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 established by homegrown innovation firms that are starting to make online companies more viable.

For years, mobile payments stopped working to take off in Nigeria as they have in countries such as Kenya, where Safaricom’s M-Pesa cash transfers have actually cultivated a culture of cashless payments.

Fear of electronic scams and sluggish internet speeds have actually held Nigerian online customers back however wagering companies states the brand-new, quick digital payment systems underpinning their sites are changing attitudes towards online transactions.

“We have seen considerable development in the number of payment services that are readily available. All that is absolutely changing the video gaming area,” said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria’s business capital.

“The operators will opt for whoever is faster, whoever can connect to their platform with less problems and glitches,” he said, adding that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That growth has actually 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 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 very first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of almost 190 million, increasing cellphone use and falling information costs, Nigeria has actually long been viewed as a fantastic chance for online organizations – once consumers feel comfy with electronic payments.

Online gambling firms say that is happening, though reaching the 10s of countless Nigerians without access to banking services stays a challenge for pure online retailers.

British online wagering company Betway opened its 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 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 assisted the business to grow. These technological shifts motivated Betway to start operating in Nigeria,” he stated.

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze whipped up by Nigeria’s involvement worldwide Cup state they are discovering the payment systems created by local startups such as Paystack are showing popular online.

Paystack and another regional startup Flutterwave, both established in 2016, are providing competition for Nigeria’s Interswitch which was set up in 2002 and was the primary platform used by services operating in Nigeria.

“We added Paystack as one of our payment alternatives with no excitement, without announcing to our customers, and within a month it shot up to the number one most pre-owned payment choice on the website,” stated Akin Alabi, founder of NairabBET.

He stated NairaBET, the country’s 2nd greatest sports betting company, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment option given that it was included late 2017.

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

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, said the number of monthly transactions 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 development.

He stated a community of designers had emerged around Paystack, developing software application to incorporate the platform into websites. “We have seen a development in that community and they have carried us along,” stated Quartey.

Paystack said it enables payments for a variety of sports betting firms however also a large range of companies, from utility services to transport companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme 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 accompanied the arrival of foreign financiers hoping to use sports betting wagering.

Industry experts say the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the business is more established.

Russia’s 1XBet and Slovakia’s DOXXbet have actually both set up in Nigeria in the last 2 years while Italy’s Goldbet was ahead of the pattern, taking a half stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET’s Alabi said its sales were divided between stores and online however the ease of electronic payments, expense of running shops and ability for consumers to avoid the preconception of gaming in public meant online transactions would grow.

But in spite of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – said it was necessary to have a store network, not least due to the fact that lots of consumers still remain reluctant to invest online.

He said the company, with about 60 percent of Nigeria’s sports betting wagering market, had a substantial network. Nigerian often function as social hubs where clients can view soccer complimentary of charge while putting bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans collected to enjoy Nigeria’s final heat up 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 three months earlier 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; editing by David Clarke)