Online Betting Firms Gamble on Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure

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

For many years, mobile payments stopped working to take off 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 fraud and slow web speeds have actually held Nigerian online consumers back however sports betting companies says the brand-new, quick digital payment systems underpinning their websites are changing attitudes towards online transactions.

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

“The operators will opt for whoever is quicker, whoever can connect to their platform with less problems and glitches,” he said, adding that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That development has been matched by an increase in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main bank and licensed banks.

In 2016, there were 14 million web payments worth a total 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 mobile phone use and falling data costs, Nigeria has actually long been viewed as an excellent chance for online services – once customers feel comfortable with electronic payments.

Online sports betting companies say that is occurring, though reaching the tens of countless Nigerians without access to banking services stays an obstacle for pure online sellers.

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

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

“The development in the number of fintechs, and the government as an enabler, has actually assisted business to thrive. These technological shifts encouraged Betway to begin running in Nigeria,” he said.

FINTECH COMPETITION

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

Paystack and another regional startup Flutterwave, both established in 2016, are supplying competitors for Nigeria’s Interswitch which was set up in 2002 and was the primary platform utilized by companies operating in Nigeria.

“We included Paystack as one of our payment choices with no excitement, without announcing to our clients, and within a month it shot up to the primary most secondhand payment option on the website,” stated Akin Alabi, founder of NairabBET.

He stated NairaBET, the country’s 2nd biggest wagering firm, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative considering that it was included in late 2017.

Paystack was established by 2 computer system science 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 frenetic Ikeja district of Lagos, said the number 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,” stated Emmanuel Quartey, Paystack’s head of growth.

He said an environment of developers had actually emerged around Paystack, producing software application to integrate the platform into sites. “We have actually seen a growth in that neighborhood and they have carried us along,” stated Quartey.

Paystack stated it enables payments for a number of sports betting firms however also a vast array of businesses, from utility services to carry companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme along with 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 accompanied the arrival of foreign investors intending to use sports betting.

Industry specialists state the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where business 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 trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm introduced in 2015.

NairaBET’s Alabi said its sales were split in between stores and online however the ease of electronic payments, expense of running stores and capability for consumers to prevent the preconception of gaming in public suggested online transactions would grow.

But despite advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – stated it was very important to have a shop network, not least due to the fact that lots of consumers still stay reluctant to spend online.

He stated the company, with about 60 percent of Nigeria’s sports betting wagering market, had an extensive network. Nigerian wagering stores frequently function as social centers where clients can enjoy soccer totally free of charge while placing bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans gathered to view Nigeria’s final heat up video 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 stated he began gambling 3 months ago and bets up to 1,000 naira a day.

“Since I have been playing I have actually 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)