Online Betting Firms Gamble On Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure


LAGOS, June 25 (Reuters) - Online sports betting is booming in soccer-mad Nigeria mainly thanks to payment systems established by homegrown technology firms that are beginning to make online companies more viable.


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


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


"We have actually seen considerable development in the number of payment options that are available. All that is certainly altering the video gaming space," stated 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 problems and glitches," he said, adding that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.
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That development 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 main bank and certified 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 very first quarter of 2018 there were almost 10 million worth 61 billion.


With a young population of almost 190 million, increasing smart phone use and falling data expenses, Nigeria has long been seen as an excellent opportunity for online businesses - once consumers feel comfy with electronic payments.


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


British online wagering firm Betway opened its first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.


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


"The growth in the variety of fintechs, and the federal government as an enabler, has assisted the service to flourish. These technological shifts encouraged Betway to start running in Nigeria," he said.


FINTECH COMPETITION


sports betting companies capitalizing the soccer frenzy whipped up by Nigeria's participation on the planet Cup state they are finding the payment systems produced by regional startups such as Paystack are proving popular online.


Paystack and another regional startup Flutterwave, both founded in 2016, are supplying competitors for Nigeria's Interswitch which was set up in 2002 and was the main platform utilized by organizations operating in Nigeria.


"We included Paystack as one of our payment options without any fanfare, without announcing to our consumers, and within a month it shot up to the primary most secondhand payment choice on the site," stated Akin Alabi, founder of NairabBET.


He stated NairaBET, the nation's second biggest wagering firm, now had 2 million routine clients on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice because it was included in late 2017.


Paystack was set up by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase funding in Silicon Valley's Y-Combinator program.
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In December 2016, it raised $1.3 million from investors consisting of and Comcast Ventures in the United States.
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Paystack, based in the mad Ikeja district of Lagos, said the variety of regular monthly deals it processed increased 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 environment of developers had emerged around Paystack, creating software application to integrate the platform into websites. "We have seen a development in that neighborhood and they have actually carried us along," said Quartey.
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Paystack said it enables payments for a variety of wagering firms however also a wide variety of businesses, from utility services to carry business to insurance company Axa Mansard.
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Flutterwave, co-founded by Nigerian business owner 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 last year.


FOREIGN INVESTMENT


Shifts in Nigeria's payment culture have coincided with the arrival of foreign financiers wanting to take advantage of sports betting.


Industry specialists state the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where business is more established.
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Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last 2 years while Italy's Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian company released in 2015.


NairaBET's Alabi stated its sales were divided between shops and online however the ease of electronic payments, cost of running stores and capability for clients to avoid the preconception of gambling in public implied online transactions would grow.


But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was necessary to have a shop network, not least since many clients still remain reluctant to invest online.


He said the business, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian wagering shops often act as social hubs where customers can see soccer free of charge while putting bets.


At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans gathered to see Nigeria's last heat up game before the World Cup.


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 earlier and bets approximately 1,000 naira a day.


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