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 viable.

For years, mobile payments failed to remove in Nigeria as they have in nations such as Kenya, where Safaricom’s M-Pesa money transfers have actually promoted a culture of cashless payments.

Fear of electronic fraud and slow internet speeds have actually held Nigerian online consumers back however sports betting firms states the new, fast digital payment systems underpinning their sites are altering attitudes towards online transactions.

“We have seen substantial growth in the number of payment options that are available. All that is certainly altering the gaming space,” stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria’s industrial capital.

“The operators will opt for whoever is much faster, whoever can link to their platform with less issues 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 development has actually been matched by an increase in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central bank and licensed 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, rising cellphone usage and falling information expenses, Nigeria has long been seen as a great opportunity for online businesses – once customers feel comfortable with electronic payments.

Online gaming companies state that is taking place, though reaching the tens of millions of Nigerians without access to banking services stays an obstacle for pure online retailers.

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

“There is a gradual shift to online now, that is where the industry is going,” Betway’s Nigeria manager Lere Awokoya stated.

“The growth in the variety of fintechs, and the government as an enabler, has actually assisted business to prosper. These technological shifts encouraged Betway to begin operating in Nigeria,” he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer craze whipped up by Nigeria’s involvement in the World Cup state they are discovering the payment systems developed by local startups such as Paystack are proving popular online.

Paystack and another regional start-up Flutterwave, both founded in 2016, are offering competition for Nigeria’s Interswitch which was set up in 2002 and was the main platform used by organizations running in Nigeria.

“We included Paystack as one of our payment alternatives with no fanfare, without revealing to our customers, and within a month it shot up to the number one most used payment alternative on the website,” said Akin Alabi, creator of NairabBET.

He stated NairaBET, the nation’s second greatest 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 considering that it was included late 2017.

Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received 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 mad Ikeja district of Lagos, stated the variety 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 each and every single month,” stated Emmanuel Quartey, Paystack’s head of development.

He stated a community of developers had emerged around Paystack, producing software application to incorporate the platform into sites. “We have actually seen a development because community and they have actually brought us along,” stated Quartey.

Paystack stated it makes it possible for payments for a number of sports betting companies however likewise a large range of organizations, from energy services to transport business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also 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 corresponded with the arrival of foreign financiers hoping to take advantage of sports betting.

Industry professionals 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 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 Bet9ja when the Nigerian company introduced in 2015.

NairaBET’s Alabi stated its sales were divided in between shops and online but the ease of electronic payments, cost of running shops and capability for clients to avoid the stigma of gaming in public meant online transactions would grow.

But in spite of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – stated it was necessary to have a store network, not least because numerous customers still stay unwilling to spend online.

He said the company, with about 60 percent of Nigeria’s sports betting market, had an extensive network. Nigerian wagering shops frequently act as social centers where consumers 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 watch Nigeria’s final warm up video 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 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 believe that a person day I will win,” stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)

If you loved this write-up and you would such as to get additional facts concerning sports betting kindly check out our web site.