Online Betting Firms Gamble On Soccer-mad Nigeria
By Alexis Akwagyiram and Didi Akinyelure
LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in mainly thanks to payment systems established by homegrown technology firms that are beginning to make online companies more practical.
For many years, mobile payments failed to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have fostered a culture of cashless payments.
Fear of electronic scams and sluggish internet speeds have actually held Nigerian online consumers back however sports betting firms says the new, quick digital payment systems underpinning their websites are altering attitudes towards online deals.
"We have seen considerable development in the number of payment options that are available. All that is absolutely changing the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.
"The operators will opt for whoever is much faster, whoever can connect to their platform with less problems and problems," he said, including that taxes from sports betting wagering in Lagos State rose 30 percent to 40 percent in 2017 from 2016.
That growth has 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 an overall 132 billion naira ($420 million). Transactions leapt 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 almost 190 million, rising smart phone usage and falling information expenses, Nigeria has actually long been seen as a terrific chance for online companies - once consumers feel comfortable with electronic payments.
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Online gambling companies state that is happening, though reaching the tens of millions of Nigerians without access to banking services stays a challenge for pure online merchants.
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British online sports betting firm Betway opened its very first African company 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 market is going," Betway's Nigeria supervisor Lere Awokoya said.
"The growth in the number of fintechs, and the government as an enabler, has actually assisted the service to prosper. These technological shifts motivated Betway to begin running in Nigeria," he stated.
FINTECH COMPETITION
sports betting firms capitalizing the soccer craze worked up by Nigeria's participation worldwide Cup state they are finding the payment systems produced by local startups such as Paystack are proving popular online.
Paystack and another regional startup Flutterwave, both established in 2016, are providing competitors for Nigeria's Interswitch which was established in 2002 and was the main platform used by businesses running in Nigeria.
"We added Paystack as one of our payment options without any fanfare, without announcing to our consumers, and within a month it soared to the number one most used payment alternative on the website," stated Akin Alabi, founder of NairabBET.
He said NairaBET, the country's second greatest wagering company, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice given that it was added in late 2017.
Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage financing in Silicon Valley's Y-Combinator programme.
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 frenetic Ikeja district of Lagos, said the number of regular monthly deals it processed rose 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 development.
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He stated a community of designers had emerged around Paystack, creating software application to incorporate the platform into sites. "We have actually seen a growth in that neighborhood and they have actually brought us along," stated Quartey.
Paystack stated it enables payments for a number of wagering companies however likewise a wide variety of organizations, from energy services to transport companies to insurer Axa Mansard.
Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme in addition to investor 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 coincided with the arrival of foreign financiers wanting to tap into sports betting wagering.
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Industry experts 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 developed.
Russia's 1XBet and Slovakia's DOXXbet have both set up in Nigeria in the last two years while Italy's Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm released in 2015.
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NairaBET's Alabi said its sales were divided between shops and online however the ease of electronic payments, cost of running stores and capability for consumers to prevent the stigma 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 crucial to have a shop network, not least due to the fact that lots of clients still remain unwilling to spend online.
He stated the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting shops frequently act as social centers where customers can watch soccer free of charge while positioning bets.
At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans collected to view Nigeria's last heat up video game before the World Cup.
Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a TV screen inside. He said he started gambling 3 months earlier and bets as much as 1,000 naira a day.
"Since I have actually been playing I have not won anything but I believe that one day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)