Online Betting Firms Gamble on Soccer-mad Nigeria
By Alexis Akwagyiram and Didi Akinyelure
LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown technology companies that are beginning to make online organizations more practical.
For years, mobile payments failed to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have promoted a culture of cashless payments.
Fear of electronic fraud and slow web speeds have held Nigerian online customers back but wagering firms states the new, fast digital payment systems underpinning their websites are altering attitudes towards online deals.
"We have seen considerable growth in the variety of payment solutions that are available. All that is certainly altering the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.
"The operators will choose whoever is much faster, whoever can connect to their platform with less issues and problems," he stated, including that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.
That development has 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 a total 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 smart phone use and falling information costs, Nigeria has long been seen as a great chance for online services - once customers feel comfy with electronic payments.
Online sports betting firms say that is occurring, though reaching the 10s of countless Nigerians without access to banking services remains a difficulty for pure online sellers.
British online wagering company Betway opened its first African company 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 industry is going," Betway's Nigeria supervisor Lere Awokoya stated.
"The growth in the number of fintechs, and the government as an enabler, has actually helped business to flourish. These technological shifts motivated Betway to start running in Nigeria," he stated.
FINTECH COMPETITION
sports betting firms cashing in on the soccer frenzy worked up by Nigeria's participation worldwide Cup say they are finding the payment systems developed by regional start-ups such as Paystack are proving popular online.
Paystack and another regional startup Flutterwave, both established in 2016, are offering competition for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by businesses operating in Nigeria.
"We added Paystack as one of our payment alternatives with no excitement, without revealing to our consumers, and within a month it soared to the top most used payment choice on the website," stated Akin Alabi, founder of NairabBET.
He stated NairaBET, the nation's second most significant sports betting firm, now had 2 million routine customers 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 set up by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage financing in Silicon Valley's Y-Combinator program.
bit.ly
In December 2016, it raised $1.3 million from China's Tencent and Comcast Ventures in the United States.
Paystack, based in the frenetic Ikeja district of Lagos, stated the variety of 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 development.
He stated an environment of developers had actually emerged around Paystack, producing software to integrate the platform into websites. "We have actually seen a growth because community and they have actually brought us along," said Quartey.
Paystack said it allows payments for a number of sports betting companies however likewise a wide range of organizations, from utility services to carry business to insurance company Axa Mansard.
Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to 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 accompanied the arrival of foreign investors wishing to tap into sports betting.
Industry specialists 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 both set up 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 company introduced in 2015.
bet9ja.com
NairaBET's Alabi said its sales were split in between stores and online however the ease of electronic payments, cost of running stores and ability for clients to prevent the stigma of gaming in public meant online deals would grow.
But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was important to have a shop network, not least since numerous customers still remain hesitant to spend online.
bit.ly
He stated the business, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian wagering shops typically function as social centers where clients can watch soccer complimentary of charge while putting bets.
At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans collected to watch Nigeria's final warm up game before the World Cup.
Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a TV screen inside. He stated he started gambling 3 months back and bets approximately 1,000 naira a day.
"Since I have been playing I have actually not won anything however I believe that a person day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)