Online Betting Firms Gamble on Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure

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

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

Fear of electronic scams and sluggish web speeds have actually held Nigerian online consumers back but sports betting companies states the brand-new, quick digital payment systems underpinning their websites are changing attitudes towards online deals.

“We have actually seen substantial growth in the variety of payment services that are readily available. All that is definitely changing the video gaming space,” stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria’s industrial capital.

“The operators will go with whoever is quicker, whoever can link to their platform with less concerns and glitches,” he stated, adding that taxes from sports betting wagering in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That development 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 central 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 nearly 190 million, increasing smart phone usage and falling information costs, Nigeria has actually long been viewed as a fantastic chance for online businesses – once consumers feel comfy with electronic payments.

Online sports betting firms say that is taking place, though reaching the tens of millions of Nigerians without access to banking services remains an obstacle for pure online sellers.

British online wagering company 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 progressive shift to online now, that is where the industry is going,” Betway’s Nigeria supervisor Lere Awokoya stated.

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

FINTECH COMPETITION

sports betting companies capitalizing the soccer craze whipped up by Nigeria’s involvement on the planet Cup state they are discovering the payment systems created by local startups such as Paystack are proving popular online.

Paystack and another local startup Flutterwave, both established in 2016, are supplying competitors for Nigeria’s Interswitch which was set up in 2002 and was the main platform used by businesses running in Nigeria.

“We added Paystack as one of our payment options with no fanfare, without revealing to our customers, and within a month it soared to the top most secondhand payment alternative on the website,” stated Akin Alabi, founder of NairabBET.

He stated NairaBET, the country’s 2nd biggest sports betting firm, now had 2 million routine clients on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice considering that it was included late 2017.

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

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

Paystack, based in the mad Ikeja district of Lagos, said the variety of regular 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 single month,” said Emmanuel Quartey, Paystack’s head of growth.

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

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

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program 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 accompanied the arrival of intending to use 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 established.

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

NairaBET’s Alabi stated its sales were divided between shops and online however the ease of electronic payments, cost of running stores and ability for customers to avoid the preconception of gaming in public implied online transactions would grow.

But regardless of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – stated it was important to have a store network, not least due to the fact that lots of customers still remain hesitant 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 hubs where consumers can view soccer totally free of charge while positioning bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans collected to view Nigeria’s final warm up game before the World Cup.

Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a television screen inside. He stated he started sports betting three months earlier and bets approximately 1,000 naira a day.

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