Online Betting Firms Gamble on Soccer-mad Nigeria

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By Alexis Akwagyiram and Didi Akinyelure

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By Alexis Akwagyiram and Didi Akinyelure

Register at Bet9ja using the promotion code YOHAIG for a N100,000 welcome bonus

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

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


Fear of electronic fraud and sluggish internet speeds have held Nigerian online consumers back but sports betting firms says the new, quick digital payment systems underpinning their websites are changing attitudes towards online deals.


"We have seen considerable growth in the number of payment options that are offered. All that is definitely altering the 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 much faster, whoever can connect to their platform with less problems and glitches," he stated, adding that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.


That growth has been matched by an increase in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main 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 almost 10 million worth 61 billion.


With a young population of almost 190 million, increasing cellphone usage and falling information expenses, Nigeria has actually long been viewed as an excellent chance for online businesses - once consumers feel comfortable with electronic payments.

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Online gaming companies state that is happening, though reaching the tens of countless Nigerians without access to banking services stays an obstacle for pure online sellers.


British online sports betting firm Betway opened its first African business 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 manager Lere Awokoya stated.


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


FINTECH COMPETITION


sports betting firms cashing in on the soccer craze whipped up by Nigeria's involvement on the planet Cup say they are discovering the payment systems developed by regional start-ups such as Paystack are proving popular online.


Paystack and another local start-up Flutterwave, both established in 2016, are providing 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 excitement, without announcing to our clients, 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 nation's 2nd biggest sports betting firm, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment option given that it was included late 2017.


Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage financing 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 month-to-month transactions it processed increased 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 growth.

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


Paystack stated it enables payments for a number of sports betting firms however also a broad variety of organizations, from energy services to carry business to insurance company Axa Mansard.


Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme as well as 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 corresponded with the arrival of foreign investors intending to use sports betting wagering.


Industry professionals 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 developed.


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

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NairaBET's Alabi said its sales were divided in between stores and online however the ease of electronic payments, cost of running stores and ability for consumers to prevent the preconception of sports betting in public suggested 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 since many customers still remain unwilling to invest online.


He said the business, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering stores often act as social centers where clients can watch soccer free of charge while placing bets.


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


Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a television screen inside. He stated he began gambling 3 months earlier and bets approximately 1,000 naira a day.


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

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