Online Betting Firms Gamble on Soccer-mad Nigeria
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By Alexis Akwagyiram and Didi Akinyelure
LAGOS, June 25 (Reuters) - Online sports betting is expanding in soccer-mad Nigeria mainly thanks to payment systems established by homegrown technology firms that are to make online businesses more practical.
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 actually cultivated a culture of cashless payments.
Fear of electronic fraud and sluggish internet speeds have held Nigerian online consumers back however sports betting 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 number of payment services that are offered. All that is definitely altering the video gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.
"The operators will choose whoever is much faster, whoever can link to their platform with less issues and glitches," he said, including that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.
That development has actually 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 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, rising smart phone use and falling information expenses, Nigeria has long been viewed as a great chance for online organizations - once customers feel comfy with electronic payments.
Online sports betting firms say that is happening, though reaching the 10s of countless Nigerians without access to banking services stays a difficulty for pure online retailers.
British online sports betting firm Betway opened its very 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 supervisor Lere Awokoya said.
"The development in the number of fintechs, and the government as an enabler, has helped business to thrive. These technological shifts motivated Betway to start running in Nigeria," he said.
FINTECH COMPETITION
sports betting companies cashing in on the soccer frenzy whipped up by Nigeria's involvement in the World Cup state they are discovering the payment systems created by local startups such as Paystack are showing popular online.
Paystack and another regional startup Flutterwave, both founded in 2016, are offering competition for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by organizations running in Nigeria.
"We added Paystack as one of our payment alternatives with no fanfare, without announcing to our customers, and within a month it soared to the top most used payment choice on the site," said Akin Alabi, creator of NairabBET.
He said NairaBET, the country's 2nd greatest wagering company, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative since it was included late 2017.
Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage funding in Silicon Valley's Y-Combinator programme.
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 frenetic 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 every month," said Emmanuel Quartey, Paystack's head of development.
He stated an environment of developers had actually emerged around Paystack, creating software application to integrate the platform into websites. "We have seen a growth because neighborhood and they have actually carried us along," said Quartey.
Paystack stated it enables payments for a variety of sports betting companies however also a large range of organizations, from energy services to transfer business to insurer Axa Mansard.
Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program along with endeavor 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 accompanied the arrival of foreign investors intending to use sports betting.
Industry professionals 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.
Russia's 1XBet and Slovakia's DOXXbet have actually both set up 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 firm launched in 2015.
NairaBET's Alabi stated its sales were split between stores and online however the ease of electronic payments, cost of running stores and capability for clients to prevent the preconception of gaming in public meant online transactions would grow.
But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was crucial to have a store network, not least due to the fact that many clients still remain reluctant to invest online.
He said the company, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian wagering stores often function as social hubs where consumers can see soccer complimentary of charge while putting bets.
At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans gathered to watch Nigeria's final heat up video game before the World Cup.
Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a TV screen inside. He stated he began gambling 3 months ago and bets approximately 1,000 naira a day.
"Since I have been playing I have actually not won anything but 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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