Online Betting Firms Gamble On Soccer-mad Nigeria
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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is booming in soccer-mad Nigeria largely thanks to payment systems established by homegrown technology companies that are beginning to make online businesses more feasible.
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 money transfers have actually fostered a culture of cashless payments.
Fear of electronic scams and sluggish internet speeds have actually held Nigerian online customers back however wagering companies states the brand-new, fast digital payment systems underpinning their websites are changing mindsets towards online deals.
"We have seen significant development in the variety of payment solutions that are readily available. All that is absolutely altering the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.
"The operators will opt for whoever is faster, whoever can link to their platform with less concerns and glitches," he stated, adding that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.
That growth 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 central bank and certified banks.
In 2016, there were 14 million web payments worth an overall 132 billion naira ($420 million). Transactions leapt 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 nearly 190 million, rising cellphone use and falling data costs, Nigeria has actually long been seen as an excellent chance for online organizations - once consumers feel comfy with electronic payments.
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Online sports betting firms say that is happening, though reaching the tens of millions of Nigerians without access to banking services remains a challenge for pure online merchants.
British online wagering firm Betway opened its first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.
"There is a steady shift to online now, that is where the industry is going," Betway's Nigeria manager Lere Awokoya said.
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"The development in the variety of fintechs, and the government as an enabler, has actually helped the organization to prosper. These technological shifts encouraged Betway to start operating in Nigeria," he said.
FINTECH COMPETITION
sports betting firms cashing in on the soccer craze whipped up by Nigeria's participation in the World Cup state they are finding the payment systems produced by regional start-ups such as Paystack are showing popular online.
Paystack and another regional start-up Flutterwave, both founded in 2016, are offering competition for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by businesses operating in Nigeria.
"We included Paystack as one of our payment alternatives with no excitement, without announcing to our clients, and within a month it shot up to the primary most secondhand payment choice on the site," stated Akin Alabi, founder of NairabBET.
He said NairaBET, the nation's 2nd biggest sports betting company, now had 2 million regular clients on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment option given that it was included late 2017.
Paystack was established by two Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who got early stage 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 mad Ikeja district of Lagos, stated the number of month-to-month deals 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 every month," stated Emmanuel Quartey, Paystack's head of development.
He said a community of developers had actually emerged around Paystack, developing software to integrate the into websites. "We have actually seen a development because neighborhood and they have brought us along," stated Quartey.
Paystack said it enables payments for a number of wagering firms but also a vast array of companies, from energy services to carry companies to insurance provider Axa Mansard.
Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program in addition to investor 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 accompanied the arrival of foreign investors wanting to tap into sports betting wagering.
Industry experts state the sector generates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the business is more established.
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 company launched in 2015.
NairaBET's Alabi stated its sales were split between stores and online however the ease of electronic payments, cost of running stores and ability for consumers to avoid the preconception of gambling in public suggested online deals would grow.
But regardless 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 numerous clients still stay unwilling to spend online.
He said the company, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian wagering shops frequently function as social hubs where clients can watch soccer totally free of charge while putting bets.
At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans collected to watch Nigeria's final warm up game before the World Cup.
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Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a TV screen inside. He stated he started gambling 3 months ago and bets approximately 1,000 naira a day.
"Since I have been playing I have not won anything however I think that a person 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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