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 innovation firms that are beginning to make online organizations more feasible.

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

Fear of electronic scams and sluggish internet speeds have held Nigerian online consumers back but sports betting companies states the new, fast digital payment systems underpinning their websites are altering attitudes towards online deals.

“We have actually seen substantial growth in the variety of payment solutions that are readily available. All that is definitely altering the video gaming space,” said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria’s industrial capital.

“The operators will opt for whoever is much faster, whoever can link to their platform with less problems and glitches,” he stated, including that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That growth 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 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 almost 10 million worth 61 billion.

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

Online gaming companies state that is occurring, though reaching the tens of countless Nigerians without access to banking services stays a difficulty for pure online sellers.

British online sports betting firm Betway opened its very first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.

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

“The growth in the variety of fintechs, and the federal government as an enabler, has assisted the service to prosper. These technological shifts motivated Betway to begin running in Nigeria,” he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer craze worked up by Nigeria’s involvement worldwide Cup state they are finding the payment systems developed by regional startups such as Paystack are proving popular online.

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

“We added Paystack as one of our payment choices with no fanfare, without revealing to our customers, and within a month it soared to the number one most secondhand payment choice on the site,” said Akin Alabi, creator of NairabBET.

He said NairaBET, the nation’s 2nd most significant sports betting firm, now had 2 million routine clients on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative given that it was included late 2017.

Paystack was set up by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase 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 regular monthly transactions 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.

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

Paystack stated it allows payments for a variety of sports betting firms but likewise a wide variety of companies, from energy services to transfer companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program 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 intending to use sports betting wagering.

Industry professionals state the sector produces 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 both set up in Nigeria in the last two years while Italy’s Goldbet led the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET’s Alabi said its sales were divided in between shops and online however the ease of electronic payments, expense of running stores and capability for customers to avoid the preconception of sports betting in public indicated online transactions would grow.

But in spite of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – said it was necessary to have a shop network, not least since many consumers still remain reluctant to invest online.

He stated the business, with about 60 percent of Nigeria’s sports betting market, had a substantial network. Nigerian wagering stores often act as social hubs where customers can see soccer free of charge while putting bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, dozens of soccer fans gathered to view Nigeria’s last heat up game before the World Cup.

Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a television screen inside. He stated he started sports betting three months ago and bets up to 1,000 naira a day.

“Since I have been playing I have not won anything however I think that a person day I will win,” said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)