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 expanding in soccer-mad Nigeria largely thanks to payment systems developed by homegrown innovation companies that are beginning to make online organizations more feasible.
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For many years, mobile payments failed to take off in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa cash transfers have actually a culture of cashless payments.


Fear of electronic fraud and slow internet speeds have actually held Nigerian online consumers back but wagering firms says the brand-new, quick digital payment systems underpinning their sites are changing mindsets towards online transactions.


"We have seen significant development in the variety of payment solutions that are available. All that is definitely altering the video 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 concerns and glitches," he stated, including that taxes from sports betting wagering in Lagos State rose 30 percent to 40 percent in 2017 from 2016.


That development has actually been matched by an increase 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 a total 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 cellphone use and falling information costs, Nigeria has actually long been viewed as an excellent opportunity for online organizations - once consumers feel comfortable with electronic payments.


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


British online sports betting company Betway opened its very first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.


"There is a progressive shift to online now, that is where the market is going," Betway's Nigeria supervisor Lere Awokoya said.
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"The growth in the variety of fintechs, and the government as an enabler, has assisted business to prosper. These technological shifts encouraged Betway to begin running in Nigeria," he said.


FINTECH COMPETITION


sports betting firms cashing in on the soccer craze worked up by Nigeria's participation on the planet Cup state they are discovering the payment systems created by local 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 set up in 2002 and was the primary platform utilized by services operating in Nigeria.


"We included Paystack as one of our payment alternatives with no excitement, without announcing to our customers, and within a month it shot up to the primary most secondhand payment alternative on the website," said Akin Alabi, founder of NairabBET.


He said NairaBET, the nation's second most significant wagering company, now had 2 million regular customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative because it was added in late 2017.


Paystack was established by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got 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 mad Ikeja district of Lagos, said the number of monthly transactions it processed rose from about 8,000 in early 2016 to more than 900,000 since 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 a community of designers had actually emerged around Paystack, developing software to integrate the platform into websites. "We have seen a development in that neighborhood and they have actually brought us along," stated Quartey.


Paystack said it enables payments for a variety of wagering companies however also a wide variety of businesses, from utility services to carry companies to insurance company Axa Mansard.


Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme along with venture 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 accompanied the arrival of foreign financiers wanting to use sports betting wagering.


Industry specialists say the sector creates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the service is more established.


Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last 2 years while Italy's Goldbet was ahead of the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm introduced in 2015.


NairaBET's Alabi stated its sales were split in between stores and online but the ease of electronic payments, cost of running shops and capability for consumers to prevent the preconception of sports betting in public implied online transactions 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 since many customers still remain unwilling to spend online.


He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian sports betting stores frequently act as social centers where customers can watch soccer complimentary of charge while positioning bets.


At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans gathered to see Nigeria's final heat up video game before the World Cup.
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Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a TV screen inside. He said he began sports betting three months back and bets up to 1,000 naira a day.


"Since I have actually been playing I have not won anything however I believe that a person day I will win," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)
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