Online Betting Firms Gamble on Soccer-mad Nigeria
By Alexis Akwagyiram and Didi Akinyelure
LAGOS, June 25 (Reuters) – Online sports betting is expanding in soccer-mad Nigeria largely thanks to payment systems developed by homegrown technology companies that are starting to make online services more practical.
For many years, failed 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 scams and slow internet speeds have actually held Nigerian online customers back but sports betting firms states the brand-new, fast digital payment systems underpinning their websites are changing attitudes towards online transactions.
„We have seen significant development in the number of payment solutions that are available. All that is certainly altering 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 glitches,“ he stated, adding that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.
That development has actually been matched by a rise in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main bank and licensed banks.
In 2016, there were 14 million web payments worth an overall 132 billion naira ($420 million). Transactions leapt to 29 million worth 185 billion in 2017 and in the first quarter of 2018 there were nearly 10 million worth 61 billion.
With a young population of almost 190 million, increasing smart phone use and falling data expenses, Nigeria has actually long been viewed as a fantastic chance for online companies – once consumers feel comfortable with electronic payments.
Online gaming firms state that is occurring, though reaching the tens of millions of Nigerians without access to banking services stays a difficulty for pure online merchants.
British online sports betting firm Betway opened its first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.
„There is a progressive shift to online now, that is where the market is going,“ Betway’s Nigeria manager Lere Awokoya said.
„The growth in the variety of fintechs, and the government as an enabler, has actually assisted the business to prosper. These technological shifts encouraged Betway to start operating in Nigeria,“ he said.
FINTECH COMPETITION
sports betting firms capitalizing the soccer craze worked up by Nigeria’s participation in the World Cup state they are discovering the payment systems developed by local start-ups such as Paystack are showing popular online.
Paystack and another regional start-up Flutterwave, both established in 2016, are providing competition for Nigeria’s Interswitch which was set up in 2002 and was the main platform used by businesses operating in Nigeria.
„We added Paystack as one of our payment options with no excitement, without announcing to our clients, and within a month it shot up to the number one most used payment option on the site,“ stated Akin Alabi, founder of NairabBET.
He said NairaBET, the country’s 2nd most significant wagering firm, now had 2 million routine clients on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative because it was included late 2017.
Paystack was established by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early stage financing in Silicon Valley’s Y-Combinator program.
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, stated the variety of month-to-month transactions it processed increased from about 8,000 in early 2016 to more than 900,000 since June 2018.
„In early 2016 we were processing about $3,000 a month. Today we process well over $11 million every month,“ said Emmanuel Quartey, Paystack’s head of development.
He stated a community of designers had emerged around Paystack, creating software application to integrate the platform into sites. „We have seen a growth in that community and they have actually brought us along,“ stated Quartey.
Paystack said it enables payments for a number of sports betting companies however likewise a large range of services, from energy services to carry companies to insurance company Axa Mansard.
Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program as well as venture capitalists 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 actually corresponded with the arrival of foreign financiers intending to take advantage of sports betting.
Industry specialists say the sector produces about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the business is more established.
Russia’s 1XBet and Slovakia’s DOXXbet have both set up in Nigeria in the last 2 years while Italy’s Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian company launched in 2015.
NairaBET’s Alabi stated its sales were divided in between stores and online however the ease of electronic payments, cost of running stores and capability for customers to prevent the preconception of gambling in public suggested online deals would grow.
But in spite of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – stated it was crucial to have a shop network, not least because many consumers still stay unwilling to invest online.
He stated the business, with about 60 percent of Nigeria’s sports betting market, had a substantial network. Nigerian sports betting shops often serve as social centers where clients can see soccer complimentary of charge while placing bets.
At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans gathered to watch Nigeria’s last warm up video 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 gambling 3 months ago and bets up to 1,000 naira a day.
„Since I have been playing I have not won anything however I believe that a person day I will win,“ stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)