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 expanding in soccer-mad Nigeria mostly thanks to payment systems established by homegrown innovation firms that are beginning to make online companies more viable.
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For years, mobile payments failed to take off in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa money transfers have promoted a culture of cashless payments.


Fear of electronic scams and slow web speeds have actually held Nigerian online customers back however wagering companies says the brand-new, quick digital payment systems underpinning their sites are changing attitudes towards online transactions.


"We have actually seen significant development in the variety of payment options that are readily available. All that is absolutely altering the gaming space," 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 connect to their platform with less issues and problems," he stated, including that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.


That growth has actually been matched by a rise in web payments, according to information 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 very first quarter of 2018 there were almost 10 million worth 61 billion.


With a young population of nearly 190 million, rising smart phone usage and falling information expenses, Nigeria has actually long been seen as a fantastic opportunity for online organizations - once customers feel comfortable with electronic payments.


Online gaming firms say that is happening, though reaching the 10s of millions of Nigerians without access to banking services stays an obstacle for pure online merchants.


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


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


"The development in the variety of fintechs, and the federal government as an enabler, has actually helped business to prosper. These technological shifts encouraged Betway to start running in Nigeria," he said.


FINTECH COMPETITION


sports betting firms capitalizing the soccer frenzy worked up by Nigeria's participation worldwide Cup state they are discovering the payment systems produced by regional start-ups such as Paystack are proving popular online.


Paystack and another regional start-up Flutterwave, both established in 2016, are supplying competition for Nigeria's Interswitch which was established in 2002 and was the main platform utilized by businesses operating in Nigeria.


"We included Paystack as one of our payment options with no fanfare, without announcing to our clients, and within a month it soared to the top most secondhand payment alternative on the website," stated Akin Alabi, creator of NairabBET.


He stated NairaBET, the nation's second biggest sports betting company, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative since it was added in late 2017.


Paystack was set up by 2 Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who got early phase financing in Silicon Valley's Y-Combinator program.


In December 2016, it raised $1.3 million from financiers consisting of China's Tencent and Comcast Ventures in the United States.


Paystack, based in the frenetic Ikeja district of Lagos, said the number of 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," stated Emmanuel Quartey, Paystack's head of development.


He stated a community of developers had actually emerged around Paystack, producing software application to integrate the platform into websites. "We have seen a development in that neighborhood and they have actually brought us along," said Quartey.


Paystack stated it enables payments for a variety of sports betting companies however also a large range of services, from to transport business to insurer Axa Mansard.


Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to 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 coincided with the arrival of foreign financiers intending to use sports betting.


Industry specialists say the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the service 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 was ahead of the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian company released in 2015.


NairaBET's Alabi said its sales were divided between stores and online but the ease of electronic payments, cost of running stores and ability for consumers to prevent the preconception of gambling in public indicated online transactions would grow.


But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was essential to have a shop network, not least because lots of customers still stay reluctant 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 frequently act as social centers where clients can watch soccer complimentary of charge while positioning bets.


At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans gathered to watch 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 fixated on a television screen inside. He stated he began sports betting three months back and bets approximately 1,000 naira a day.


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