Online Betting Firms Gamble On Soccer-mad Nigeria
By Alexis Akwagyiram and Didi Akinyelure
LAGOS, June 25 (Reuters) - Online sports betting is expanding in soccer-mad Nigeria largely thanks to payment systems established by homegrown innovation firms that are beginning to make online companies more practical.
For years, mobile payments stopped working to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa money transfers have actually promoted a culture of cashless payments.
Fear of electronic scams and sluggish web speeds have actually held Nigerian online customers back but wagering companies states the brand-new, quick digital payment systems underpinning their websites are changing attitudes towards online deals.
"We have actually seen substantial growth in the variety of payment solutions that are offered. All that is absolutely changing the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.
"The operators will opt for whoever is much faster, whoever can connect to their platform with less concerns and problems," he said, adding that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.
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That growth has actually been matched by a rise in web payments, according to information 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 jumped to 29 million worth 185 billion in 2017 and in the first quarter of 2018 there were almost 10 million worth 61 billion.
With a young population of nearly 190 million, increasing cellphone usage and falling information expenses, Nigeria has long been viewed as an excellent opportunity for online organizations - once customers feel comfy with electronic payments.
Online sports betting companies state that is occurring, though reaching the 10s of countless Nigerians without access to banking services remains a difficulty for pure online retailers.
British online sports betting firm Betway opened its first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released 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 said.
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"The development in the number of fintechs, and the federal government as an enabler, has actually assisted the organization to grow. These technological shifts motivated Betway to start running in Nigeria," he said.
FINTECH COMPETITION
sports betting companies cashing in on the soccer frenzy worked up by Nigeria's involvement worldwide Cup state they are finding the payment systems developed by regional start-ups such as Paystack are showing popular online.
Paystack and another local start-up Flutterwave, both founded in 2016, are providing competition for Nigeria's Interswitch which was set up in 2002 and was the primary platform utilized by businesses running in Nigeria.
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"We included Paystack as one of our payment choices with no fanfare, without announcing to our consumers, and within a month it shot up to the primary most pre-owned payment choice on the site," said Akin Alabi, founder of NairabBET.
He stated NairaBET, the country's 2nd greatest wagering company, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative given that it was added in late 2017.
Paystack was established by two Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who received early phase funding in Silicon Valley's Y-Combinator program.
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 frenetic Ikeja district of Lagos, stated the variety 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 single month," said Emmanuel Quartey, Paystack's head of development.
He stated an environment of developers had actually emerged around Paystack, producing software to integrate the platform into sites. "We have actually seen a development in that neighborhood and they have actually brought us along," stated Quartey.
Paystack stated it makes it possible for payments for a number of sports betting companies however also a wide variety of businesses, from utility services to carry companies to insurance provider Axa Mansard.
Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to endeavor capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million in 2015.
FOREIGN INVESTMENT
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Shifts in Nigeria's payment culture have actually corresponded with the arrival of foreign investors wanting to take advantage of sports betting.
Industry experts state the sector creates about $1 billion a year and is likely to than in South Africa and Kenya where the company is more established.
Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last 2 years while Italy's Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian firm launched in 2015.
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NairaBET's Alabi stated its sales were divided in between stores and online but the ease of electronic payments, cost of running shops and capability for clients to avoid the stigma of sports betting in public indicated online deals 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 lots of customers still remain reluctant to spend online.
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He said the company, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian sports betting shops typically act as social centers where clients can watch 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 enjoy Nigeria's final heat up game before the World Cup.
Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a TV screen inside. He said he began gambling 3 months back and bets approximately 1,000 naira a day.
"Since I have been playing I have not won anything however I think 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)