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 firms that are starting to make online companies 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 actually fostered a culture of cashless payments.

Fear of electronic fraud and slow web speeds have actually held Nigerian online customers back however sports betting firms states the brand-new, quick digital payment systems underpinning their websites are altering attitudes towards online deals.

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

“The operators will opt for whoever is quicker, whoever can link to their platform with less issues and problems,” he stated, adding that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That growth has 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 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, rising mobile phone usage and falling information expenses, Nigeria has long been viewed as an excellent opportunity for online companies – once consumers feel comfortable with electronic payments.

Online gaming companies state that is happening, though reaching the 10s of countless Nigerians without access to banking services remains a difficulty for pure online sellers.

British online wagering company Betway opened its first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.

“There is a gradual shift to online now, that is where the market is going,” Betway’s Nigeria supervisor Lere Awokoya said.

“The development in the number of fintechs, and the government as an enabler, has assisted the service to thrive. These technological shifts motivated Betway to start running in Nigeria,” he said.

FINTECH COMPETITION

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

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

“We added Paystack as one of our payment options without any fanfare, without revealing to our consumers, and within a month it shot up to the primary most pre-owned payment alternative on the site,” said Akin Alabi, founder of NairabBET.

He stated NairaBET, the nation’s 2nd biggest wagering firm, now had 2 million routine clients on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative considering that it was included in late 2017.

Paystack was established by two Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who got early phase funding 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, stated the variety 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 every month,” stated Emmanuel Quartey, Paystack’s head of growth.

He said an ecosystem of developers had actually emerged around Paystack, creating software application to incorporate the platform into websites. “We have seen a growth in that neighborhood and they have actually brought us along,” stated Quartey.

Paystack said it makes it possible for payments for a number of sports betting companies however likewise a wide variety of companies, from utility services to transport business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme 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 actually coincided with the arrival of foreign investors intending to take advantage of sports betting.

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

Russia’s 1XBet and Slovakia’s DOXXbet have both established in Nigeria in the last 2 years while Italy’s Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET’s Alabi said its sales were split in between stores and online but the ease of electronic payments, cost of running stores and ability for consumers to prevent the preconception of sports betting in public implied online transactions would grow.

But in spite of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – said it was essential to have a store network, not least since numerous customers still stay reluctant to invest online.

He stated the business, with about 60 percent of Nigeria’s sports betting wagering market, had a comprehensive network. Nigerian wagering shops typically serve as social centers where clients can watch soccer free of charge while placing bets.

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

Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a TV screen inside. He stated he began sports betting 3 months earlier and bets as much as 1,000 naira a day.

“Since I have actually been playing I have actually not won anything however 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)