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 largely thanks to payment systems established by homegrown innovation companies that are starting to make online organizations more practical.

For years, mobile payments failed to take off in Nigeria as they have in countries such as Kenya, where Safaricom’s M-Pesa money transfers have actually fostered a culture of cashless payments.

Fear of electronic fraud and slow web speeds have actually held Nigerian online consumers back but wagering firms states the new, quick digital payment systems underpinning their websites are changing attitudes towards online deals.

“We have seen considerable development in the number of payment solutions that are offered. All that is absolutely changing the gaming space,” stated 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 connect to their platform with less issues and problems,” he said, including that taxes from sports betting in Lagos State increased 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 main bank and certified 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 almost 190 million, rising mobile phone use and falling information costs, Nigeria has actually long been viewed as a great opportunity for online companies – once customers feel comfortable with electronic payments.

Online gambling firms say that is taking place, though reaching the 10s of countless Nigerians without access to banking services stays a challenge for pure online retailers.

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

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

“The development in the variety of fintechs, and the government as an enabler, has actually helped business to thrive. These technological shifts motivated Betway to start running in Nigeria,” he stated.

FINTECH COMPETITION

sports betting firms cashing in on the soccer craze worked up by Nigeria’s involvement on the planet Cup state they are finding the payment systems created by local startups such as Paystack are proving popular online.

Paystack and another regional start-up Flutterwave, both founded in 2016, are providing competitors for Nigeria’s Interswitch which was set up in 2002 and was the main platform utilized by organizations operating in Nigeria.

“We added Paystack as one of our payment alternatives without any fanfare, without announcing to our clients, and within a month it shot up to the top most used payment choice on the site,” said Akin Alabi, creator of NairabBET.

He stated NairaBET, the country’s 2nd most significant wagering firm, now had 2 million routine consumers on its website, 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 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage funding in Silicon Valley’s Y-Combinator program.

In December 2016, it raised $1.3 million from investors 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 deals it processed increased 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 growth.

He said an environment of designers had emerged around Paystack, producing software application to incorporate the platform into sites. “We have actually seen a development because community and they have actually carried us along,” said Quartey.

Paystack stated it allows payments for a number of but likewise a wide range of companies, from energy services to transport companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to 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 actually corresponded with the arrival of foreign financiers hoping to take advantage of sports betting wagering.

Industry professionals say the sector creates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where business is more established.

Russia’s 1XBet and Slovakia’s DOXXbet have actually both set up in Nigeria in the last two years while Italy’s Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET’s Alabi said its sales were divided between stores and online however the ease of electronic payments, cost of running shops and ability for customers to prevent the stigma of gaming in public indicated online deals would grow.

But regardless of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – stated it was important to have a shop network, not least since lots of clients still remain hesitant to spend online.

He stated the business, with about 60 percent of Nigeria’s sports betting wagering market, had an extensive network. Nigerian wagering shops often function as social centers where consumers 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 collected to enjoy Nigeria’s last 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 sports betting three months earlier and bets approximately 1,000 naira a day.

“Since I have been playing I have actually 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)