Online Betting Firms Gamble On Soccer-mad Nigeria

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Revision as of 23:25, 30 December 2024

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By Alexis Akwagyiram and Didi Akinyelure


LAGOS, June 25 (Reuters) - Online sports betting is expanding in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown technology companies that are beginning to make online businesses more viable.
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For several 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 promoted a culture of cashless payments.


Fear of electronic fraud and sluggish web speeds have held Nigerian online customers back but wagering firms says the new, fast digital payment systems underpinning their sites are altering mindsets towards online deals.


"We have seen significant development in the number of payment solutions that are readily available. All that is absolutely changing the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.


"The operators will choose whoever is much faster, whoever can link to their platform with less issues 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 been matched by a rise 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 first quarter of 2018 there were nearly 10 million worth 61 billion.


With a young population of nearly 190 million, rising smart phone use and falling information expenses, Nigeria has long been seen as a terrific opportunity for online companies - once customers feel comfy with electronic payments.


Online gambling companies say that is occurring, though reaching the tens of millions of Nigerians without access to banking services remains a challenge for pure online sellers.


British online wagering firm Betway opened its first African service 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 industry is going," Betway's Nigeria manager Lere Awokoya stated.


"The growth in the variety of fintechs, and the federal government as an enabler, has actually assisted business to prosper. These technological shifts encouraged Betway to start operating in Nigeria," he said.


FINTECH COMPETITION


sports betting companies capitalizing the soccer craze whipped up by Nigeria's involvement on the planet Cup say they are discovering the payment systems created by regional startups such as Paystack are proving popular online.


Paystack and another local 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 used by businesses running in Nigeria.


"We added Paystack as one of our payment options without any fanfare, without revealing to our customers, and within a month it shot up to the top most secondhand payment alternative on the site," stated Akin Alabi, creator of NairabBET.


He stated NairaBET, the country's second most significant sports betting firm, now had 2 million routine clients on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment option since it was added in late 2017.


Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase financing in Silicon Valley's Y-Combinator program.


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 frenetic Ikeja district of Lagos, said the variety of monthly transactions it processed increased 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," stated Emmanuel Quartey, Paystack's head of growth.


He stated a community of developers had actually emerged around Paystack, creating software application to integrate the platform into sites. "We have seen a growth because community and they have actually carried us along," said Quartey.


Paystack said it enables payments for a number of wagering companies but likewise a large range of companies, from utility services to carry business to insurance provider Axa Mansard.


Flutterwave, co-founded by Nigerian business owner 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 actually corresponded with the arrival of foreign investors hoping to take advantage of .


Industry professionals state the sector produces about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the organization is more established.


Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last 2 years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian company launched in 2015.


NairaBET's Alabi said its sales were divided between shops and online but the ease of electronic payments, cost of running stores and ability for customers to prevent the stigma of gambling 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 crucial to have a store network, not least due to the fact that many consumers still remain reluctant to invest online.


He stated the company, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian sports betting shops frequently serve as social hubs where consumers can see soccer free of charge while positioning bets.


At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans gathered to see Nigeria's final heat up video game before the World Cup.
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Richard Onuka, a factory worker who earns 25,000 naira a month, was focused on a television screen inside. He said he started sports betting 3 months earlier and bets as much as 1,000 naira a day.


"Since I have actually been playing I have 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; editing by David Clarke)