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 growing in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown technology firms that are starting to make online companies more feasible.


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


Fear of electronic scams and sluggish internet speeds have actually held Nigerian online customers back however sports betting firms states the new, fast digital payment systems underpinning their websites are changing mindsets towards online transactions.


"We have actually seen substantial development in the number of payment solutions that are offered. All that is absolutely changing the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.


"The operators will choose whoever is much faster, whoever can connect to their platform with less problems and glitches," 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 a rise in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central 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 very first quarter of 2018 there were nearly 10 million worth 61 billion.


With a young population of almost 190 million, increasing mobile phone use and falling information costs, Nigeria has actually long been viewed as a great chance for online services - once customers feel comfortable with electronic payments.


Online sports betting companies say that is happening, though reaching the tens of countless Nigerians without access to banking services remains a difficulty for pure online retailers.


British online wagering 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 gradual shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya said.


"The development in the variety of fintechs, and the federal government as an enabler, has actually assisted business to thrive. These technological shifts motivated Betway to begin running in Nigeria," he stated.


FINTECH COMPETITION


sports betting companies capitalizing the soccer frenzy worked up by Nigeria's involvement in the World Cup state they are discovering the payment systems developed by regional startups such as Paystack are showing popular online.


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


"We included Paystack as one of our payment choices with no fanfare, without announcing to our consumers, and within a month it soared to the primary most used payment option on the website," said Akin Alabi, founder of NairabBET.


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


Paystack was established by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early phase financing in 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 number of monthly transactions it processed rose 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 development.


He said an environment of designers had emerged around Paystack, developing software to integrate the platform into sites. "We have actually seen a growth because neighborhood and they have actually carried us along," said Quartey.


Paystack said it allows payments for a number of sports betting companies however also a wide variety of businesses, from utility services to carry business to insurance provider Axa Mansard.


Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme along with investor 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 actually accompanied the arrival of foreign investors wishing to use sports betting.


Industry specialists say the sector produces about $1 billion a year and is most 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 established in Nigeria in the last 2 years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian firm launched in 2015.


NairaBET's Alabi said its sales were divided between shops and online but the ease of electronic payments, cost of running shops and capability for customers to avoid the preconception of gaming in public implied online deals would grow.


But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was essential to have a shop network, not least because numerous clients still stay unwilling to invest online.


He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian sports betting stores often function as social hubs where consumers can watch soccer complimentary of charge while positioning bets.


At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans collected to view Nigeria's last warm 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 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 actually not won anything but 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)