Online Betting Firms Gamble On Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure


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


For many years, mobile payments failed 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 however wagering firms states the brand-new, fast digital payment systems underpinning their websites are changing attitudes towards online deals.


"We have actually seen significant development in the number of payment services that are readily available. All that is certainly changing the video gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial .
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"The operators will go with whoever is much faster, whoever can connect to their platform with less problems and glitches," he stated, adding that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.
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That growth has been matched by a rise in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve 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 very first quarter of 2018 there were nearly 10 million worth 61 billion.


With a young population of almost 190 million, increasing cellphone use and falling information expenses, Nigeria has long been viewed as a great chance for online organizations - once consumers feel comfortable with electronic payments.


Online gambling firms state that is taking place, though reaching the 10s of millions of Nigerians without access to banking services remains a difficulty for pure online retailers.


British online sports betting firm 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 development in the variety of fintechs, and the government as an enabler, has actually assisted the service to grow. These technological shifts motivated Betway to start running in Nigeria," he stated.
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FINTECH COMPETITION


sports betting companies capitalizing the soccer craze worked up by Nigeria's involvement in the World Cup state they are finding the payment systems produced by regional startups such as Paystack are proving popular online.


Paystack and another local start-up Flutterwave, both established in 2016, are offering competition for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by services operating in Nigeria.


"We included Paystack as one of our payment alternatives with no excitement, without revealing to our clients, and within a month it soared to the number one most secondhand payment choice on the website," stated Akin Alabi, creator of NairabBET.


He said NairaBET, the country's 2nd biggest sports betting firm, now had 2 million routine customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment choice given that it was included in late 2017.


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


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


Paystack, based in the frenetic Ikeja district of Lagos, stated the number of regular 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 every month," stated Emmanuel Quartey, Paystack's head of growth.
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He said an ecosystem of developers had actually emerged around Paystack, producing software application to integrate the platform into sites. "We have seen a growth because neighborhood and they have actually carried us along," said Quartey.


Paystack said it makes it possible for payments for a number of sports betting firms but also a wide variety of services, from energy services to carry companies to insurance provider Axa Mansard.


Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme in addition to 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 corresponded with the arrival of foreign financiers intending to use sports betting wagering.


Industry experts say the sector produces about $1 billion a year and is most 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 50 percent stake in market leader Bet9ja when the Nigerian firm released in 2015.


NairaBET's Alabi stated its sales were divided in between stores and online but the ease of electronic payments, expense of running stores and ability for consumers to avoid the preconception of gambling in public indicated online deals would grow.


But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was very important to have a shop network, not least since numerous clients still remain unwilling to invest online.


He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian wagering shops frequently function as social hubs where customers can view soccer complimentary of charge while placing bets.
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At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans collected to view Nigeria's last warm up game before the World Cup.


Richard Onuka, a factory worker who earns 25,000 naira a month, was focused on a television screen inside. He said he started sports betting 3 months earlier and bets up to 1,000 naira a day.


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