Online Betting Firms Gamble On Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure


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


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


Fear of electronic scams and slow have actually held Nigerian online consumers back however wagering companies states the brand-new, quick digital payment systems underpinning their websites are changing mindsets towards online deals.


"We have actually seen significant growth in the number of payment options that are offered. All that is definitely changing the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.


"The operators will opt for whoever is faster, whoever can connect to their platform with less problems and problems," he said, including that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.


That development 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 main bank and licensed banks.


In 2016, there were 14 million web payments worth an overall 132 billion naira ($420 million). Transactions leapt 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 data costs, Nigeria has actually long been seen as a great chance for online services - once customers feel comfy with electronic payments.
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Online gambling companies say that is occurring, though reaching the 10s of countless Nigerians without access to banking services remains an obstacle for pure online merchants.


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


"There is a steady shift to online now, that is where the market is going," Betway's Nigeria manager Lere Awokoya stated.


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


FINTECH COMPETITION


sports betting companies cashing in on the soccer craze whipped up by Nigeria's involvement worldwide Cup say they are discovering the payment systems produced by regional startups such as Paystack are proving popular online.


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


"We included Paystack as one of our payment choices with no excitement, without revealing to our consumers, and within a month it shot up to the top most pre-owned payment option on the website," said Akin Alabi, founder of NairabBET.


He stated NairaBET, the country's second biggest wagering company, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative considering that it was added in late 2017.


Paystack was established by two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early stage funding 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 mad Ikeja district of Lagos, said the number of regular monthly deals 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," said Emmanuel Quartey, Paystack's head of growth.


He stated an environment of developers had actually emerged around Paystack, creating software application to integrate the platform into websites. "We have seen a growth in that community and they have carried us along," stated Quartey.


Paystack stated it allows payments for a number of wagering firms but also a wide variety of businesses, from utility services to carry business to insurance company Axa Mansard.


Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program as well as investor Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million in 2015.
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FOREIGN INVESTMENT


Shifts in Nigeria's payment culture have accompanied the arrival of foreign investors hoping to use sports betting.
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Industry specialists 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 established.


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 pattern, taking a half stake in market leader Bet9ja when the Nigerian firm released in 2015.


NairaBET's Alabi stated its sales were split between shops and online but the ease of electronic payments, cost of running stores and capability for customers to prevent the stigma of gambling in public implied online deals would grow.


But regardless 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 numerous consumers still remain unwilling to invest online.


He stated the company, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian sports betting shops frequently function as social hubs where consumers can view soccer complimentary of charge while putting bets.


At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans collected to enjoy Nigeria's last 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 stated he started sports betting three months back and bets as much as 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," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)