Online Betting Firms Gamble On Soccer-mad Nigeria

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Revision as of 02:11, 1 January 2025

By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is flourishing in soccer-mad Nigeria largely thanks to payment systems developed by homegrown innovation firms that are beginning to make online organizations more viable.
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For years, mobile payments failed to take off 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 scams and sluggish internet speeds have held Nigerian online customers back however wagering firms states the brand-new, fast digital payment systems underpinning their websites are altering attitudes towards online deals.


"We have seen significant growth in the number of payment options that are available. All that is definitely changing the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.


"The operators will go with whoever is quicker, whoever can connect to their platform with less concerns and glitches," he said, including that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.


That development 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 reserve bank and licensed 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 smart phone use and falling data costs, Nigeria has long been viewed as a fantastic chance for online companies - once customers feel comfortable with electronic payments.


Online gaming firms state that is occurring, though reaching the 10s of millions of Nigerians without access to banking services stays an obstacle 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 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 federal government as an enabler, has actually assisted business to prosper. These technological shifts encouraged Betway to begin operating in Nigeria," he said.


FINTECH COMPETITION


sports betting firms capitalizing the soccer craze whipped up by Nigeria's participation worldwide Cup say they are discovering the payment systems developed by local startups such as Paystack are showing popular online.


Paystack and another local start-up Flutterwave, both founded in 2016, are supplying competition for Nigeria's Interswitch which was established in 2002 and was the primary platform used by organizations operating in Nigeria.


"We added Paystack as one of our payment alternatives with no excitement, without announcing to our consumers, and within a month it shot up to the primary most secondhand payment alternative on the site," stated Akin Alabi, creator of NairabBET.


He said NairaBET, the nation's second greatest wagering firm, now had 2 million routine consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative because it was added in late 2017.


Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early phase funding in Silicon Valley's Y-Combinator programme.


In December 2016, it raised $1.3 million from investors including China's Tencent and Comcast Ventures in the United States.


Paystack, based in the mad 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 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 a community of designers had emerged around Paystack, creating software to integrate the platform into sites. "We have actually seen a growth in that neighborhood and they have carried us along," stated Quartey.


Paystack said it enables payments for a variety of sports betting companies but likewise a vast array of services, from utility services to carry companies to insurance provider Axa Mansard.
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Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator along with 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 coincided with the arrival of foreign financiers intending to use sports betting wagering.


Industry specialists say 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 established 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 firm launched in 2015.


NairaBET's Alabi said its sales were divided between shops and online but the ease of electronic payments, expense of running shops and ability for clients to avoid the preconception of gambling in public implied 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 store network, not least since lots of customers still stay unwilling to invest online.


He said the business, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian wagering shops typically function as social centers where customers can enjoy soccer free of charge while placing bets.


At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans collected to enjoy Nigeria's last warm up game before the World Cup.
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Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a TV screen inside. He said he started gambling 3 months earlier and bets approximately 1,000 naira a day.


"Since I have been playing I have 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)
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