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Online Betting Firms Gamble on Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) – Online sports betting wagering is booming in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology companies that are beginning to make online companies more practical.

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 promoted a culture of cashless payments.

Fear of electronic fraud and slow internet speeds have actually held Nigerian online customers back but wagering firms says the new, fast digital payment systems underpinning their sites are altering mindsets towards online transactions.

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

“The operators will go with whoever is quicker, whoever can link to their platform with less concerns 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 an overall 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, rising cellphone use and falling data costs, Nigeria has long been seen as a fantastic chance for online businesses – once customers feel comfortable with electronic payments.

Online sports betting companies state that is happening, though reaching the tens of countless 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 released in Nigeria in January.

“There is a progressive 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 assisted business to grow. These technological shifts motivated Betway to begin running in Nigeria,” he stated.

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy worked up by Nigeria’s participation on the planet Cup state they are discovering the payment systems produced by local startups such as Paystack are proving popular online.

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

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

He said NairaBET, the nation’s 2nd greatest wagering firm, now had 2 million regular clients on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice considering that it was added in late 2017.

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

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 month-to-month 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 month,” said Emmanuel Quartey, Paystack’s head of growth.

He stated a community of developers had actually emerged around Paystack, creating software application to the platform into websites. “We have actually seen a development because neighborhood and they have carried us along,” stated Quartey.

Paystack stated it makes it possible for payments for a number of sports betting firms however also a vast array of services, from energy 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 along with investor 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 coincided with the arrival of foreign investors wanting to tap into sports betting.

Industry professionals 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 developed.

Russia’s 1XBet and Slovakia’s DOXXbet have actually both established 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 between shops and online however the ease of electronic payments, cost of running stores and ability for clients to prevent the stigma of gaming in public indicated online deals would grow.

But in spite of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – stated it was essential to have a shop network, not least since many 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 stores frequently function as social centers where clients can view 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 watch Nigeria’s final heat up video game before the World Cup.

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

“Since I have been playing I have not won anything but 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)