Online Betting Firms Gamble On Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure


LAGOS, June 25 (Reuters) - Online sports betting wagering is growing in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown innovation companies that are beginning to make online companies more practical.


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


Fear of electronic fraud and slow internet speeds have actually held Nigerian online customers back however wagering companies says the new, fast digital payment systems underpinning their websites are altering mindsets towards online transactions.


"We have actually seen considerable growth in the number of payment services that are readily available. All that is certainly changing the gaming area," 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 link to their platform with less issues and glitches," he said, including that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.


That development has been matched by a rise in web payments, according to data from the Settlement System (NIBSS), which is owned by the reserve bank and certified banks.


In 2016, there were 14 million web payments worth a total 132 billion naira ($420 million). Transactions leapt 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, rising smart phone usage and falling information expenses, Nigeria has long been seen as a fantastic chance for online businesses - once consumers feel comfy with electronic payments.


Online gambling companies state that is happening, though reaching the 10s of countless Nigerians without access to banking services remains 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 introduced 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.
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"The growth in the number of fintechs, and the government as an enabler, has helped business to prosper. These technological shifts motivated Betway to start operating in Nigeria," he stated.


FINTECH COMPETITION


sports betting companies capitalizing the soccer frenzy worked up by Nigeria's involvement worldwide Cup state they are finding the payment systems developed by regional startups such as Paystack are proving 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 used by businesses running in Nigeria.


"We added Paystack as one of our payment alternatives with no excitement, without revealing to our customers, and within a month it soared to the primary most used payment alternative on the website," stated Akin Alabi, creator of NairabBET.
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He said NairaBET, the nation's 2nd biggest sports betting firm, now had 2 million regular clients on its site, up from 500,000 in 2013, and Paystack remained the most popular payment option considering that it was added in late 2017.


Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage funding in Silicon Valley's Y-Combinator program.
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In December 2016, it raised $1.3 million from investors including 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 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 month," said Emmanuel Quartey, Paystack's head of development.


He stated a community of designers had actually emerged around Paystack, producing software application to incorporate the platform into websites. "We have seen a growth in that community and they have actually carried us along," said Quartey.
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Paystack said it allows payments for a variety of sports betting firms but also a vast array of organizations, from utility services to carry business to insurer Axa Mansard.
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Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme in addition to 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 actually coincided with the arrival of foreign investors intending to take advantage of sports betting wagering.


Industry professionals state the sector produces about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the business is more established.


Russia's 1XBet and Slovakia's DOXXbet have both set up 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 company launched in 2015.


NairaBET's Alabi said its sales were divided between stores and online however the ease of electronic payments, expense of running stores and ability for customers to prevent the stigma of gaming in public indicated online transactions would grow.


But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was very important to have a shop network, not least since numerous customers still remain hesitant to spend online.


He stated the company, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian sports betting stores often function as social centers where customers can see soccer totally free of charge while putting bets.
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At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans collected to watch 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 television screen inside. He said he started gambling 3 months ago 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; editing by David Clarke)