Online Betting Firms Gamble on Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure

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

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 promoted a culture of cashless payments.

Fear of electronic fraud and sluggish internet speeds have actually held Nigerian online consumers back however wagering companies states the new, fast digital payment systems underpinning their sites are altering mindsets towards online transactions.

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

“The operators will go with whoever is faster, whoever can link to their platform with less concerns and glitches,” he said, 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 main bank and licensed 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 nearly 10 million worth 61 billion.

With a young population of almost 190 million, increasing smart phone use and falling information expenses, Nigeria has long been seen as a fantastic opportunity for online businesses – once customers feel comfy with electronic payments.

Online sports betting companies state that is taking place, though reaching the tens of countless Nigerians without access to banking services remains a challenge for pure online sellers.

British online wagering company Betway opened its very first African organization 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 manager Lere Awokoya stated.

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

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy whipped up by Nigeria’s participation on the planet Cup say they are discovering the payment systems produced by regional startups such as Paystack are proving popular online.

Paystack and another regional start-up Flutterwave, both established in 2016, are offering competitors for Nigeria’s Interswitch which was established in 2002 and was the primary platform used by companies running in Nigeria.

“We included Paystack as one of our payment options with no excitement, without announcing to our customers, and within a month it shot up to the top most used payment alternative on the site,” stated Akin Alabi, creator of NairabBET.

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

Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage financing in Silicon Valley’s Y-Combinator program.

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 monthly 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 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 sites. “We have seen a development because neighborhood and they have actually brought us along,” said Quartey.

Paystack stated it allows payments for a variety of wagering companies however likewise a wide variety of services, from utility services to carry business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program along with 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 coincided with the arrival of foreign financiers wishing to use sports betting.

Industry experts state the sector creates 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 two years while Italy’s Goldbet led the trend, taking a half stake in market leader Bet9ja when the Nigerian company launched 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 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 – said it was important to have a shop network, not least since lots of consumers still stay reluctant to invest online.

He stated the company, with about 60 percent of Nigeria’s sports betting market, had a . Nigerian sports betting shops frequently serve as social centers where consumers can watch 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 video game before the World Cup.

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

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