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 mainly thanks to payment systems developed by homegrown innovation firms that are starting to make online services more viable.

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

Fear of electronic scams and sluggish internet speeds have actually held Nigerian online customers back but sports betting firms states the brand-new, fast digital payment systems underpinning their sites are altering mindsets towards online deals.

“We have seen significant development in the number of payment solutions that are readily available. All that is definitely changing the gaming area,” 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 connect to their platform with less concerns and glitches,” he stated, including that taxes from sports betting wagering 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 data 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 very first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of nearly 190 million, increasing smart phone use and falling data expenses, Nigeria has long been seen as a terrific chance for online businesses – once consumers feel comfy with electronic payments.

Online gambling companies say that is taking place, though reaching the tens of countless Nigerians without access to banking services stays a challenge for pure online merchants.

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

“There is a progressive shift to online now, that is where the market is going,” Betway’s Nigeria manager Lere Awokoya stated.

“The development in the variety of fintechs, and the federal government as an enabler, has helped the company to flourish. These technological shifts encouraged Betway to start operating in Nigeria,” he stated.

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy whipped up by Nigeria’s involvement on the planet Cup state they are discovering the payment systems produced by regional start-ups such as Paystack are showing popular online.

Paystack and another regional startup Flutterwave, both established in 2016, are offering competition for Nigeria’s Interswitch which was established in 2002 and was the main platform utilized by services running in Nigeria.

“We added Paystack as one of our payment alternatives without any excitement, without revealing to our customers, and within a month it shot up to the primary most secondhand payment choice on the site,” said Akin Alabi, creator of NairabBET.

He stated NairaBET, the country’s second biggest sports betting firm, now had 2 million regular customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative given that it was included late 2017.

Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase financing in Silicon Valley’s Y-Combinator programme.

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 frenetic Ikeja district of Lagos, stated the variety of monthly transactions 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 each and every single month,” stated Emmanuel Quartey, Paystack’s head of development.

He said a community of designers had actually emerged around Paystack, developing software application to incorporate the platform into websites. “We have seen a development because community and they have brought us along,” said Quartey.

Paystack stated it allows payments for a variety of sports betting companies however also a large range of organizations, from utility services to transfer to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program along with 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 corresponded with the arrival of foreign investors wishing to tap into sports betting.

Industry experts state 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 was ahead of the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET’s Alabi said its sales were split between stores and online however the ease of electronic payments, cost of running stores and ability for customers to avoid the preconception of sports betting in public indicated 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 shop network, not least due to the fact that numerous customers still remain unwilling to spend online.

He said the company, with about 60 percent of Nigeria’s sports betting market, had an extensive network. Nigerian wagering shops typically function as social centers where clients can enjoy soccer totally free of charge while placing bets.

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

Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a television screen inside. He stated he began gambling three months back and bets approximately 1,000 naira a day.

“Since I have actually 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)