Online Betting Firms Gamble On Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure


LAGOS, June 25 (Reuters) - Online sports betting wagering is flourishing in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown innovation firms that are starting to make online businesses more feasible.


For years, mobile payments failed to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have actually promoted a culture of cashless payments.


Fear of electronic scams and sluggish internet speeds have held Nigerian online consumers back but wagering firms says the brand-new, fast digital payment systems underpinning their sites are changing attitudes towards online deals.


"We have actually seen considerable development in the variety of payment services that are readily available. All that is certainly altering the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.


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


That growth has actually been matched by an increase in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central bank and certified banks.
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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 of 2018 there were almost 10 million worth 61 billion.


With a young population of almost 190 million, rising smart phone usage and falling information costs, Nigeria has long been seen as a terrific chance for online services - once customers feel comfortable with electronic payments.


Online gaming firms state that is taking place, though reaching the tens of millions of Nigerians without access to banking services stays an obstacle for pure online sellers.


British online wagering firm Betway opened its very first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched 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 stated.


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


FINTECH COMPETITION


sports betting companies capitalizing the soccer craze worked up by Nigeria's participation worldwide Cup state they are discovering the payment systems developed by regional start-ups such as Paystack are showing popular online.


Paystack and another local start-up Flutterwave, both established in 2016, are providing competitors for Nigeria's Interswitch which was set up in 2002 and was the main platform utilized by organizations operating in Nigeria.


"We included Paystack as one of our payment options without any fanfare, without announcing to our consumers, and within a month it shot up to the number one most secondhand payment choice on the site," stated Akin Alabi, founder of NairabBET.


He stated NairaBET, the nation's second greatest sports betting company, now had 2 million regular clients on its website, up from 500,000 in 2013, and Paystack remained the most popular payment alternative because it was included late 2017.


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


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 deals 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 development.
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He stated an environment of developers had actually emerged around Paystack, developing software to incorporate the platform into websites. "We have seen a growth in that community and they have brought us along," stated Quartey.


Paystack stated it enables payments for a variety of wagering firms however likewise a vast array of organizations, from energy services to carry business to insurance provider Axa Mansard.


Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme as well as 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 actually accompanied the arrival of foreign financiers intending to use sports betting.
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Industry experts say the sector produces about $1 billion a year and is likely to grow faster than in South Africa and Kenya where business is more developed.


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 firm introduced in 2015.


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


But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was essential to have a shop network, not least because many customers still remain reluctant to spend online.


He stated the company, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian sports betting shops frequently function as social hubs where clients can enjoy soccer totally free of charge while positioning bets.


At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans gathered to watch Nigeria's last warm up video game before the World Cup.


Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a TV screen inside. He said he began gambling 3 months earlier and bets approximately 1,000 naira a day.


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