Online Betting Firms Gamble on Soccer-mad Nigeria
By Alexis Akwagyiram and Didi Akinyelure
LAGOS, June 25 (Reuters) – Online sports betting wagering is booming in soccer-mad Nigeria mainly thanks to payment systems established by homegrown technology companies that are beginning to make online businesses more feasible.
For years, mobile payments failed to take off in Nigeria as they have in nations such as Kenya, where Safaricom’s M-Pesa money transfers have actually cultivated a culture of cashless payments.
Fear of electronic fraud and sluggish internet speeds have held Nigerian online customers back but wagering firms says the brand-new, fast digital payment systems underpinning their websites are altering mindsets towards online transactions.
“We have actually seen significant development in the variety of payment solutions that are available. All that is absolutely altering the video gaming area,” said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria’s commercial capital.
“The operators will go with whoever is faster, whoever can connect to their platform with less issues and problems,” 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 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 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 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 seen as a great opportunity for online businesses – once consumers feel comfy with electronic payments.
Online gambling companies say that is taking place, though reaching the 10s of millions of Nigerians without access to banking services stays a challenge for pure online retailers.
British online wagering firm Betway opened its very first African service 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 manager Lere Awokoya said.
“The development in the variety of fintechs, and the government as an enabler, has actually assisted the business to thrive. These technological shifts encouraged Betway to start running in Nigeria,” he stated.
FINTECH COMPETITION
sports betting firms capitalizing the soccer craze whipped up by Nigeria’s participation on the planet Cup state they are discovering the payment systems developed by regional start-ups such as Paystack are showing popular online.
Paystack and another regional start-up Flutterwave, both founded in 2016, are providing competitors for Nigeria’s Interswitch which was established in 2002 and was the primary platform used by services running in Nigeria.
“We added Paystack as one of our payment options without any excitement, without revealing to our customers, and within a month it soared to the primary most pre-owned payment choice on the site,” stated Akin Alabi, founder of NairabBET.
He said NairaBET, the nation’s second greatest sports betting firm, now had 2 million routine customers on its website, 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 two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early stage financing in Silicon Valley’s Y-Combinator program.
In December 2016, it raised $1.3 million from financiers including China’s Tencent and Comcast Ventures in the United States.
Paystack, based in the frenetic Ikeja district of Lagos, said the number of month-to-month deals 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 each and every single month,” said Emmanuel Quartey, Paystack’s head of development.
He said an ecosystem of developers had emerged around Paystack, developing software application to incorporate the platform into websites. “We have actually seen a development in that community and they have actually brought us along,” stated Quartey.
Paystack said it makes it possible for payments for a variety of sports betting firms however also a broad range of companies, from utility 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 investor 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 hoping to take advantage of sports betting.
Industry experts say the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where is more developed.
Russia’s 1XBet and Slovakia’s DOXXbet have actually both set up in Nigeria in the last two years while Italy’s Goldbet led the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian company released in 2015.
NairaBET’s Alabi stated its sales were divided in between shops and online however the ease of electronic payments, cost of running shops and ability for consumers to prevent the preconception of gaming 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 because numerous clients still stay hesitant to invest online.
He stated the business, with about 60 percent of Nigeria’s sports betting market, had an extensive network. Nigerian sports betting shops typically act as social hubs where customers can see soccer free of charge while positioning bets.
At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots 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 stated he started sports betting 3 months back and bets as much as 1,000 naira a day.
“Since I have been playing I have 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)
