Online Betting Firms Gamble On Soccer-mad Nigeria

bit.ly
By Alexis Akwagyiram and Didi Akinyelure


LAGOS, June 25 (Reuters) - Online sports betting wagering is flourishing in soccer-mad Nigeria largely thanks to payment systems established by homegrown innovation companies that are starting to make online services more viable.
bet9ja.com

For years, mobile payments failed to remove 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 customers back but sports betting firms states the new, fast digital payment systems underpinning their websites are altering attitudes towards online deals.


"We have seen significant development in the variety of payment solutions that are available. All that is definitely changing the video gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.


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


That growth 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 reserve 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 first quarter of 2018 there were nearly 10 million worth 61 billion.


With a young population of nearly 190 million, increasing mobile phone usage and falling data expenses, Nigeria has long been viewed as a terrific chance for online businesses - once consumers feel comfy with electronic payments.


Online gambling companies state that is happening, though reaching the 10s of millions of Nigerians without access to banking services stays a challenge for pure online retailers.


British online wagering firm Betway opened its first African company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced 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 helped the service to thrive. These technological shifts encouraged Betway to start running in Nigeria," he stated.


FINTECH COMPETITION


sports betting firms capitalizing the soccer craze whipped up by Nigeria's participation worldwide Cup state they are discovering the payment systems developed by local start-ups such as Paystack are proving popular online.


Paystack and another local start-up Flutterwave, both founded in 2016, are providing competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform used by businesses operating in Nigeria.


"We included Paystack as one of our payment options without any excitement, without announcing to our clients, and within a month it shot up to the number one most pre-owned payment choice on the website," said Akin Alabi, creator of NairabBET.


He said NairaBET, the nation's 2nd greatest sports betting company, now had 2 million routine clients on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative given that it was included late 2017.


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


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


Paystack, based in the mad Ikeja district of Lagos, said the variety of regular monthly transactions it processed rose 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," stated Emmanuel Quartey, Paystack's head of development.


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


Paystack said it makes it possible for payments for a variety of sports betting companies but likewise a vast array of organizations, from energy services to transport business to insurance provider Axa Mansard.


Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme along with investor 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 coincided with the arrival of foreign investors wishing to use sports betting wagering.


Industry experts state the sector produces about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the 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 50 percent stake in market leader Bet9ja when the Nigerian firm launched in 2015.


NairaBET's Alabi said its sales were split in between stores and online but the ease of electronic payments, expense of running stores and ability for customers to avoid the stigma of sports betting in public implied online transactions would grow.


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


He said the business, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian wagering stores typically serve as social centers where consumers can enjoy soccer free of charge while placing bets.


At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans to enjoy Nigeria's final heat up game before the World Cup.
bit.ly

Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a television screen inside. He stated he began gambling three months earlier and bets up to 1,000 naira a day.


"Since I have actually been playing I have actually not won anything but 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)