Online Betting Firms Gamble On Soccer-mad Nigeria

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By Alexis Akwagyiram and Didi Akinyelure


LAGOS, June 25 (Reuters) - Online sports betting wagering is flourishing in soccer-mad Nigeria mainly thanks to payment systems established by homegrown technology companies that are starting to make online organizations more viable.


For many 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 actually fostered a culture of cashless payments.


Fear of electronic fraud and sluggish internet speeds have held Nigerian online consumers back but sports betting firms states the new, fast digital payment systems underpinning their sites are altering mindsets towards online deals.


"We have seen substantial development in the number of payment services that are offered. All that is definitely altering the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.


"The operators will go with whoever is much faster, whoever can connect to their platform with less concerns and glitches," he said, adding that taxes from sports betting wagering in Lagos State rose 30 percent to 40 percent in 2017 from 2016.
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That growth has actually been matched by an increase 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). 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 cellphone usage and falling data expenses, Nigeria has long been seen as a great chance for online services - once consumers feel comfortable with electronic payments.


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


British online sports betting firm Betway opened its very first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.
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"There is a steady shift to online now, that is where the industry is going," Betway's Nigeria manager Lere Awokoya stated.


"The growth in the number of fintechs, and the federal government as an enabler, has actually assisted business to flourish. These technological shifts motivated Betway to start operating in Nigeria," he stated.


FINTECH COMPETITION


sports betting firms cashing in on the soccer frenzy whipped up by Nigeria's involvement on the planet Cup say they are discovering the payment systems developed by regional startups such as Paystack are proving popular online.


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


"We included Paystack as one of our payment choices without any excitement, without announcing to our consumers, and within a month it shot up to the top most secondhand payment option on the site," stated Akin Alabi, founder of NairabBET.
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He stated NairaBET, the country's second most significant sports betting company, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment option because it was added in late 2017.


Paystack was established by 2 Nigerian computer 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 investors including China's Tencent and Comcast Ventures in the United States.


Paystack, based in the mad Ikeja district of Lagos, said the number of month-to-month 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 single month," stated Emmanuel Quartey, Paystack's head of development.


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


Paystack stated it enables payments for a number of wagering firms but also a large range of companies, from energy services to transfer business to insurance company Axa Mansard.


Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme as well as endeavor 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 financiers wanting to take advantage of 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 organization is more established.


Russia's 1XBet and Slovakia's DOXXbet have actually both established 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 divided in between shops and online however the ease of electronic payments, cost of running stores and ability for customers to prevent the stigma of gaming in public suggested online deals would grow.
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But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was very important to have a shop network, not least since lots of customers still stay hesitant to spend online.


He said the business, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian wagering stores typically act as social centers where clients can enjoy soccer free of charge while putting bets.
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At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans collected to watch Nigeria's last warm up 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 stated he began gambling three months earlier and bets up to 1,000 naira a day.


"Since I have actually been playing I have actually 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)