Online Betting Firms Gamble On Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure


LAGOS, June 25 (Reuters) - Online sports betting is flourishing in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology companies that are starting to make online businesses more practical.
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For many years, mobile payments failed to remove 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 scams and sluggish internet speeds have actually held Nigerian online customers back however wagering companies says the brand-new, fast digital payment systems underpinning their sites are changing mindsets towards online transactions.


"We have actually seen significant growth in the number of payment options that are readily available. All that is certainly changing the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.


"The operators will opt for whoever is quicker, whoever can link to their platform with less issues and problems," he stated, 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 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 jumped 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 nearly 190 million, rising mobile phone usage and falling data expenses, Nigeria has actually long been viewed as an excellent chance for online services - once consumers feel comfy with electronic payments.


Online sports betting companies say that is taking place, though reaching the 10s of countless Nigerians without access to banking services remains a challenge for pure online sellers.
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British online wagering company 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 said.


"The development in the number of fintechs, and the government as an enabler, has actually assisted business to flourish. These technological shifts encouraged Betway to start running in Nigeria," he said.


FINTECH COMPETITION


sports betting firms cashing in on the soccer craze worked up by Nigeria's involvement on the planet Cup say they are finding the payment systems produced by regional startups such as Paystack are showing popular online.


Paystack and another regional start-up Flutterwave, both founded in 2016, are offering competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform used by services running in Nigeria.


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


He said NairaBET, the nation's second most significant wagering firm, now had 2 million regular clients on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative considering that it was included in late 2017.


Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage financing in Silicon Valley's Y-Combinator program.


In December 2016, it raised $1.3 million from financiers including China's Tencent and Comcast Ventures in the United States.


Paystack, based in the frenetic Ikeja district of Lagos, said the variety 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," said Emmanuel Quartey, Paystack's head of development.


He said an ecosystem of designers had actually emerged around Paystack, producing software application to integrate the platform into sites. "We have seen a development in that community and they have actually carried us along," said Quartey.


Paystack stated it enables payments for a variety of sports betting firms but likewise a wide variety of services, from utility services to transfer companies to insurance provider Axa Mansard.


Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme as well as 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 accompanied the arrival of foreign financiers hoping to take advantage of sports betting wagering.


Industry experts state the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where business is more developed.
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Russia's 1XBet and Slovakia's DOXXbet have actually 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 company introduced in 2015.


NairaBET's Alabi said its sales were divided between stores and online however the ease of electronic payments, cost of running shops and ability for customers to prevent 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 - stated it was necessary to have a shop network, not least because lots of 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 wagering shops typically serve as social hubs where clients can watch soccer complimentary of charge while placing bets.


At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to watch Nigeria's final heat up game before the World Cup.
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Richard Onuka, a factory worker who earns 25,000 naira a month, was focused on a television screen inside. He said he started gambling 3 months ago and bets approximately 1,000 naira a day.


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