Online Betting Firms Gamble On Soccer-mad Nigeria

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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is growing in soccer-mad Nigeria mainly thanks to payment systems established by homegrown technology firms that are beginning to make online businesses more viable.
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For several years, mobile payments stopped working to take off in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have cultivated a culture of cashless payments.


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


"We have seen significant growth in the number of payment options that are offered. All that is certainly changing the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.


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


That development has actually been matched by a rise in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main 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, rising cellphone use and falling data costs, Nigeria has long been seen as a fantastic chance for online businesses - once customers feel comfy with electronic payments.


Online sports betting firms say that is taking place, though reaching the 10s of countless Nigerians without access to banking services remains a challenge for pure online retailers.


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


"There is a gradual shift to online now, that is where the industry is going," Betway's Nigeria manager Lere Awokoya said.


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


FINTECH COMPETITION


sports betting firms cashing in on the soccer frenzy worked up by Nigeria's participation on the planet Cup say they are finding the payment systems produced by local start-ups such as Paystack are proving popular online.


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


"We added Paystack as one of our payment choices with no excitement, without revealing to our customers, and within a month it soared to the top most used payment alternative on the website," stated Akin Alabi, founder of NairabBET.


He said NairaBET, the nation's second most significant wagering company, now had 2 million routine customers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment option considering that it was included in late 2017.


Paystack was established by two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early phase funding 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 frenetic Ikeja district of Lagos, stated the number of month-to-month transactions 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 development.


He said a community of developers had actually emerged around Paystack, producing software to integrate the platform into websites. "We have actually seen a growth because neighborhood and they have carried us along," said Quartey.


Paystack said it enables payments for a number of sports betting companies but also a vast array of services, from utility services to carry business to insurance provider Axa Mansard.


Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to venture 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 coincided with the arrival of foreign financiers intending to take advantage of sports betting.


Industry specialists state the sector produces about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the company is more established.


Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last 2 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 said its sales were divided in between stores and online but the ease of electronic payments, cost of running stores and ability for clients to prevent the preconception of sports betting in public indicated online deals would grow.


But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was essential to have a shop network, not least because numerous clients still stay hesitant to spend online.


He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian wagering shops often function as social centers where customers can view soccer complimentary of charge while placing bets.


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


Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a TV screen inside. He said he started gambling 3 months back and bets up to 1,000 naira a day.


"Since I have 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; editing by David Clarke)