Online Betting Firms Gamble On Soccer-mad Nigeria

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Revision as of 16:47, 17 December 2024

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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is flourishing in soccer-mad Nigeria mainly thanks to payment systems established by homegrown technology firms that are beginning to make online businesses more practical.
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For several years, mobile payments stopped working to take off in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa cash transfers have actually promoted a culture of cashless payments.


Fear of electronic fraud and slow internet speeds have held Nigerian online consumers back however wagering firms states the new, quick digital payment systems underpinning their websites are changing mindsets towards online transactions.


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


"The operators will choose whoever is quicker, whoever can link to their platform with less issues and problems," he said, including 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 data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main 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 nearly 10 million worth 61 billion.


With a young population of almost 190 million, rising mobile phone use and falling information costs, Nigeria has actually long been seen as a terrific opportunity for online services - once consumers feel comfortable with electronic payments.


Online gambling firms say that is occurring, though reaching the 10s of millions of Nigerians without access to banking services stays a challenge for pure online sellers.


British online sports betting company Betway opened its very 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 government as an enabler, has actually helped the service to flourish. These technological shifts encouraged Betway to start running in Nigeria," he stated.


FINTECH COMPETITION


sports betting companies cashing in on the soccer frenzy whipped up by Nigeria's participation in the World Cup state they are finding the payment systems created by local start-ups such as Paystack are proving popular online.


Paystack and another regional startup Flutterwave, both founded in 2016, are supplying competition for Nigeria's Interswitch which was set up in 2002 and was the main platform utilized by businesses operating in Nigeria.


"We included Paystack as one of our payment choices without any excitement, without announcing to our consumers, and within a month it shot up to the number one most pre-owned payment option 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 site, up from 500,000 in 2013, and Paystack remained the most popular payment choice because it was added in late 2017.


Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase financing in Silicon Valley's Y-Combinator programme.


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


Paystack, based in the frenetic Ikeja district of Lagos, stated the number of regular monthly 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 single month," said Emmanuel Quartey, Paystack's head of growth.
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He said an environment of developers had emerged around Paystack, developing software to incorporate the platform into sites. "We have seen a growth because community and they have actually carried us along," said Quartey.


Paystack said it makes it possible for payments for a variety of but likewise a wide variety of businesses, from utility services to transport business to insurance company Axa Mansard.


Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme along with venture capitalists 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 corresponded with the arrival of foreign financiers wanting to use sports betting.


Industry specialists say the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the business is more established.


Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last two years while Italy's Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian firm launched in 2015.


NairaBET's Alabi said its sales were divided in between shops and online but the ease of electronic payments, cost of running shops and capability for consumers to avoid the preconception of gaming in public suggested online deals would grow.


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


He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian wagering stores frequently act as social centers where customers can see soccer totally free of charge while putting bets.


At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to watch Nigeria's last warm up video game before the World Cup.
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Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a TV screen inside. He said he began gambling 3 months back and bets approximately 1,000 naira a day.


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