Online Betting Firms Gamble on Soccer-mad Nigeria
By Alexis Akwagyiram and Didi Akinyelure
LAGOS, June 25 (Reuters) – Online sports betting is booming in soccer-mad Nigeria mainly thanks to payment systems established by homegrown innovation firms that are beginning to make online organizations more viable.
For many years, mobile payments working to remove in Nigeria as they have in countries such as Kenya, where Safaricom’s M-Pesa cash transfers have actually promoted a culture of cashless payments.
Fear of electronic fraud and sluggish internet speeds have held Nigerian online customers back but sports betting firms says the brand-new, fast digital payment systems underpinning their sites are changing attitudes towards online deals.
“We have seen significant development in the number of payment options that are readily available. All that is certainly changing the video gaming space,” stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria’s industrial capital.
“The operators will go with whoever is much faster, whoever can connect to their platform with less issues and problems,” he stated, including that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.
That development has actually been matched by an increase in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve bank and licensed banks.
In 2016, there were 14 million web payments worth a total 132 billion naira ($420 million). Transactions jumped to 29 million worth 185 billion in 2017 and in the very first quarter of 2018 there were nearly 10 million worth 61 billion.
With a young population of almost 190 million, rising smart phone usage and falling data expenses, Nigeria has long been seen as an excellent opportunity for online organizations – once consumers feel comfy with electronic payments.
Online gambling firms state that is occurring, though reaching the 10s of millions of Nigerians without access to banking services remains an obstacle for pure online sellers.
British online sports betting company Betway opened its very first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.
“There is a progressive shift to online now, that is where the market is going,” Betway’s Nigeria supervisor Lere Awokoya said.
“The development in the variety of fintechs, and the government as an enabler, has actually helped business to grow. These technological shifts encouraged Betway to begin operating in Nigeria,” he said.
FINTECH COMPETITION
sports betting firms cashing in on the soccer frenzy whipped up by Nigeria’s participation on the planet Cup say they are finding the payment systems developed by regional start-ups such as Paystack are showing popular online.
Paystack and another regional startup Flutterwave, both founded in 2016, are supplying competition for Nigeria’s Interswitch which was established in 2002 and was the main platform used by services operating in Nigeria.
“We added Paystack as one of our payment choices with no excitement, without revealing to our consumers, and within a month it soared to the number one most used payment option on the site,” said Akin Alabi, founder of NairabBET.
He stated NairaBET, the country’s 2nd biggest sports betting company, now had 2 million routine consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment option because it was added in late 2017.
Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase funding in Silicon Valley’s Y-Combinator programme.
In December 2016, it raised $1.3 million from financiers including China’s Tencent and Comcast Ventures in the United States.
Paystack, based in the mad Ikeja district of Lagos, said the number of monthly deals it processed increased from about 8,000 in early 2016 to more than 900,000 as of June 2018.
“In early 2016 we were processing about $3,000 a month. Today we process well over $11 million each and every single month,” stated Emmanuel Quartey, Paystack’s head of development.
He said an ecosystem of developers had actually emerged around Paystack, producing software application to incorporate the platform into sites. “We have actually seen a development because neighborhood and they have actually brought us along,” stated Quartey.
Paystack stated it allows payments for a number of wagering firms but also a broad range of organizations, from energy services to carry business to insurance company Axa Mansard.
Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to investor Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million in 2015.
FOREIGN INVESTMENT
Shifts in Nigeria’s payment culture have accompanied the arrival of foreign investors intending to take advantage of sports betting.
Industry professionals say the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the business is more developed.
Russia’s 1XBet and Slovakia’s DOXXbet have both established in Nigeria in the last two years while Italy’s Goldbet led the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian company released in 2015.
NairaBET’s Alabi stated its sales were split in between shops and online however the ease of electronic payments, expense of running stores and ability for clients to prevent the preconception of sports betting in public meant online deals would grow.
But in spite of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – stated it was essential to have a shop network, not least because numerous clients still remain hesitant to invest online.
He stated the company, with about 60 percent of Nigeria’s sports betting market, had a substantial network. Nigerian sports betting shops often function as social centers where consumers can see soccer totally free of charge while positioning bets.
At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans gathered to see Nigeria’s last warm up game before the World Cup.
Richard Onuka, a factory worker who earns 25,000 naira a month, was focused on a TV screen inside. He stated he started sports betting 3 months earlier and bets up to 1,000 naira a day.
“Since I have been playing I have actually not won anything however I believe that a person day I will win,” said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)
