In his first exclusive interview, Karauli denied allegations that some of his Bulgarian associates were criminals and also refuted claims that he had mafia ties.

"Gero (Gerasim Nikolov) is a gentleman. I've known him for years and all the time he was in Kenya, he was married to a Kenyan woman and they have two children," he said.

Nikolov ran SportPesa as CEO before Karauli joined the company and took over the baton.

"I've never seen such a hardworking person as Gero. We're the ones who brought the company to this point," says the SportPesa boss, seated.

Would-be engineer turned pilot

As fate would have it, Karauli first met former MP Dick Watica in 2014 at the same casino where he met the Bulgarian. It was at that casino that Watica collapsed a year later, on December 19, 2015, and was rushed to Karen Hospital, where he was pronounced dead.

Upon meeting the pair, Karauli discovered that Nikolov and Vatica were already close friends and shared a controversial gambling history spanning more than a decade. "My relationship with Watica started playing poker in a casino. That's when I met Gero and that's when I met Watica.

At the time, she didn't know anything about Watica, except what she'd read about him in the media.

Karauri's demeanor as he sits in his office betrays the big battle from within that's tearing the giant apart.

Karauri is a delightful host. If he's the kind of person who could be criticized for being arrogant and proud, he's very good at hiding it. Those who love him praise his taste for the finer things, his lavish lifestyle and his charming honesty.

He's quick-witted, personable and undeniably media-savvy. His cheerful laughter echoes through the boardroom.

Sharp and a little neurotic, he has all the important numbers at his fingertips. In any case, he's a former pilot who topped his class at Mangu High School.

He graduated from the University of Nairobi's Faculty of Engineering in three years. He would have become a mechanical engineer had he not dropped out of school in his senior year and been hired as a trainee pilot by Kenya Airways (KQ). He feels powerless as a vicious boardroom battle between billionaire investors spreads like a cancer, destroying everything.

Karaur doesn't understand what happened to the company, and claimed that all the suspects (from tax fraud, money laundering to shifts from money) are trying to clear up. do. He is convinced that one day the court will acknowledge his legitimacy and the company will regain glory.

Became rich and famous

But until he met the Bulgarian people, this bet was not in his view.

When the company became the Kenya Football Association, the Boxing League, the Premier League team in England, and the F1 sponsor, he witnessed the company to provide trophy to the team.

He was also a CEO in Kenya. In Kenya, he quickly became famous because he gathered a huge amount of money for Sports and was introduced in the media.

He rejoiced this reputation, riding a private jet, holding a luxurious party, and driving the finest cars, and did not miss the opportunity to appeal to the company.

Now it is just a branding and no private jet.

Bulgarian founders have found a competent trader from an airplane to the face of a Sportopes.

To be in his office in the Cylying Bill, you must pass a stylish reception with a huge glov e-shaped seat and ball.

On the right wall of the office, Aaron Ramsey's autographed arsenal jersey is displayed.

If you look at the jersey, you will feel nervous in the room, reminiscent of the glorious days of Sports. The only comfort is the fact that this soccer player has left Arsenal.

Next to it is a signature of Frist Stoykov, one of the best soccer players in the same generation and the best Bulgarian soccer player in history.

University dropout

"Sportpesa, All the Best" and Stoykov signed with black ink. Below is another shield written by Stoykov: "1994 FIFA World Cup Scoring King, 1994 Baron Doll" is written in Stoykov's souvenir.

The Karaur's story begins with Meru where he was born. The family moved to Nairobi, where he grew up.

"I think I moved to Nairobi because my father was a politician.

He graduated from a junior high school in Mangoo in 1996, entered the University of Nairobi and was trained by a machine engineer.

"While I was doing engineering, an opportunity came up with Kenya Airways. They were the first to do initial pilot training. So I dropped out of college in my third year of engineering and started flying with Kenya Airways," he says.

He worked with KQ for 11 years; six as a co-pilot and five as a captain.

Karauli has weathered many storms. As a pilot, he has literally flown through storms. And he knows that at the end of the turbulence, there is always calm.

At Kenya Airways, he was one of the pioneers who went to Ethiopia for pilot training.

