Online Betting Firms Gamble on Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) – Online sports betting wagering is growing in soccer-mad Nigeria mainly thanks to payment systems established by homegrown innovation companies that are beginning to make online businesses more feasible.

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 cultivated a culture of cashless payments.

Fear of electronic scams and slow internet speeds have actually held Nigerian online customers back however sports betting companies states the brand-new, fast digital payment systems underpinning their websites are changing mindsets towards online transactions.

“We have seen considerable growth in the number of payment options that are offered. All that is absolutely altering the video gaming area,” said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria’s commercial capital.

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

That development has actually been matched by a rise in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve 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 nearly 190 million, increasing cellphone use and falling data costs, Nigeria has actually long been viewed as a great opportunity for online services – once customers feel comfy with electronic payments.

Online gambling companies say that is taking place, though reaching the tens of millions of Nigerians without access to remains a challenge for pure online retailers.

British online wagering firm Betway opened its first African business 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 industry is going,” Betway’s Nigeria supervisor Lere Awokoya said.

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

FINTECH COMPETITION

sports betting firms cashing in on the soccer craze whipped up by Nigeria’s involvement worldwide Cup state they are discovering the payment systems developed by local start-ups such as Paystack are proving popular online.

Paystack and another regional start-up Flutterwave, both established in 2016, are providing competition for Nigeria’s Interswitch which was established in 2002 and was the main platform utilized by companies running in Nigeria.

“We added Paystack as one of our payment options with no excitement, without revealing to our customers, and within a month it soared to the primary most used payment option on the site,” stated Akin Alabi, creator of NairabBET.

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

Paystack was set up by two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early stage funding 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 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 growth.

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

Paystack stated it allows payments for a variety of wagering firms however likewise a vast array of organizations, from utility services to carry companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme in addition to endeavor capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million last year.

FOREIGN INVESTMENT

Shifts in Nigeria’s payment culture have actually accompanied the arrival of foreign investors intending to tap into sports betting.

Industry experts say the sector produces about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the organization is more established.

Russia’s 1XBet and Slovakia’s DOXXbet have both established 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 said its sales were divided in between stores and online but the ease of electronic payments, expense of running stores and capability for consumers to prevent the preconception of gambling in public meant online deals would grow.

But regardless of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – stated it was necessary to have a store network, not least due to the fact that numerous clients still stay reluctant to invest online.

He stated the business, with about 60 percent of Nigeria’s sports betting market, had a substantial network. Nigerian sports betting stores often serve as social centers where customers can watch soccer free of charge while positioning bets.

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

Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a television screen inside. He stated he began gambling three months earlier and bets as much as 1,000 naira a day.

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