Online Betting Firms Gamble on Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) – Online sports betting is booming in soccer-mad Nigeria mostly thanks to payment systems established by homegrown technology companies that are starting to make online organizations more viable.

For several years, mobile payments failed to take off in Nigeria as they have in nations such as Kenya, where Safaricom’s M-Pesa cash transfers have actually fostered a culture of cashless payments.

Fear of electronic scams and sluggish web speeds have actually held Nigerian online consumers back but wagering companies says the new, quick digital payment systems underpinning their websites are altering mindsets towards online transactions.

“We have actually seen substantial growth in the variety of payment options that are offered. All that is definitely altering the video gaming area,” said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria’s business capital.

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

That development has actually been matched by a rise in web payments, according to information 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 very first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of almost 190 million, increasing mobile phone usage and falling information expenses, Nigeria has long been seen as a fantastic opportunity for online services – once consumers feel comfy with electronic payments.

Online sports betting firms state that is happening, though reaching the tens of countless Nigerians without access to banking services stays an obstacle for pure online retailers.

British online sports betting firm Betway opened its first African company 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 industry is going,” Betway’s Nigeria manager Lere Awokoya said.

“The development in the variety of fintechs, and the government as an enabler, has assisted the business to flourish. These technological shifts encouraged Betway to begin operating in Nigeria,” he stated.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy worked up by Nigeria’s involvement on the planet Cup say they are finding the payment systems created by local startups such as Paystack are proving popular online.

Paystack and another regional start-up Flutterwave, both founded in 2016, are providing competition for Nigeria’s Interswitch which was set up in 2002 and was the primary platform utilized by organizations operating in Nigeria.

“We added Paystack as one of our payment options without any excitement, without announcing to our customers, and within a month it soared to the number one most secondhand payment choice on the website,” said Akin Alabi, founder of NairabBET.

He said NairaBET, the nation’s second 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 alternative considering that it was included late 2017.

Paystack was set up by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received 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 frenetic Ikeja district of Lagos, said the number of month-to-month 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 growth.

He said an ecosystem of developers had actually emerged around Paystack, developing software application to integrate the platform into sites. “We have actually seen a growth because neighborhood and they have carried us along,” said Quartey.

it allows payments for a variety of wagering companies however also a broad variety of businesses, from energy services to carry business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme as well as endeavor 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 hoping to tap into sports betting wagering.

Industry specialists state the sector generates about $1 billion a year and is 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 pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian company released in 2015.

NairaBET’s Alabi stated its sales were split in between stores and online however the ease of electronic payments, expense of running stores and capability for consumers to avoid the preconception of gambling 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 essential to have a shop network, not least because many consumers still remain unwilling to invest online.

He stated the company, with about 60 percent of Nigeria’s sports betting market, had a comprehensive network. Nigerian wagering stores often serve as social hubs where clients can watch soccer 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 last heat up game before the World Cup.

Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a TV screen inside. He stated he started sports betting 3 months back and bets up to 1,000 naira a day.

“Since I have been playing I have actually 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; modifying by David Clarke)