Online Betting Firms Gamble On Soccer-mad Nigeria
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By and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is expanding in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology firms that are starting to make online companies more feasible.
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For many years, mobile payments failed 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 held Nigerian online consumers back however sports betting companies says the brand-new, fast digital payment systems underpinning their websites are changing mindsets towards online deals.
"We have seen considerable development in the variety of payment services that are offered. All that is certainly altering the gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.
"The operators will choose whoever is faster, whoever can link to their platform with less issues and glitches," he stated, adding that taxes from sports betting wagering 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 Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central 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 nearly 10 million worth 61 billion.
With a young population of almost 190 million, increasing cellphone usage and falling data expenses, Nigeria has long been seen as a terrific opportunity for online businesses - once customers feel comfortable with electronic payments.
Online sports betting firms state that is occurring, though reaching the 10s of millions of Nigerians without access to banking services stays an obstacle for pure online retailers.
British online wagering company Betway opened its very first African company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.
"There is a steady shift to online now, that is where the market is going," Betway's Nigeria supervisor Lere Awokoya stated.
"The development in the number of fintechs, and the federal government as an enabler, has assisted business to flourish. These technological shifts encouraged Betway to begin running in Nigeria," he said.
FINTECH COMPETITION
sports betting companies cashing in on the soccer frenzy worked up by Nigeria's involvement on the planet Cup say they are finding the payment systems developed by local 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 established in 2002 and was the primary platform used by organizations running in Nigeria.
"We added Paystack as one of our payment choices with no fanfare, without revealing to our customers, and within a month it shot up to the primary most used payment option on the website," said Akin Alabi, founder of NairabBET.
He stated NairaBET, the nation's 2nd biggest sports betting firm, now had 2 million regular clients on its website, up from 500,000 in 2013, and Paystack remained the most popular payment alternative because it was included late 2017.
Paystack was set up by two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who received early stage 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 mad Ikeja district of Lagos, stated the number of regular 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 each and every single month," stated Emmanuel Quartey, Paystack's head of development.
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He said an environment of designers had emerged around Paystack, producing software application to integrate the platform into sites. "We have actually seen a development in that community and they have actually carried us along," said Quartey.
Paystack stated it makes it possible for payments for a variety of sports betting firms but also a large range of companies, from energy services to transport companies to insurance company Axa Mansard.
Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also 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
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Shifts in Nigeria's payment culture have actually accompanied the arrival of foreign investors hoping to use sports betting wagering.
Industry specialists state the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the company is more established.
Russia's 1XBet and Slovakia's DOXXbet have both set up in Nigeria in the last two years while Italy's Goldbet led the trend, taking a half stake in market leader Bet9ja when the Nigerian firm released in 2015.
NairaBET's Alabi stated its sales were split in between shops and online however the ease of electronic payments, cost of running stores and capability for consumers to prevent the preconception of gaming in public suggested online deals would grow.
But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was very important to have a store network, not least since many customers still stay reluctant to invest online.
He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering stores often serve as social centers where consumers can watch soccer complimentary of charge while placing bets.
At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans collected to enjoy Nigeria's last heat up video 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 said he began sports betting three months back and bets as much as 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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