Online Sports Betting is Booming in Soccer-Mad Nigeria, Here’s Why
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 first quarter of 2018 there were nearly 10 million worth 61 billion.
Online sports betting is booming in soccer-mad Nigeria largely thanks to payment systems developed by homegrown technology firms that are starting to make online businesses more viable.
For years, mobile payments failed to take off in Nigeria as they have in countries such as Kenya, where Safaricom’s M-Pesa money transfers have fostered a culture of cashless payments.
Fear of electronic fraud and slow internet speeds have held Nigerian online consumers back but betting firms says the new, fast digital payment systems underpinning their websites are changing attitudes towards online transactions.
“We have seen significant growth in the number of payment solutions that are available. All that is definitely changing the gaming space,” said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria’s commercial capital.
“The operators will go with whoever is faster, whoever can connect to their platform with less issues and glitches,” he said, adding that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.
That growth has been matched by a rise in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central bank and licensed 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 first quarter of 2018 there were nearly 10 million worth 61 billion.
With a young population of nearly 190 million, rising mobile phone use and falling data costs, Nigeria has long been seen as a great opportunity for online businesses – once consumers feel comfortable with electronic payments.
He said an ecosystem of developers had emerged around Paystack, creating software to integrate the platform into websites. “We have seen a growth in that community and they have carried us along,” said Quartey.
Paystack said it enables payments for a number of betting firms but also a wide range of businesses, from utility services to transport companies to insurer Axa Mansard.
Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme as well as venture 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 coincided with the arrival of foreign investors hoping to tap into sports betting.
Industry experts say the sector generates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the business is more developed.
Russia’s 1XBet and Slovakia’s DOXXbet have both set up in Nigeria in the last two years while Italy’s Goldbet was ahead of 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 between shops and online but the ease of electronic payments, cost of running shops and ability for customers to avoid the stigma of gambling in public meant online transactions would grow.
But despite advances in digital payments, Kunle Soname – chairman and co-founder of Bet9ja – said it was important to have a shop network, not least because many customers still remain reluctant to spend online.
He said the company, with about 60 percent of Nigeria’s sports betting market, had an extensive network. Nigerian betting shops often act as social hubs where customers can watch soccer free of charge while placing bets.
At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans gathered to watch Nigeria’s final warm up game before the World Cup.
Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a TV screen inside. He said he started gambling three months ago and bets up to 1,000 naira a day.
“Since I have been playing I have 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; editing by David Clarke)
