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 mainly thanks to payment systems developed by homegrown technology firms that are beginning to make online services more practical.
For several years, mobile payments failed to take off in Nigeria as they have in countries such as Kenya, where Safaricom’s M-Pesa cash transfers have promoted a culture of cashless payments.
Fear of electronic fraud and sluggish web speeds have held Nigerian online consumers back but sports betting companies says the new, quick digital payment systems underpinning their websites are altering mindsets towards online transactions.
“We have seen significant development in the number of payment solutions that are offered. All that is absolutely changing the gaming space,” stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria’s commercial capital.
“The operators will opt for whoever is faster, whoever can connect to their platform with less problems and problems,” he said, including that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.
That growth has been matched by a rise 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 leapt to 29 million worth 185 billion in 2017 and in the very first quarter of 2018 there were almost 10 million worth 61 billion.
With a young population of nearly 190 million, rising cellphone use and falling data costs, Nigeria has long been seen as an excellent chance for online services – once consumers feel comfortable with electronic payments.
Online sports betting firms say that is happening, though reaching the tens of millions of Nigerians without access to banking services stays an obstacle for pure online merchants.
British online sports betting firm Betway opened its first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced 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 assisted the service to grow. These technological shifts motivated Betway to start running in Nigeria,” he said.
FINTECH COMPETITION
sports betting companies capitalizing the soccer craze worked up by Nigeria’s participation worldwide Cup state they are discovering the payment systems created by regional start-ups such as Paystack are proving popular online.
Paystack and another regional start-up Flutterwave, both founded in 2016, are offering competitors for Nigeria’s Interswitch which was set up in 2002 and was the main platform utilized by businesses operating in Nigeria.
“We included Paystack as one of our payment options without any excitement, without announcing to our consumers, and within a month it soared to the top most used payment alternative on the website,” stated Akin Alabi, founder of NairabBET.
He said NairaBET, the nation’s second biggest wagering firm, now had 2 million regular customers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment choice since it was added in late 2017.
Paystack was set up by two Nigerian computer system science graduates, and Ezra Olubi, who got early phase funding in Silicon Valley’s Y-Combinator programme.
In December 2016, it raised $1.3 million from investors consisting of China’s Tencent and Comcast Ventures in the United States.
Paystack, based in the mad Ikeja district of Lagos, stated the variety of regular 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 month,” stated Emmanuel Quartey, Paystack’s head of development.
He said an environment of developers had emerged around Paystack, developing software application to integrate the platform into sites. “We have actually seen a growth in that neighborhood and they have brought us along,” stated Quartey.
Paystack stated it enables payments for a variety of wagering companies however also a vast array of services, from energy services to transport 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 last year.
FOREIGN INVESTMENT
Shifts in Nigeria’s payment culture have accompanied the arrival of foreign investors wanting to take advantage of sports betting wagering.
Industry specialists say the sector produces about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the organization is more established.
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 50 percent stake in market leader Bet9ja when the Nigerian firm released in 2015.
NairaBET’s Alabi said its sales were divided in between stores and online however the ease of electronic payments, expense of running shops and capability for clients to avoid the preconception of gambling in public meant online deals would grow.
But despite advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – said it was essential to have a shop network, not least because many clients still remain unwilling to spend online.
He stated the business, with about 60 percent of Nigeria’s sports betting wagering market, had a comprehensive network. Nigerian wagering shops typically function as social hubs where consumers can see soccer totally free of charge while positioning bets.
At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to view Nigeria’s final warm up game before the World Cup.
Richard Onuka, a factory worker who earns 25,000 naira a month, was focused on a television screen inside. He stated he started gambling 3 months earlier and bets approximately 1,000 naira a day.
“Since I have actually 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; modifying by David Clarke)
