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 wagering is booming in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology firms that are starting to make online companies more practical.
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For many 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 fraud and sluggish web speeds have actually held Nigerian online consumers back but wagering companies says the brand-new, fast digital payment systems underpinning their websites are changing mindsets towards online transactions.


"We have actually seen considerable development in the variety of payment solutions 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 industrial capital.


"The operators will choose whoever is quicker, whoever can connect to their platform with less concerns and glitches," he said, including that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.


That growth has been matched by an increase in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve 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 almost 10 million worth 61 billion.


With a young population of almost 190 million, rising smart phone use and falling data costs, Nigeria has long been seen as a fantastic chance for online organizations - once consumers feel comfortable with electronic payments.


Online sports betting firms say that is taking place, though reaching the tens of millions of Nigerians without access to banking services remains a challenge for pure online merchants.


British online wagering firm Betway opened its very first African service 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 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 assisted business to grow. These technological shifts motivated Betway to begin running in Nigeria," he stated.


FINTECH COMPETITION


sports betting companies capitalizing the soccer craze whipped up by Nigeria's participation worldwide Cup say they are finding the payment systems created by local startups such as Paystack are showing popular online.


Paystack and another regional startup Flutterwave, both founded in 2016, are providing competition for Nigeria's Interswitch which was established in 2002 and was the primary platform used by companies running in Nigeria.


"We included Paystack as one of our payment options with no fanfare, without revealing to our customers, and within a month it soared to the number one most pre-owned payment option on the website," stated Akin Alabi, creator of NairabBET.


He stated NairaBET, the country's second most significant wagering firm, now had 2 million routine clients on its site, up from 500,000 in 2013, and Paystack remained the most popular payment choice considering that it was included 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 including China's Tencent and Comcast Ventures in the United States.


Paystack, based in the frenetic Ikeja district of Lagos, stated the variety of month-to-month 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 each and every single month," said Emmanuel Quartey, Paystack's head of development.


He stated an ecosystem of designers had actually emerged around Paystack, developing software application to incorporate the platform into websites. "We have seen a growth in that neighborhood and they have carried us along," stated Quartey.


Paystack said it allows payments for a variety of wagering firms but likewise a wide variety of businesses, from energy services to carry business to insurance provider Axa Mansard.


Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme as well as 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 of foreign financiers hoping to use sports betting.


Industry specialists say the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the business 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 led the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm released in 2015.


NairaBET's Alabi stated its sales were divided in between shops and online however the ease of electronic payments, expense of running stores and capability for clients to avoid the preconception of sports betting in public indicated online deals would grow.


But despite 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 clients still stay hesitant to spend online.


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


At a BetKing hall deep inside the dynamic Oshodi market in Lagos, dozens of soccer fans collected to view 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 started gambling 3 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 one day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)
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