Online Betting Firms Gamble On Soccer-mad Nigeria

From Shiapedia

By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria mostly thanks to payment systems established by homegrown innovation companies that are beginning to make online companies more viable.


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


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


"We have actually seen significant growth in the number of payment options that are readily available. All that is definitely altering the video gaming space," said 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 concerns and problems," he stated, including that taxes from sports betting wagering 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 information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central bank and licensed 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 cellphone use and falling information expenses, Nigeria has actually long been seen as an excellent opportunity for online businesses - once consumers feel comfortable with electronic payments.


Online gambling companies state that is occurring, though reaching the tens of countless Nigerians without access to banking services stays an obstacle for pure online merchants.


British online sports betting firm Betway opened its first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released 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 said.
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"The development in the number of fintechs, and the federal government as an enabler, has helped business to prosper. These technological shifts encouraged Betway to start running in Nigeria," he said.


FINTECH COMPETITION


sports betting firms capitalizing the soccer craze whipped up by Nigeria's participation in the World Cup say they are discovering the payment systems created by regional startups such as Paystack are showing popular online.
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Paystack and another local startup Flutterwave, both founded in 2016, are providing competition for Nigeria's Interswitch which was set up in 2002 and was the primary platform utilized by organizations operating in Nigeria.


"We included Paystack as one of our payment alternatives without any fanfare, without revealing to our clients, and within a month it shot up to the top most secondhand payment option on the site," stated Akin Alabi, founder of NairabBET.


He said NairaBET, the nation's 2nd biggest sports betting firm, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative because it was added in late 2017.


Paystack was set up by two Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who got early stage funding 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 month-to-month deals 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.


He said an ecosystem of developers had actually emerged around Paystack, developing software to incorporate the platform into sites. "We have seen a growth because community and they have actually brought us along," said Quartey.


Paystack stated it allows payments for a variety of wagering companies but also a large range of businesses, from energy services to transport business to insurance company Axa Mansard.


Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme 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 accompanied the arrival of foreign financiers wishing to take advantage of sports betting.


Industry specialists state the sector produces about $1 billion a year and is likely to grow faster than in South Africa and Kenya where 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 was ahead of the pattern, taking a half stake in market leader Bet9ja when the Nigerian company released in 2015.


said its sales were split in between shops and online however the ease of electronic payments, cost of running stores and ability for clients to avoid the preconception of gaming in public indicated online transactions would grow.


But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was crucial to have a store network, not least due to the fact that many consumers still remain reluctant to spend online.


He said the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian wagering shops frequently act as social hubs where clients can view soccer complimentary of charge while putting bets.


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


"Since I have been playing I have actually not won anything but I believe that one 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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