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 is flourishing in soccer-mad Nigeria largely thanks to payment systems developed by homegrown technology firms that are beginning to make online businesses more feasible.


For years, mobile payments stopped working to take off in Nigeria as they have in nations 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 held Nigerian online customers back however sports betting companies states the brand-new, quick digital payment systems underpinning their websites are altering attitudes towards online transactions.


"We have actually seen considerable development in the variety of payment solutions that are offered. All that is absolutely 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 faster, whoever can connect to their platform with less issues and glitches," he said, including 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 a rise in web payments, according to data 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 an overall 132 billion naira ($420 million). Transactions leapt 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 almost 190 million, increasing smart phone use and falling information expenses, Nigeria has actually long been seen as a fantastic chance for online businesses - once consumers feel comfy with electronic payments.


Online gaming companies state that is occurring, though reaching the tens of millions of Nigerians without access to banking services remains an obstacle for pure online retailers.


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


"There is a steady 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 federal government as an enabler, has assisted business to prosper. 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 involvement on the planet Cup state they are finding the payment systems created by local startups such as Paystack are showing popular online.


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


"We added Paystack as one of our payment options with no excitement, without announcing to our consumers, and within a month it soared to the top most pre-owned payment choice on the site," stated Akin Alabi, creator of NairabBET.


He stated NairaBET, the nation's second 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 choice since it was added in late 2017.


Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got 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 mad Ikeja district of Lagos, stated the number of regular 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," stated Emmanuel Quartey, Paystack's head of growth.


He stated an environment of designers had actually emerged around Paystack, producing software application to incorporate the platform into websites. "We have actually seen a development because community and they have actually carried us along," stated Quartey.


Paystack said it makes it possible for payments for a variety of sports betting firms however likewise a vast array of businesses, from utility services to transfer companies to insurer Axa Mansard.


Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program along with endeavor capitalists 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 wishing to take advantage of sports betting wagering.


Industry professionals say the sector generates about $1 billion a year and is 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 two years while Italy's Goldbet was ahead of the pattern, taking a half stake in market leader Bet9ja when the Nigerian company introduced in 2015.


NairaBET's Alabi stated its sales were split between shops and online but the ease of electronic payments, expense of running stores and capability for clients to avoid the preconception of gaming in public meant online transactions would grow.


But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was necessary to have a shop network, not least because lots of consumers still remain reluctant to spend online.


He said the company, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian wagering shops often act as social hubs where clients can see soccer complimentary of charge while placing bets.


At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans collected to view Nigeria's final heat up video game before the World Cup.
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Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a TV screen inside. He said he started 3 months ago and bets approximately 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)
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