Online Betting Firms Gamble on Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure

By Alexis Akwagyiram and Didi Akinyelure

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


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


Fear of electronic fraud and sluggish internet speeds have actually held Nigerian online consumers back but wagering firms says the new, fast digital payment systems underpinning their sites are changing attitudes towards online deals.


"We have seen substantial development in the variety of payment solutions that are offered. All that is definitely changing the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.


"The operators will go with whoever is faster, whoever can connect to their platform with less problems and glitches," he said, adding that taxes from sports betting wagering 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 information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve bank and certified banks.


In 2016, there were 14 million web payments worth an overall 132 billion naira ($420 million). Transactions jumped 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 mobile phone usage and falling data expenses, Nigeria has actually long been viewed as a fantastic opportunity for online businesses - once consumers feel comfortable with electronic payments.


Online sports betting companies state that is happening, though reaching the tens of countless Nigerians without access to banking services remains an obstacle for pure online merchants.


British online sports betting company Betway opened its very first African company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.


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

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"The development in the variety of fintechs, and the government as an enabler, has helped the organization to thrive. These technological shifts motivated Betway to begin running in Nigeria," he said.


FINTECH COMPETITION

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sports betting firms cashing in on the soccer frenzy whipped up by Nigeria's involvement worldwide Cup state they are discovering the payment systems produced by local startups such as Paystack are showing popular online.


Paystack and another local 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 services operating in Nigeria.


"We added Paystack as one of our payment choices with no excitement, without announcing to our consumers, and within a month it soared to the number one most used payment choice on the website," said Akin Alabi, creator of NairabBET.


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


Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase financing in Silicon Valley's Y-Combinator programme.


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

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Paystack, based in the frenetic Ikeja district of Lagos, said the number of month-to-month 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 an environment of designers had emerged around Paystack, producing software to integrate the platform into sites. "We have actually seen a growth in that neighborhood and they have actually carried us along," said Quartey.


Paystack said it enables payments for a variety of sports betting companies however also a broad variety of services, from utility services to transport companies to insurance provider Axa Mansard.


Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program along with investor 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 actually corresponded with the arrival of foreign financiers wishing to take advantage of 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 business is more established.

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Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last two years while Italy's Goldbet was ahead of the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm released in 2015.


NairaBET's Alabi stated its sales were split between shops and online but the ease of electronic payments, cost of running shops and ability for customers to prevent the preconception of sports betting in public suggested online transactions would grow.

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


He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian sports betting shops often serve as social centers where clients can watch soccer totally free of charge while positioning bets.


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


Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a TV screen inside. He stated he began sports betting 3 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 believe that one 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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