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Online Betting Firms Gamble on Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) – Online sports betting is expanding in soccer-mad Nigeria largely thanks to payment systems established by homegrown technology firms that are beginning to make online services more practical.

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

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

“We have seen substantial development in the variety of payment solutions that are available. All that is certainly altering the gaming space,” said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria’s business capital.

“The operators will choose whoever is faster, whoever can link to their platform with less problems 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 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 certified banks.

In 2016, there were 14 million web payments worth an overall 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 nearly 190 million, increasing mobile phone use and falling data costs, Nigeria has actually long been viewed as a great chance for online services – once customers feel comfy with electronic payments.

Online gambling firms state that is occurring, though reaching the tens of millions of Nigerians without access to banking services remains an obstacle for pure online sellers.

British online sports betting 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 gradual shift to online now, that is where the industry is going,” Betway’s Nigeria manager Lere Awokoya said.

“The development in the number of fintechs, and the government as an enabler, has helped the company to prosper. These technological shifts motivated Betway to begin running in Nigeria,” he said.

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy worked up by Nigeria’s involvement on the planet Cup state they are finding the payment systems created by regional startups such as Paystack are showing popular online.

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

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

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

Paystack was established by 2 Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who received early stage funding 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 month-to-month 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 every month,” stated Emmanuel Quartey, Paystack’s head of growth.

He said a community of designers had emerged around Paystack, creating software application to integrate the platform into sites. “We have seen a growth in that community and they have actually brought us along,” stated Quartey.

Paystack stated it allows payments for a variety of wagering companies however also a large range of businesses, from energy services to carry business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme as well as endeavor capitalists 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 actually accompanied the arrival of foreign financiers intending to take advantage of sports betting.

Industry experts say the sector generates 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 both set up in Nigeria in the last 2 years while Italy’s Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET’s Alabi said its sales were split between stores and online however the ease of electronic payments, expense of running stores and capability for customers to prevent the stigma of gambling in public indicated online transactions would grow.

But in spite 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 numerous consumers still stay unwilling to invest online.

He stated the company, with about 60 percent of Nigeria’s sports betting wagering market, had an extensive network. Nigerian sports betting stores typically act as social centers where customers can watch soccer totally free of charge while positioning bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans gathered to watch Nigeria’s last heat up 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 said he started sports betting 3 months back and bets as much as 1,000 naira a day.

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