Online Betting Firms Gamble on Soccer-mad Nigeria
By Alexis Akwagyiram and Didi Akinyelure
LAGOS, June 25 (Reuters) – Online sports betting wagering is flourishing in soccer-mad Nigeria mainly thanks to payment systems established by homegrown innovation companies that are starting to make online businesses more viable.
For years, mobile payments stopped working to remove in Nigeria as they have in nations such as Kenya, where Safaricom’s M-Pesa money transfers have actually fostered a culture of cashless payments.
Fear of electronic fraud and sluggish web speeds have held Nigerian online customers back but wagering firms says the new, fast digital payment systems underpinning their websites are changing attitudes towards online transactions.
“We have seen considerable growth in the number of payment services that are readily available. All that is certainly changing the gaming area,” stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria’s business capital.
“The operators will choose whoever is much faster, whoever can connect to their platform with less concerns and problems,” he stated, adding that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.
That development has been matched by a rise in web payments, according to information 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 a total 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 data expenses, Nigeria has long been viewed as a great chance for online services – once customers feel comfortable with electronic payments.
Online gambling firms say that is occurring, though reaching the tens of millions of Nigerians without access to banking services remains a challenge for pure online retailers.
British online wagering 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 gradual shift to online now, that is where the market is going,” Betway’s Nigeria supervisor Lere Awokoya stated.
“The growth in the number of fintechs, and the federal government as an enabler, has actually helped business to flourish. These technological shifts motivated Betway to begin running in Nigeria,” he stated.
FINTECH COMPETITION
sports betting companies capitalizing the soccer frenzy worked up by Nigeria’s involvement on the planet Cup say they are discovering the payment systems created by regional start-ups such as Paystack are showing popular online.
and another regional startup Flutterwave, both founded in 2016, are providing competitors for Nigeria’s Interswitch which was set up in 2002 and was the main platform utilized by services running in Nigeria.
“We included Paystack as one of our payment alternatives without any excitement, without announcing to our customers, and within a month it shot up to the primary most secondhand payment option on the website,” said Akin Alabi, creator of NairabBET.
He said NairaBET, the country’s second most significant wagering firm, now had 2 million regular customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment option considering that it was included late 2017.
Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage 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, stated the variety of monthly transactions it processed rose 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 single month,” said Emmanuel Quartey, Paystack’s head of development.
He said a community of designers had actually emerged around Paystack, producing software application to integrate the platform into sites. “We have seen a growth because community and they have brought us along,” said Quartey.
Paystack said it allows payments for a variety of sports betting firms but also a wide variety of companies, from energy services to carry companies to insurer Axa Mansard.
Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise 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 accompanied the arrival of foreign financiers hoping to use sports betting.
Industry experts state the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the organization is more developed.
Russia’s 1XBet and Slovakia’s DOXXbet have both established in Nigeria in the last 2 years while Italy’s Goldbet led the trend, taking a half stake in market leader Bet9ja when the Nigerian firm launched in 2015.
NairaBET’s Alabi stated its sales were split between stores and online but the ease of electronic payments, cost of running shops and capability for consumers to prevent the stigma of gambling in public suggested online deals would grow.
But despite advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – said it was very important to have a store network, not least since lots of consumers still remain hesitant to invest online.
He stated the company, with about 60 percent of Nigeria’s sports betting wagering market, had a comprehensive network. Nigerian wagering stores typically act as social hubs where clients can enjoy soccer totally free of charge while positioning bets.
At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans gathered to view Nigeria’s final warm up video game before the World Cup.
Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a TV screen inside. He stated he began sports betting 3 months earlier and bets as much as 1,000 naira a day.
“Since I have been playing I have actually not won anything however I believe that one day I will win,” stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)
