Online Betting Firms Gamble On Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure


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


For several years, mobile payments failed to take off in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have promoted a culture of cashless payments.
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Fear of electronic fraud and sluggish internet speeds have held Nigerian online consumers back however wagering firms says the new, fast digital payment systems underpinning their sites are changing attitudes towards online deals.


"We have seen substantial development in the number of payment services that are offered. All that is certainly changing the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.


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


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 reserve 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 first quarter of 2018 there were nearly 10 million worth 61 billion.


With a young population of nearly 190 million, increasing mobile phone usage and falling data costs, Nigeria has actually long been viewed as a great chance for online services - once consumers feel comfortable with electronic payments.


Online sports betting companies state that is occurring, though reaching the 10s of millions of Nigerians without access to banking services remains a challenge for pure online retailers.


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


"There is a progressive 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 the company to prosper. These technological shifts motivated Betway to start running in Nigeria," he stated.
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FINTECH COMPETITION


sports betting companies cashing in on the soccer frenzy whipped up by Nigeria's participation worldwide Cup state they are discovering the payment systems created by regional start-ups such as Paystack are showing popular online.
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Paystack and another local startup Flutterwave, both founded in 2016, are supplying competition for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by services 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 soared to the number one most used payment alternative on the site," stated Akin Alabi, founder of NairabBET.


He said NairaBET, the country's second most significant sports betting company, now had 2 million regular customers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment option considering that 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 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 mad Ikeja district of Lagos, stated the variety of regular monthly transactions it processed increased 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 each and every single month," said Emmanuel Quartey, Paystack's head of growth.


He stated an ecosystem of designers had around Paystack, producing software application to incorporate the platform into websites. "We have actually seen a development because neighborhood 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 companies however likewise a wide variety of businesses, from energy services to transfer companies to insurance provider Axa Mansard.
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Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme as well as 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 accompanied the arrival of foreign investors wanting to take advantage of sports betting.


Industry professionals state the sector creates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the organization 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 50 percent stake in market leader Bet9ja when the Nigerian firm released in 2015.
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NairaBET's Alabi stated its sales were split between stores and online however the ease of electronic payments, cost of running stores and capability for customers to prevent the preconception of gambling in public suggested online deals would grow.


But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was very important to have a shop network, not least because numerous consumers still stay reluctant to invest online.
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He said the business, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian wagering shops typically function as social centers where clients can enjoy soccer free of charge while positioning bets.


At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans collected to view Nigeria's final heat up game before the World Cup.


Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a TV screen inside. He stated he began gambling three months back and bets as much as 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)