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

For many years, mobile payments stopped working to remove in Nigeria as they have in nations such as Kenya, where Safaricom’s M-Pesa money transfers have fostered a culture of cashless payments.

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

“We have seen significant development in the number of payment services that are available. All that is certainly altering the 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 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 reserve 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 almost 190 million, rising smart phone usage and falling data expenses, Nigeria has long been seen as a fantastic opportunity for online businesses – once consumers feel comfortable with electronic payments.

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

British online sports betting company Betway opened its first African company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced 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 said.

“The growth in the variety of fintechs, and the government as an enabler, has assisted business to prosper. These technological shifts motivated Betway to begin running in Nigeria,” he stated.

FINTECH COMPETITION

sports betting firms capitalizing the soccer craze whipped up by Nigeria’s involvement worldwide Cup state they are finding the payment systems created by local startups such as Paystack are showing popular online.

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

“We added Paystack as one of our payment choices without any fanfare, without revealing to our customers, and within a month it soared to the number one most secondhand payment alternative on the site,” said Akin Alabi, creator of NairabBET.

He said NairaBET, the country’s 2nd biggest wagering company, now had 2 million routine clients on its website, up from 500,000 in 2013, and Paystack remained the most popular payment option given that it was included in late 2017.

Paystack was established by two Nigerian computer science 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 investors consisting of China’s Tencent and Comcast Ventures in the United States.

Paystack, based in the mad Ikeja district of Lagos, stated the variety of month-to-month transactions it processed increased 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 each and every single month,” stated Emmanuel Quartey, Paystack’s head of growth.

He said an ecosystem of designers had actually emerged around Paystack, developing software to integrate the platform into websites. “We have actually seen a growth because neighborhood and they have actually carried us along,” said Quartey.

Paystack stated it allows payments for a variety of sports betting firms but likewise a wide range of services, from utility services to carry business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to venture 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 actually accompanied the arrival of foreign financiers wishing to tap into sports betting.

Industry professionals say the sector produces 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 two years while Italy’s Goldbet was ahead of the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET’s Alabi said its sales were divided in between shops and online however the ease of electronic payments, cost of running shops and capability 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 essential to have a shop network, not least due to the fact that lots of clients still stay reluctant to invest online.

He said the business, with about 60 percent of Nigeria’s sports betting wagering market, had an extensive network. Nigerian wagering stores frequently act as social centers where clients can enjoy soccer complimentary of charge while putting bets.

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

Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a TV screen inside. He stated he started gambling three months back and bets up to 1,000 naira a day.

“Since I have actually been playing I have actually not won anything but I think 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)