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 mostly thanks to payment systems established by homegrown technology firms that are starting to make online services more feasible.


For years, mobile payments stopped working to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa cash transfers have promoted a culture of cashless payments.
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Fear of electronic fraud and sluggish web speeds have actually held Nigerian online customers back however wagering firms states the brand-new, fast digital payment systems underpinning their sites are altering attitudes towards online transactions.


"We have actually seen considerable development in the variety of payment options that are readily available. All that is certainly changing the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.


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


That growth 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 main 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 first quarter of 2018 there were nearly 10 million worth 61 billion.


With a young population of nearly 190 million, increasing smart phone usage and falling information expenses, Nigeria has actually long been viewed as an excellent opportunity for online companies - once customers feel comfy with electronic payments.


Online gaming companies state that is taking place, though reaching the 10s of millions of Nigerians without access to banking services stays a difficulty for pure online retailers.


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


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


"The growth in the variety of fintechs, and the government as an enabler, has actually helped the organization to grow. These technological shifts motivated Betway to begin operating in Nigeria," he stated.


FINTECH COMPETITION


sports betting firms cashing in on the soccer craze whipped up by Nigeria's participation on the planet Cup say they are discovering the payment systems produced by local startups such as Paystack are showing popular online.


Paystack and another regional startup 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 running in Nigeria.


"We included Paystack as one of our payment options without any fanfare, without announcing to our clients, and within a month it shot up to the number one most pre-owned payment choice on the site," said Akin Alabi, creator of NairabBET.


He said NairaBET, the country's second greatest sports betting firm, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment option considering that it was included in late 2017.


Paystack was set up by 2 Nigerian computer 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 investors 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 each and every single month," stated Emmanuel Quartey, Paystack's head of development.


He said an environment of developers had emerged around Paystack, creating software application to integrate the platform into websites. "We have actually seen a growth in that community and they have brought us along," stated Quartey.
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Paystack stated it allows payments for a variety of wagering companies but likewise a vast array of services, from utility services to transfer companies to insurance provider Axa Mansard.


Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme along with investor 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 actually coincided with the arrival of foreign investors hoping to take advantage of sports betting.
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Industry professionals state the sector creates 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 established in Nigeria in the last two years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian company launched in 2015.
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NairaBET's Alabi stated its sales were split in between shops and online however the ease of electronic payments, cost of running stores and ability for customers to prevent the stigma of sports betting in public suggested online deals would grow.


But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was very important to have a shop network, not least because lots of customers still stay reluctant to spend online.
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He said the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting shops typically function as social centers where consumers can enjoy soccer of charge while placing bets.


At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans collected to enjoy Nigeria's final warm up game before the World Cup.


Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a television screen inside. He stated he started sports betting 3 months ago and bets approximately 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)