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 largely thanks to payment systems developed by homegrown technology companies that are starting to make online companies more viable.


For years, mobile payments stopped working to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa cash transfers have actually fostered a culture of cashless payments.
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Fear of electronic fraud and sluggish internet speeds have actually held Nigerian online customers back however wagering firms states the new, fast digital payment systems underpinning their sites are altering attitudes towards online deals.


"We have seen considerable growth in the variety of payment solutions that are available. All that is absolutely altering the gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.


"The operators will go with whoever is quicker, whoever can link to their platform with less issues and glitches," he stated, including that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.
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That growth has 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 a total 132 billion naira ($420 million). Transactions jumped to 29 million worth 185 billion in 2017 and in the first quarter of 2018 there were almost 10 million worth 61 billion.


With a young population of nearly 190 million, increasing mobile phone use and falling data costs, Nigeria has long been seen as an excellent chance for online organizations - once customers feel comfy with electronic payments.


firms say that is taking place, 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 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 development in the variety of fintechs, and the government as an enabler, has helped business to prosper. These technological shifts motivated Betway to start running in Nigeria," he stated.
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FINTECH COMPETITION


sports betting firms cashing in on the soccer frenzy worked up by Nigeria's involvement in the World Cup say they are discovering the payment systems developed by local startups such as Paystack are showing popular online.


Paystack and another local startup Flutterwave, both established in 2016, are providing competition for Nigeria's Interswitch which was established in 2002 and was the primary platform used by companies operating in Nigeria.


"We added Paystack as one of our payment alternatives with no excitement, without revealing to our clients, and within a month it shot up to the number one most pre-owned payment choice on the site," stated Akin Alabi, founder of NairabBET.


He stated NairaBET, the nation's 2nd most significant sports betting firm, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice since it was included late 2017.


Paystack was established by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early stage funding in Silicon Valley's Y-Combinator programme.


In December 2016, it raised $1.3 million from investors consisting of China's Tencent and Comcast Ventures in the United States.
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Paystack, based in the frenetic Ikeja district of Lagos, stated the variety of regular monthly transactions 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," stated Emmanuel Quartey, Paystack's head of development.


He said an environment of designers had actually emerged around Paystack, developing software application to incorporate the platform into sites. "We have actually seen a growth because neighborhood and they have carried us along," said Quartey.


Paystack stated it enables payments for a number of wagering companies however likewise a large range of services, from energy services to carry business to insurance provider Axa Mansard.


Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program as well as venture capitalists 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 actually corresponded with the arrival of foreign investors wishing to take advantage of sports betting wagering.


Industry specialists state the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where business is more established.


Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last two years while Italy's Goldbet led the trend, taking a half stake in market leader Bet9ja when the Nigerian firm released in 2015.
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NairaBET's Alabi said its sales were split in between shops and online however the ease of electronic payments, cost of running stores and ability for consumers to avoid the preconception of sports betting in public implied online deals would grow.


But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a store network, not least because numerous clients still remain reluctant to spend online.


He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian wagering shops often act as social centers where clients can enjoy soccer complimentary of charge while positioning bets.


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


Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a TV screen inside. He said he began sports betting three months earlier and bets as much as 1,000 naira a day.


"Since I have actually been playing I have actually not won anything however 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)