Online Betting Firms Gamble on Soccer-mad Nigeria
By Alexis Akwagyiram and Didi Akinyelure
LAGOS, June 25 (Reuters) – Online sports betting is flourishing in soccer-mad Nigeria mostly thanks to payment systems established by homegrown innovation firms that are starting to make online companies more practical.
For several years, mobile payments failed to remove in Nigeria as they have in countries such as Kenya, where Safaricom’s M-Pesa cash transfers have fostered a culture of cashless payments.
Fear of electronic fraud and slow internet speeds have held Nigerian online consumers back but wagering companies says the brand-new, quick digital payment systems underpinning their websites are altering attitudes towards online transactions.
“We have seen substantial growth in the variety of payment services that are available. All that is definitely altering the gaming space,” stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria’s industrial capital.
“The operators will choose whoever is faster, whoever can connect to their platform with less concerns and glitches,” he said, including that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.
That development has actually been matched by an increase in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central bank and licensed 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 very first quarter of 2018 there were nearly 10 million worth 61 billion.
With a young population of almost 190 million, increasing cellphone use and falling information costs, Nigeria has long been viewed as a great chance for online services – once customers feel comfortable with electronic payments.
Online gambling companies state that is occurring, though reaching the tens of countless Nigerians without access to banking services remains an for pure online merchants.
British online sports betting firm Betway opened its very first African company 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 industry 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 the company to flourish. These technological shifts encouraged Betway to start operating in Nigeria,” he said.
FINTECH COMPETITION
sports betting companies capitalizing the soccer craze whipped up by Nigeria’s participation in the World Cup state they are discovering the payment systems produced by regional 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 established in 2002 and was the main platform utilized by companies running in Nigeria.
“We added Paystack as one of our payment choices with no fanfare, without revealing to our customers, and within a month it shot up to the top most pre-owned payment choice on the site,” said Akin Alabi, creator of NairabBET.
He said NairaBET, the nation’s second greatest sports betting firm, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment option because it was included late 2017.
Paystack was established by two Nigerian computer system science 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 investors including China’s Tencent and Comcast Ventures in the United States.
Paystack, based in the mad Ikeja district of Lagos, said the number of regular 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 every month,” said Emmanuel Quartey, Paystack’s head of development.
He stated an ecosystem of developers had emerged around Paystack, producing software application to integrate the platform into websites. “We have actually seen a development in that community and they have actually carried us along,” stated Quartey.
Paystack stated it enables payments for a number of sports betting firms however also a large range of organizations, from energy services to transfer business to insurer Axa Mansard.
Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program along with endeavor capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million last year.
FOREIGN INVESTMENT
Shifts in Nigeria’s payment culture have corresponded with the arrival of foreign investors hoping to take advantage of 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 both set up in Nigeria in the last two years while Italy’s Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian firm released in 2015.
NairaBET’s Alabi said its sales were split in between stores and online but the ease of electronic payments, expense of running shops and capability for clients to prevent the preconception of sports betting in public meant online deals would grow.
But regardless of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – said it was essential to have a shop network, not least since numerous clients still stay unwilling to spend online.
He stated the company, with about 60 percent of Nigeria’s sports betting market, had an extensive network. Nigerian sports betting stores often act as social centers where consumers can see soccer totally free of charge while placing bets.
At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans gathered to enjoy Nigeria’s last heat up video game before the World Cup.
Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a television screen inside. He said he started sports betting 3 months ago and bets as much as 1,000 naira a day.
“Since I have been playing I have actually not won anything but 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)
