Online Betting Firms Gamble on Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) – Online sports betting wagering is flourishing in soccer-mad Nigeria mostly thanks to payment systems established by homegrown innovation firms that are beginning to make online organizations more viable.

For many years, mobile payments stopped working 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 slow internet speeds have actually held Nigerian online customers back however sports betting firms says the new, fast digital payment systems underpinning their websites are altering mindsets towards online transactions.

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

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

That development has been by a rise in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main 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 nearly 10 million worth 61 billion.

With a young population of almost 190 million, increasing smart phone use and falling information expenses, Nigeria has actually long been seen as a great opportunity for online businesses – once consumers feel comfortable with electronic payments.

Online gaming companies state that is occurring, though reaching the 10s of millions of Nigerians without access to banking services remains an obstacle for pure online merchants.

British online sports betting firm Betway opened its first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced 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 development in the variety of fintechs, and the government as an enabler, has helped business to thrive. These technological shifts motivated Betway to begin running in Nigeria,” he stated.

FINTECH COMPETITION

sports betting companies capitalizing the soccer craze worked up by Nigeria’s involvement in the World Cup state they are finding the payment systems produced by local startups such as Paystack are showing popular online.

Paystack and another local start-up Flutterwave, both established in 2016, are providing competition for Nigeria’s Interswitch which was established in 2002 and was the primary platform utilized by businesses operating in Nigeria.

“We included Paystack as one of our payment choices without any excitement, without announcing to our customers, and within a month it soared to the number one most secondhand payment alternative on the site,” stated Akin Alabi, creator of NairabBET.

He said NairaBET, the nation’s second most significant wagering company, now had 2 million regular customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment option considering that it was included late 2017.

Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase funding in Silicon Valley’s Y-Combinator programme.

In December 2016, it raised $1.3 million from financiers consisting of China’s Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, said the variety of regular monthly transactions it processed rose 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 single month,” said Emmanuel Quartey, Paystack’s head of development.

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

Paystack stated it enables payments for a number of wagering companies however likewise a large range of companies, from utility services to carry business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to venture capitalists 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 accompanied the arrival of foreign financiers hoping to take advantage of sports betting.

Industry specialists state the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the organization is more developed.

Russia’s 1XBet and Slovakia’s DOXXbet have actually both set up in Nigeria in the last 2 years while Italy’s Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET’s Alabi stated its sales were split between stores and online however the ease of electronic payments, expense of running stores and capability for consumers to prevent the preconception of gambling 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 essential to have a shop network, not least due to the fact that lots of clients still stay unwilling to invest online.

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

At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans collected to see Nigeria’s last warm up game before the World Cup.

Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a television screen inside. He said he began gambling 3 months ago 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 Akinyelure in Lagos; editing by David Clarke)