Online Betting Firms Gamble on Soccer-mad Nigeria
By Alexis Akwagyiram and Didi Akinyelure
LAGOS, June 25 (Reuters) – Online sports betting is growing in soccer-mad Nigeria largely thanks to payment systems established by homegrown innovation companies that are beginning to make online services more feasible.
For many years, mobile payments stopped working to remove in Nigeria as they have in nations such as Kenya, where Safaricom’s M-Pesa cash transfers have promoted a culture of cashless payments.
Fear of electronic fraud and sluggish internet speeds have actually held Nigerian online customers back however sports betting companies states the brand-new, fast digital payment systems underpinning their sites are changing mindsets towards online transactions.
“We have actually seen significant growth in the number of payment options that are offered. All that is absolutely changing the video gaming space,” said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria’s business capital.
“The operators will choose whoever is much faster, whoever can link to their platform with less issues and glitches,” he said, including that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.
That growth has been matched by an increase in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve bank and certified banks.
In 2016, there were 14 million web payments worth an overall 132 billion naira ($420 million). Transactions jumped to 29 million worth 185 billion in 2017 and in the first quarter of 2018 there were almost 10 million worth 61 billion.
With a young population of almost 190 million, increasing smart phone use and falling information costs, Nigeria has long been viewed as an excellent chance for online companies – once consumers feel comfy with electronic payments.
Online gambling companies say that is happening, though reaching the tens of millions of Nigerians without access to banking services remains a challenge for pure online merchants.
British online sports betting firm Betway opened its very first African service 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 industry is going,” Betway’s Nigeria manager Lere Awokoya stated.
“The growth in the variety of fintechs, and the government as an enabler, has actually assisted the organization to grow. These technological shifts motivated Betway to start operating in Nigeria,” he stated.
FINTECH COMPETITION
sports betting firms capitalizing the soccer frenzy whipped up by Nigeria’s participation worldwide Cup say they are finding the payment systems developed by local startups such as Paystack are showing popular online.
Paystack and another regional startup Flutterwave, both established in 2016, are offering competition for Nigeria’s Interswitch which was established in 2002 and was the primary platform utilized by businesses operating in Nigeria.
“We added Paystack as one of our payment options without any excitement, without announcing to our clients, and within a month it shot up to the number one most secondhand payment option on the website,” stated Akin Alabi, creator of NairabBET.
He said NairaBET, the country’s 2nd greatest wagering company, now had 2 million routine clients on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative since it was included late 2017.
Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase financing in Silicon Valley’s Y-Combinator programme.
In December 2016, it raised $1.3 million from financiers consisting of 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 rose 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 growth.
He stated an environment of developers had emerged around Paystack, producing software to integrate the platform into websites. “We have seen a growth in that community and they have actually carried us along,” said Quartey.
Paystack stated it makes it possible for payments for a number of wagering companies but likewise a large range of businesses, from energy services to carry business to insurer Axa Mansard.
Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme as well as investor Greycroft Partners and Green Visor Capital and the Omidyar . It raised $10 million last year.
FOREIGN INVESTMENT
Shifts in Nigeria’s payment culture have actually coincided with the arrival of foreign financiers wanting to use sports betting wagering.
Industry professionals state the sector creates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where business is more established.
Russia’s 1XBet and Slovakia’s DOXXbet have actually both set up in Nigeria in the last two years while Italy’s Goldbet was ahead of the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian company released in 2015.
NairaBET’s Alabi said its sales were split between stores and online however the ease of electronic payments, expense of running stores and ability for consumers to prevent the preconception of gaming in public implied 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 store network, not least because numerous clients still stay unwilling to invest online.
He stated the business, with about 60 percent of Nigeria’s sports betting wagering market, had a substantial network. Nigerian sports betting stores often act as social hubs where consumers can enjoy soccer complimentary of charge while placing bets.
At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans collected to view Nigeria’s last warm up game before the World Cup.
Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a TV screen inside. He said he started sports betting three months back and bets as much as 1,000 naira a day.
“Since I have actually been playing I have not won anything but I think that one day I will win,” stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)
