Online Betting Firms Gamble on Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) – Online sports betting wagering is booming in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown technology companies that are beginning to make online businesses more feasible.

For 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 cultivated a culture of cashless payments.

Fear of electronic fraud and sluggish web speeds have actually held Nigerian online consumers back but wagering firms says the brand-new, quick digital payment systems underpinning their websites are changing mindsets towards online transactions.

“We have seen significant development in the number of payment options that are offered. All that is certainly altering the gaming area,” stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria’s industrial capital.

“The operators will opt for whoever is quicker, whoever can connect to their platform with less problems and problems,” he said, adding 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 central 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 first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of almost 190 million, rising smart phone use and falling information costs, Nigeria has actually long been seen as an excellent chance for online companies – once customers feel comfy with electronic payments.

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

British online sports betting firm Betway opened its first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.

“There is a steady shift to online now, that is where the industry is going,” Betway’s Nigeria manager Lere Awokoya said.

“The growth in the number of fintechs, and the government as an enabler, has actually helped the company to flourish. These technological shifts motivated Betway to start operating in Nigeria,” he said.

FINTECH COMPETITION

sports betting firms cashing in on the soccer craze worked up by Nigeria’s participation worldwide Cup say 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 offering competitors for Nigeria’s Interswitch which was established in 2002 and was the primary platform used by organizations operating in Nigeria.

“We added Paystack as one of our payment options with no excitement, without announcing to our consumers, and within a month it soared to the number one most used payment alternative on the site,” stated Akin Alabi, creator of NairabBET.

He said NairaBET, the country’s second greatest wagering firm, now had 2 million routine consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice considering that it was included in late 2017.

Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase funding 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, stated the number 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 every single month,” stated Emmanuel Quartey, Paystack’s head of growth.

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

Paystack stated it allows payments for a number of sports betting firms but likewise a vast array of companies, from energy services to transport business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme in addition to endeavor 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 investors wishing to use sports betting.

Industry experts state the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the company is more established.

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

NairaBET’s Alabi stated its sales were divided between stores and online but the ease of electronic payments, expense of running shops and ability for clients to prevent the preconception of sports betting in public suggested online transactions would grow.

But regardless of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – said it was essential to have a store network, not least because numerous customers still stay hesitant to invest online.

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

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, dozens of soccer fans collected to see heat up game before the World Cup.

Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a television screen inside. He said he started gambling three 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,” stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)