Online Betting Firms Gamble On Soccer-mad Nigeria

From Shiapedia

By Alexis Akwagyiram and Didi Akinyelure


LAGOS, June 25 (Reuters) - Online sports betting is flourishing in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown technology firms that are beginning to make online companies more practical.


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


Fear of electronic fraud and slow web speeds have actually held Nigerian online customers back but wagering firms says the new, fast digital payment systems underpinning their websites are changing attitudes towards online deals.


"We have seen substantial growth in the variety of payment services that are readily available. All that is certainly altering the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.
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"The operators will choose whoever is much faster, whoever can link to their platform with less issues and problems," he stated, adding that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.


That growth 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 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 almost 10 million worth 61 billion.


With a young population of almost 190 million, increasing cellphone usage and falling data costs, Nigeria has actually long been seen as a great opportunity for online businesses - once customers feel comfy with electronic payments.


Online sports betting companies say that is taking place, though reaching the tens of countless Nigerians without access to banking services remains an obstacle for pure online sellers.


British online wagering firm Betway opened its very first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.


"There is a steady shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya stated.


"The growth in the number of fintechs, and the government as an enabler, has helped business to prosper. These technological shifts motivated Betway to start operating in Nigeria," he stated.


FINTECH COMPETITION


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


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


"We included Paystack as one of our payment options without any excitement, without announcing to our customers, and within a month it shot up to the number one most secondhand payment choice on the website," said Akin Alabi, creator of NairabBET.


He said NairaBET, the country's 2nd greatest 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 choice since it was included late 2017.


Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage funding in Silicon Valley's Y-Combinator program.


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 mad Ikeja district of Lagos, stated the number of monthly transactions it processed 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," stated Emmanuel Quartey, Paystack's head of growth.
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He said an ecosystem of developers had actually emerged around Paystack, developing software application to integrate the platform into websites. "We have seen a growth because community and they have actually brought us along," said Quartey.
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Paystack stated it makes it possible for payments for a variety of wagering firms but likewise a vast array of companies, from utility services to carry companies to insurance provider Axa Mansard.


Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program 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 actually accompanied the arrival of foreign investors wishing to use sports betting wagering.


Industry professionals state 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.
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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 half stake in market leader Bet9ja when the Nigerian firm introduced in 2015.


NairaBET's Alabi stated its sales were split between shops and online however the ease of electronic payments, cost of running shops and capability for consumers to prevent the preconception of gaming in public meant online transactions would grow.


But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a shop network, not least because lots of customers still remain unwilling to spend online.


He said the business, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian wagering shops often function as social hubs where consumers can see soccer totally free of charge while placing bets.


At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans gathered to watch Nigeria's last heat 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 three months earlier and bets approximately 1,000 naira a day.


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