Online Betting Firms Gamble On Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure


LAGOS, June 25 (Reuters) - Online sports betting is growing in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown innovation companies that are starting to make online services more viable.
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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 promoted a culture of cashless payments.


Fear of electronic scams and slow web speeds have held Nigerian online customers back but wagering firms states the brand-new, quick digital payment systems underpinning their websites are altering mindsets towards online deals.


"We have seen considerable development in the variety of payment options that are offered. All that is certainly altering the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.


"The operators will opt for whoever is faster, whoever can connect to their platform with less problems and glitches," he stated, including that taxes from sports betting wagering 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 licensed 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 very first quarter of 2018 there were almost 10 million worth 61 billion.


With a young population of almost 190 million, rising smart phone usage and falling data expenses, Nigeria has long been viewed as a for online organizations - once customers feel comfy with electronic payments.


Online gaming companies state that is taking place, though reaching the 10s of millions of Nigerians without access to banking services remains a challenge for pure online merchants.


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


"There is a steady shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya stated.


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


FINTECH COMPETITION


sports betting firms capitalizing the soccer craze worked up by Nigeria's participation worldwide Cup say they are finding the payment systems created by local start-ups such as Paystack are showing popular online.


Paystack and another local start-up Flutterwave, both established in 2016, are supplying competition for Nigeria's Interswitch which was established in 2002 and was the main platform used by companies operating in Nigeria.


"We added Paystack as one of our payment choices with no fanfare, without announcing to our consumers, and within a month it shot up to the number one most secondhand payment choice on the website," stated Akin Alabi, founder of NairabBET.


He said NairaBET, the nation's second greatest sports betting firm, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment option since it was included late 2017.


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


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 mad Ikeja district of Lagos, said the variety of monthly deals 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 single month," stated Emmanuel Quartey, Paystack's head of growth.


He said a community of developers had emerged around Paystack, creating software application to incorporate the platform into sites. "We have actually seen a development in that neighborhood and they have carried us along," stated Quartey.


Paystack stated it makes it possible for payments for a variety of wagering companies however also a large range of businesses, from energy services to transfer business to insurer Axa Mansard.


Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program as well as 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 corresponded with the arrival of foreign investors intending to use sports betting.


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


Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last 2 years while Italy's Goldbet was ahead of the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian company introduced in 2015.


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


But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was very important to have a store network, not least because numerous clients still stay hesitant to invest online.


He said the business, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian wagering stores often act as social centers where consumers can watch soccer complimentary of charge while positioning bets.


At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans collected to enjoy 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 fixated on a television screen inside. He said he began sports betting three months ago and bets as much as 1,000 naira a day.


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