Online Betting Firms Gamble On Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure


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


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


Fear of electronic fraud and sluggish web speeds have actually held Nigerian online customers back however sports betting companies says the brand-new, fast digital payment systems underpinning their sites are altering attitudes towards online deals.


"We have seen substantial development in the variety of payment solutions that are readily available. All that is certainly altering the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.


"The operators will opt for whoever is much faster, whoever can connect to their platform with less issues and problems," he said, adding that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.


That development 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 main bank and licensed banks.


In 2016, there were 14 million web payments worth a total 132 billion naira ($420 million). 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.
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With a young population of almost 190 million, increasing smart phone usage and falling data costs, Nigeria has actually long been seen as a great opportunity for online companies - once consumers feel comfy with electronic payments.


Online gaming firms say that is happening, though reaching the tens of countless Nigerians without access to banking services remains a difficulty for pure online retailers.
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British online wagering firm Betway opened its first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.
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"There is a progressive shift to online now, that is where the market is going," Betway's Nigeria manager Lere Awokoya stated.


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


sports betting firms cashing in on the soccer craze whipped up by Nigeria's participation on the planet Cup say they are discovering the payment systems developed by local start-ups such as Paystack are proving popular online.


Paystack and another local startup Flutterwave, both founded in 2016, are providing competitors 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 choices with no fanfare, without announcing to our clients, and within a month it soared to the top most secondhand payment choice on the site," stated Akin Alabi, creator of NairabBET.
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He said NairaBET, the nation's second biggest wagering company, now had 2 million regular customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment choice given that it was included in late 2017.


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


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, said the variety of regular monthly transactions it processed increased 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 single month," said Emmanuel Quartey, Paystack's head of growth.
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He stated a community of designers had emerged around Paystack, producing software application to incorporate the platform into sites. "We have seen a development because community and they have actually brought us along," said Quartey.


Paystack said it allows payments for a number of wagering firms however also a large range of organizations, from utility services to carry business to insurer Axa Mansard.


Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program in addition to endeavor capitalists 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 financiers hoping to take advantage of sports betting.


Industry professionals state the sector produces about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the service is more established.


Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last two years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian firm released in 2015.


NairaBET's Alabi stated its sales were split in between shops and online however the ease of electronic payments, expense of running stores and capability for customers to prevent the preconception of gambling in public suggested online transactions would grow.


But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was important to have a shop network, not least because lots of customers still remain hesitant to invest online.


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


At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans collected to see Nigeria's last warm up game before the World Cup.


Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a TV screen inside. He said he started gambling three months earlier and bets approximately 1,000 naira a day.


"Since I have actually 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)