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 innovation companies that are starting to make online companies more viable.

For years, mobile payments failed to take off 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 sluggish web speeds have actually held Nigerian online consumers back however wagering firms says the new, fast digital payment systems underpinning their sites are changing attitudes towards online deals.

« We have actually seen significant growth in the variety of payment solutions that are available. All that is certainly changing the gaming area, » said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria’s business capital.

« The operators will go with whoever is faster, whoever can link to their platform with less issues and glitches, » he stated, including that taxes from sports betting wagering in Lagos State rose 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 an overall 132 billion naira ($420 million). Transactions jumped 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 usage and falling data costs, Nigeria has long been viewed as a fantastic opportunity for online organizations – once consumers feel comfortable with electronic payments.

Online gambling firms state that is happening, though reaching the tens of countless Nigerians without access to banking services stays a challenge for pure online merchants.

British online sports betting firm Betway 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 market is going, » Betway’s Nigeria supervisor Lere Awokoya stated.

« The growth in the variety of fintechs, and the government as an enabler, has actually assisted business to prosper. These technological shifts encouraged Betway to begin running in Nigeria, » he stated.

FINTECH COMPETITION

sports betting companies cashing in on the soccer frenzy worked up by Nigeria’s involvement on the planet Cup state they are discovering the payment systems developed by regional startups such as Paystack are showing popular online.

Paystack and another regional startup Flutterwave, both founded in 2016, are supplying competitors for Nigeria’s Interswitch which was established in 2002 and was the main platform utilized by organizations running in Nigeria.

« We included Paystack as one of our payment choices without any fanfare, without revealing to our clients, and within a month it shot up to the top most pre-owned payment choice on the site, » said Akin Alabi, creator of NairabBET.

He said NairaBET, the nation’s second biggest sports betting company, now had 2 million regular clients on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative considering that it was included in late 2017.

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

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

Paystack, based in the frenetic Ikeja district of Lagos, stated the variety of regular monthly deals 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 said an ecosystem of developers had emerged around Paystack, developing software application to incorporate the platform into sites. « We have seen a development in that community and they have actually carried us along, » stated Quartey.

Paystack stated it makes it possible for payments for a variety of wagering companies but also a large range of services, from utility services to transport business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also 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 last year.

FOREIGN INVESTMENT

Shifts in Nigeria’s payment culture have coincided with the arrival of foreign financiers hoping to take advantage of sports betting.

Industry professionals say the sector creates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the business is more developed.

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

NairaBET’s Alabi stated its sales were divided in between stores and online however the ease of electronic payments, expense of running shops and capability for customers to avoid the preconception of gambling in public indicated online deals would grow.

But in spite of advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – said it was very important to have a shop network, not least due to the fact that many clients still stay hesitant to invest online.

He said the business, with about 60 percent of Nigeria’s sports betting market, had a substantial network. Nigerian sports betting stores often serve as social centers where consumers can enjoy soccer complimentary of charge while positioning bets.

At a hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans collected to enjoy Nigeria’s final warm up video 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 stated he began sports betting three months ago and bets as much as 1,000 naira a day.

« Since I have been playing I have actually not won anything however I believe 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)