Online Betting Firms Gamble on Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) – Online sports betting is flourishing in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown innovation companies that are beginning to make online organizations more feasible.

For many years, mobile payments failed to remove 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 scams and sluggish web speeds have held Nigerian online customers back however wagering companies states the brand-new, fast digital payment systems underpinning their sites are changing attitudes towards online deals.

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

“The operators will choose whoever is faster, whoever can link to their platform with less concerns and problems,” he stated, adding that taxes from sports betting wagering in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That growth 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 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, phone usage and falling information costs, Nigeria has actually long been seen as a fantastic opportunity for online services – once consumers feel comfy with electronic payments.

Online gaming firms state that is occurring, though reaching the tens of countless Nigerians without access to banking services stays an obstacle for pure online sellers.

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

“The growth in the number of fintechs, and the federal government as an enabler, has actually assisted the service to thrive. These technological shifts encouraged Betway to start operating in Nigeria,” he stated.

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze whipped up by Nigeria’s participation in the World Cup say they are finding the payment systems created by regional startups such as Paystack are proving popular online.

Paystack and another regional start-up Flutterwave, both established in 2016, are providing competitors for Nigeria’s Interswitch which was established in 2002 and was the main platform used by services running in Nigeria.

“We included Paystack as one of our payment alternatives with no fanfare, without revealing to our customers, and within a month it shot up to the top most secondhand payment alternative on the website,” stated Akin Alabi, founder of NairabBET.

He said NairaBET, the country’s second most significant sports betting company, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice since it was included in late 2017.

Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage financing in Silicon Valley’s Y-Combinator programme.

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 mad Ikeja district of Lagos, stated the number of 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 single month,” stated Emmanuel Quartey, Paystack’s head of growth.

He stated an ecosystem of designers had actually emerged around Paystack, producing software application to incorporate the platform into sites. “We have seen a development because neighborhood and they have actually carried us along,” said Quartey.

Paystack said it enables payments for a variety of sports betting companies however also a large range of services, from energy services to carry companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme along with investor 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 coincided with the arrival of foreign investors wanting to tap into sports betting wagering.

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 company is more developed.

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 said its sales were split between stores and online but the ease of electronic payments, expense of running stores and capability for consumers to prevent the preconception of gaming in public suggested online transactions would grow.

But regardless of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – stated it was crucial to have a store network, not least since lots of clients still remain hesitant to spend online.

He said the company, with about 60 percent of Nigeria’s sports betting wagering market, had a substantial network. Nigerian wagering shops often serve as social hubs where consumers can watch soccer totally free of charge while putting bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans gathered to watch Nigeria’s final warm up game before the World Cup.

Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a television screen inside. He said he began gambling three months earlier and bets approximately 1,000 naira a day.

“Since I have been playing I have actually not won anything however I think that a person day I will win,” stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)