Online Betting Firms Gamble On Soccer-mad Nigeria

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By Alexis Akwagyiram and Didi Akinyelure


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


For several years, mobile payments stopped working to take off 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 scams and slow internet speeds have held Nigerian online consumers back however wagering companies states the brand-new, quick digital payment systems underpinning their sites are altering mindsets towards online transactions.


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


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


That growth has actually been matched by an increase 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 very first quarter of 2018 there were almost 10 million worth 61 billion.


With a young population of almost 190 million, increasing cellphone use and falling information costs, Nigeria has actually long been seen as an excellent opportunity for online companies - once customers feel comfortable with electronic payments.


Online sports betting companies state that is happening, though reaching the tens of countless Nigerians without access to banking services remains a difficulty for pure online sellers.


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


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


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


sports betting companies cashing in on the soccer craze worked up by Nigeria's involvement in the World Cup state they are discovering the payment systems produced by regional startups such as Paystack are showing popular online.


Paystack and another local start-up Flutterwave, both founded in 2016, are supplying competition for Nigeria's Interswitch which was set up in 2002 and was the main platform used by services operating in Nigeria.


"We included Paystack as one of our payment choices with no fanfare, without revealing to our clients, and within a month it shot up to the number one most pre-owned payment alternative on the website," said Akin Alabi, creator of NairabBET.


He said NairaBET, the country's second biggest sports betting firm, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment alternative since it was included late 2017.


Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase 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, said the number of monthly deals 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 every month," said Emmanuel Quartey, Paystack's head of growth.


He stated an ecosystem of developers had actually emerged around Paystack, producing software application to incorporate the platform into websites. "We have seen a growth because community and they have carried us along," stated Quartey.


Paystack said it enables payments for a variety of sports betting companies but likewise a large range of companies, from utility services to transfer companies to insurer Axa Mansard.


Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme as well as investor Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million in 2015.
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FOREIGN INVESTMENT


Shifts in Nigeria's payment culture have actually coincided with the arrival of foreign investors wishing to use sports betting.


Industry specialists 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.


Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last 2 years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian firm launched in 2015.


NairaBET's Alabi said its sales were split between shops and online but the ease of electronic payments, cost of running shops and ability for clients to avoid the stigma of sports betting in public implied online transactions would grow.


But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was essential to have a store network, not least due to the fact that many clients still remain reluctant to invest online.


He stated the company, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian sports betting shops typically function as social centers where clients can watch soccer complimentary of charge while positioning bets.


At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to view Nigeria's final warm up game before the World Cup.
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Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a TV screen inside. He stated 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 a person day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi in Lagos; editing by David Clarke)