Online Betting Firms Gamble on Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure

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

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

Fear of electronic scams and slow internet speeds have actually held Nigerian online consumers back but sports betting companies says the new, quick digital payment systems underpinning their sites are altering mindsets towards online transactions.

« We have actually seen considerable growth in the variety of payment solutions that are readily available. All that is certainly changing the video gaming area, » stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria’s business capital.

« The operators will opt for whoever is faster, whoever can link to their platform with less issues and glitches, » he said, including that taxes from sports betting in Lagos State rose 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 reserve 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 very first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of almost 190 million, increasing mobile phone use and falling information costs, Nigeria has long been seen as a terrific chance for online organizations – once consumers feel comfy with electronic payments.

Online gaming firms say that is taking place, though reaching the tens of millions of Nigerians without access to banking services remains a challenge for pure online retailers.

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

« There is a progressive shift to online now, that is where the market is going, » Betway’s Nigeria supervisor Lere Awokoya stated.

« The growth in the number of fintechs, and the government as an enabler, has actually assisted business to flourish. These technological shifts encouraged Betway to begin operating in Nigeria, » he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy whipped up by Nigeria’s involvement in the World Cup state they are finding the payment systems by regional startups such as Paystack are showing popular online.

Paystack and another regional startup Flutterwave, both established in 2016, are offering competitors for Nigeria’s Interswitch which was established in 2002 and was the primary platform used by services operating in Nigeria.

« We added Paystack as one of our payment choices with no fanfare, without revealing to our customers, and within a month it soared to the top most pre-owned payment alternative on the website, » said Akin Alabi, creator of NairabBET.

He said NairaBET, the country’s 2nd most significant sports betting firm, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment option considering that it was included late 2017.

Paystack was established by two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who received early phase financing in Silicon Valley’s Y-Combinator programme.

In December 2016, it raised $1.3 million from investors consisting of China’s Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, said the number of monthly transactions 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 month, » said Emmanuel Quartey, Paystack’s head of development.

He stated a community of developers had emerged around Paystack, creating software to integrate the platform into sites. « We have actually seen a growth because neighborhood and they have carried us along, » stated Quartey.

Paystack said it enables payments for a variety of sports betting firms but likewise a large range of organizations, from utility services to carry business to insurance provider 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 last year.

FOREIGN INVESTMENT

Shifts in Nigeria’s payment culture have actually accompanied the arrival of foreign financiers intending to take advantage of sports betting wagering.

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

Russia’s 1XBet and Slovakia’s DOXXbet have both set up in Nigeria in the last 2 years while Italy’s Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET’s Alabi said its sales were divided in between stores and online however the ease of electronic payments, expense of running stores and capability for clients to prevent the stigma of gambling in public meant online transactions 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 store network, not least because numerous customers still remain hesitant to invest online.

He said 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 watch soccer totally free of charge while placing bets.

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

Richard Onuka, a factory worker who earns 25,000 naira a month, was focused on a TV screen inside. He stated he began sports betting three months ago and bets up to 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, » stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)