Online Betting Firms Gamble on Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) – Online sports betting wagering is growing in soccer-mad Nigeria largely thanks to payment systems established by homegrown innovation companies that are starting to make online organizations more practical.

For many years, mobile payments stopped working to take off 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 scams and sluggish web speeds have actually held Nigerian online customers back but wagering firms says the brand-new, quick digital payment systems underpinning their websites are changing attitudes towards online transactions.

“We have actually seen significant growth in the number of payment options that are offered. All that is definitely changing the gaming space,” said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria’s commercial capital.

“The operators will go with whoever is quicker, whoever can link to their platform with less concerns and glitches,” he stated, including that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That development has been matched by an increase 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 leapt 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 smart phone usage and falling data costs, Nigeria has actually long been viewed as a great chance for online companies – once consumers feel comfortable with electronic payments.

Online sports betting companies say that is taking place, though reaching the tens of countless Nigerians without access to banking services remains a difficulty for pure online merchants.

British online wagering company Betway opened its very first African organization 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 stated.

“The development in the number of fintechs, and the federal government as an enabler, has assisted the service to grow. These technological shifts encouraged Betway to begin running in Nigeria,” he stated.

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy worked up by Nigeria’s participation worldwide Cup say they are discovering the payment systems developed by local start-ups such as Paystack are proving popular online.

Paystack and another local startup Flutterwave, both founded in 2016, are supplying competitors for Nigeria’s Interswitch which was established in 2002 and was the main platform utilized by businesses operating in Nigeria.

“We included Paystack as one of our payment alternatives without any fanfare, without announcing to our customers, and within a month it shot up to the primary most secondhand payment option on the website,” stated Akin Alabi, founder of NairabBET.

He stated NairaBET, the nation’s 2nd greatest sports betting firm, now had 2 million regular clients on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment choice given that it was included late 2017.

Paystack was established by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who received early stage funding in Silicon Valley’s Y-Combinator program.

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 frenetic Ikeja district of Lagos, said the variety 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 said a community of developers had emerged around Paystack, creating software to incorporate the platform into websites. “We have seen a development in that community and they have carried us along,” said Quartey.

Paystack stated it allows for a number of wagering firms however likewise a large range of businesses, from energy services to transfer business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to 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 actually coincided with the arrival of foreign financiers wishing to take advantage of sports betting.

Industry professionals state the sector produces 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 was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET’s Alabi stated its sales were divided between stores and online but the ease of electronic payments, expense of running shops and ability for consumers to avoid the stigma of gambling in public implied online deals would grow.

But regardless 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 consumers still remain reluctant to spend online.

He said the business, with about 60 percent of Nigeria’s sports betting market, had a substantial network. Nigerian wagering shops often act as social hubs where clients can watch 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 enjoy 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 TV screen inside. He said he began sports betting 3 months earlier and bets up to 1,000 naira a day.

“Since I have been playing I have not won anything however I believe that one day I will win,” said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)