"We were the only ones who went to Addis. After we came back and told them about our struggles at KQ, they moved the training to South Africa. Ethiopian Airlines uses the American system and the exams were much easier compared to the Kenyan one.

For a trainee pilot, nothing is more difficult than training to fly a Boeing 737 with a Cessna 122." A decade later, he was promoted to captain and flying KQ's biggest planes.

Highflying aviation career

That was before he moved to the powerful aviation union where he became secretary-general of the Kenya Airways Pilots Association (Kalpa).

"The highlight of my flying career was when I became captain. You take control of the aircraft, you take charge of the lives. It also shows your confidence that you can do it."

So why did Karauli leave a seemingly high-flying career to gamble on sports?

He says that before he was persuaded to jump ship from KQ, SportPesa's original shareholders were just three people: Gerasim Nikolov, Jean Grand and Dick Watica.

"The others joined later. The others joined later.

"I sat down and looked at the possibilities and I thought this was an opportunity. So I sold a little piece of land and put all my money into it. It was a very expensive investment at the time," he says.

The initial investment was $5 million, which is about 543 million Swiss francs at the current exchange rate.

"It was a big risk, but I thought if we did it right, we could succeed."

Grant, another Bulgarian, was a shareholder and director at the time.

"Dick Watica, Gero and Gene Grant were very good friends and we did other things together. They were the three shareholders before I joined. To be honest, they were friends who started the company," he said.

SportPesa's initial shareholders

The SportPesa boss said Watica was one of the people he dealt with when he acquired a 6% stake.

When there was a misunderstanding with Safaricom about the business in early 2014, Watica led a delegation of SportPesa officials to explain to the telco how it would operate.

"We were shut down for almost a month at one point because we had big negotiations with Safaricom.

It was probably then that Watica went to his friend and travelling companion Paul Ndung'u to convince him to buy a share in the company. Ndung'u is a big shot who made billions at Safaricom as a trader and would help them buy Safaricom.

Ndung'u and Karauri are not on the same page after a nasty standoff at the board meeting last year.

Ndung'u and other shareholders joined shortly after. In the end, Safaricom had 10 directors, seven of whom were shareholders.

After the meeting at Phoenix Casino, it was decided that Ndung'u would become chairman after Watica's death.

"I interacted with Dick a lot. He was a very strong chairman. We actually relied on him for most things. He really guided us in terms of maneuvering in the regulatory environment. He had a lot of experience in that respect so we were lucky to have him at that point," Karauri says.

Before founding SportPesa, Karauli had tried his hand at several businesses, including Skylux Lounge, a popular club in Nairobi's Westlands area.

I was given the opportunity to come to SportPesa and I realised that if you're not involved in running the business, you miss out on a lot," he says.

Crimes that SportPesa committed

But explaining his family to move from flying to gambling was a tough task.

"It was a tough decision. I remember trying to explain to my family and friends, I was at the peak of my career as a pilot. But I was ready to take the plunge and cross over to the other side."

He made the decision and his life changed.

"Initially, it didn't change much because I was still involved with KQ. The business was growing and we were seeing how it was in terms of enrolment, so it didn't change much," he said.

"However, the situation has changed as the company grows, especially for me, and I treated me in Swiss francs, especially for me. It was. "

Few companies are closed by the government due to tax issues. In fact, most of the time, once taxpayers are caught, they prefer an easy way to make a repayment schedule.

If a taxpayer does not agree with the tax claim, there is a judicial process in parallel with the tax dispute resolution mechanism with the final decision on who pays what. But the government does not allow the process to end it.

So what hit the Sports and what kind of crime did the company actually committed?

To know the whole picture, please listen to the podcast "A Country of Players" on the rapid growth and fall of Kenya's largest gambling company Sport Pessa, and the attempt to revive in this "Nation. africa"; As I grew up, I was dealing with about 200 million SH jackpots.

Few companies have been suspended by the government due to tax dispute. In fact, most of the time, once taxpayers are caught, they prefer an easy way to make a repayment plan.

If the taxpayer is dissatisfied with the tax amount, there is a judicial procedure in parallel with the tax dispute resolution mechanism, which has the final decision on who pays what. But the government does not allow the process to end it.

So what hit the Sports and what kind of crime did the company actually committed?