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 companies that are beginning to make online organizations more practical.


For years, mobile payments stopped working to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have fostered a culture of cashless payments.


Fear of electronic scams and sluggish internet speeds have held Nigerian online customers back but sports betting companies states the brand-new, quick digital payment systems underpinning their sites are altering mindsets towards .
bet9ja.com

"We have actually seen significant growth in the variety of payment options that are available. All that is absolutely changing the video gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.
bit.ly

"The operators will go with whoever is faster, whoever can link to their platform with less concerns and problems," he said, adding that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.


That development has actually been matched by an increase 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 jumped 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 mobile phone use and falling information expenses, Nigeria has actually long been seen as a terrific opportunity for online organizations - once consumers feel comfortable with electronic payments.


Online gambling firms state that is happening, though reaching the 10s of countless Nigerians without access to banking services stays an obstacle for pure online merchants.


British online sports betting company 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 progressive shift to online now, that is where the market is going," Betway's Nigeria manager Lere Awokoya said.


"The development in the number of fintechs, and the federal government as an enabler, has helped business to thrive. These technological shifts encouraged Betway to start operating in Nigeria," he said.


FINTECH COMPETITION


sports betting firms cashing in on the soccer craze whipped up by Nigeria's participation in the World Cup state they are discovering the payment systems produced by regional startups such as Paystack are proving popular online.


Paystack and another regional startup Flutterwave, both founded in 2016, are offering competitors for Nigeria's Interswitch which was set up in 2002 and was the main platform used by organizations running in Nigeria.
bit.ly

"We included Paystack as one of our payment alternatives with no fanfare, without announcing to our customers, and within a month it shot up to the primary most secondhand payment alternative on the site," stated Akin Alabi, creator of NairabBET.


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


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


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 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 month," said Emmanuel Quartey, Paystack's head of growth.
bit.ly

He said an environment of developers had emerged around Paystack, developing software application to integrate the platform into sites. "We have seen a growth in that neighborhood and they have actually brought us along," stated Quartey.
bet9ja.com

Paystack said it allows payments for a number of wagering firms but likewise a large range of businesses, from energy services to carry business to insurance provider Axa Mansard.
bet9ja.com

Flutterwave, co-founded by Nigerian entrepreneur 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 in 2015.
bit.ly

FOREIGN INVESTMENT


Shifts in Nigeria's payment culture have actually accompanied the arrival of foreign investors intending to take advantage of sports betting.


Industry specialists state the sector creates 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 led the trend, taking a half stake in market leader Bet9ja when the Nigerian company released in 2015.


NairaBET's Alabi stated its sales were split between stores and online however the ease of electronic payments, cost of running stores and capability for customers to prevent the preconception of gaming in public implied online deals would grow.


But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was essential to have a store network, not least because lots of consumers still remain unwilling to invest online.


He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian sports betting stores often act as social hubs where consumers can watch soccer totally free of charge while putting bets.


At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans gathered to see Nigeria's last heat up 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 sports betting 3 months ago and bets as much as 1,000 naira a day.


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