Online Betting Firms Gamble On Soccer-mad Nigeria

From Shiapedia

By Alexis Akwagyiram and Didi Akinyelure


LAGOS, June 25 (Reuters) - Online sports betting wagering is booming in soccer-mad Nigeria mostly thanks to payment systems established by homegrown innovation companies that are starting to make online companies more viable.


For several years, mobile payments failed to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have fostered a culture of cashless payments.


Fear of electronic fraud and slow internet speeds have actually held Nigerian online customers back however wagering firms says the brand-new, quick digital payment systems underpinning their sites are altering mindsets towards online deals.


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


"The operators will go with whoever is quicker, whoever can connect to their platform with less issues and problems," he stated, 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 an increase in web payments, according to data 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 very first quarter of 2018 there were almost 10 million worth 61 billion.


With a young population of nearly 190 million, rising smart phone use and falling information costs, Nigeria has actually long been seen as a fantastic chance for online services - once consumers feel comfy with electronic payments.
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Online gambling firms state that is occurring, though reaching the 10s of millions of Nigerians without access to banking services stays an obstacle for pure online merchants.


British online wagering 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 steady shift to online now, that is where the market is going," Betway's Nigeria manager Lere Awokoya said.


"The growth in the number of fintechs, and the federal government as an enabler, has helped business to grow. These technological shifts encouraged Betway to begin operating in Nigeria," he said.


FINTECH COMPETITION


sports betting firms capitalizing the soccer frenzy whipped up by in the World Cup state they are finding the payment systems created by regional startups such as Paystack are proving popular online.


Paystack and another local startup Flutterwave, both established in 2016, are supplying competitors for Nigeria's Interswitch which was established in 2002 and was the main platform utilized by companies operating in Nigeria.


"We included Paystack as one of our payment choices with no fanfare, without revealing to our customers, and within a month it shot up to the primary most secondhand payment option on the site," said Akin Alabi, creator of NairabBET.


He stated NairaBET, the nation's 2nd most significant sports betting company, now had 2 million routine customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment option because it was included late 2017.


Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received 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, said the number of monthly 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 an ecosystem of developers had emerged around Paystack, producing software application to integrate the platform into websites. "We have seen a development in that community and they have carried us along," said Quartey.


Paystack said it enables payments for a variety of wagering companies but likewise a vast array of organizations, from energy services to transfer business to insurance provider Axa Mansard.


Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program as well as 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 accompanied the arrival of foreign investors hoping to tap into sports betting wagering.


Industry experts state the sector creates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where 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 was ahead of 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 divided between shops and online but the ease of electronic payments, cost of running shops and capability for clients to prevent the preconception of sports betting in public meant online deals would grow.
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But regardless 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 remain reluctant to spend online.


He said the company, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian wagering stores typically serve as social hubs where customers can see soccer complimentary of charge while placing bets.
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At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to enjoy Nigeria's last warm up video game before the World Cup.


Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a television screen inside. He stated he began sports betting three months earlier and bets approximately 1,000 naira a day.


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