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 mostly thanks to payment systems established by homegrown innovation firms that are beginning to make online businesses more practical.

For many years, mobile payments failed to remove in Nigeria as they have in countries such as Kenya, where Safaricom’s M-Pesa cash transfers have promoted a culture of cashless payments.

Fear of electronic scams and slow web speeds have actually held Nigerian online consumers back however wagering companies states the new, quick digital payment systems underpinning their sites are altering attitudes towards online transactions.

“We have seen considerable growth in the variety of payment options 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 choose whoever is much faster, whoever can link to their platform with less problems and glitches,” he stated, including that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That growth has actually been matched by a rise 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 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 data expenses, Nigeria has long been seen as an excellent opportunity for online organizations – once customers feel comfortable with electronic payments.

Online gaming companies say that is taking place, though reaching the 10s of countless Nigerians without access to banking services remains a difficulty for pure online sellers.

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

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

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

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy whipped up by Nigeria’s involvement on the planet Cup say they are discovering the payment systems created by regional startups such as Paystack are showing popular online.

Paystack and another local startup Flutterwave, both established 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 included Paystack as one of our payment alternatives with no fanfare, without revealing to our customers, and within a month it soared to the primary most pre-owned payment choice on the website,” said Akin Alabi, founder of NairabBET.

He stated NairaBET, the country’s 2nd most significant sports betting firm, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment choice given that it was added in late 2017.

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

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 mad Ikeja district of Lagos, stated the variety of regular monthly deals 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 each and every single month,” said Emmanuel Quartey, Paystack’s head of growth.

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

Paystack said it enables payments for a variety of wagering firms however also a broad variety of companies, from energy services to transport business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program along with 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 coincided with the arrival of foreign financiers hoping to take advantage of sports betting wagering.

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

Russia’s 1XBet and Slovakia’s DOXXbet have actually both established in Nigeria in the last 2 years while Italy’s Goldbet was ahead of the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET’s Alabi stated its sales were divided between stores and online however the ease of electronic payments, expense of running shops and for clients to prevent the preconception of gaming in public suggested online deals would grow.

But regardless of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – said it was very important to have a shop network, not least since numerous customers still remain reluctant to invest online.

He stated the company, with about 60 percent of Nigeria’s sports betting wagering market, had a substantial network. Nigerian wagering stores often serve as social hubs where clients can see soccer complimentary of charge while positioning bets.

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

Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a TV screen inside. He said he began sports betting 3 months earlier and bets approximately 1,000 naira a day.

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