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 wagering is booming in soccer-mad Nigeria mainly thanks to payment systems established by homegrown innovation companies that are starting to make online businesses more practical.
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For several years, mobile payments stopped working to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have fostered a culture of cashless payments.


Fear of electronic scams and sluggish web speeds have held Nigerian online customers back but sports betting firms says the brand-new, quick digital payment systems underpinning their websites are changing mindsets towards online deals.


"We have actually seen considerable growth in the number of payment options that are readily available. All that is absolutely changing the video gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.


"The operators will opt for whoever is faster, whoever can link 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 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 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 data expenses, Nigeria has long been seen as a terrific opportunity for online organizations - once consumers feel comfy with electronic payments.


Online gambling firms state that is occurring, though reaching the tens of without access to banking services remains a difficulty for pure online retailers.


British online sports betting company 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 gradual 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 actually assisted business to prosper. These technological shifts motivated Betway to begin operating in Nigeria," he stated.


FINTECH COMPETITION


sports betting firms cashing in on the soccer craze whipped up by Nigeria's involvement on the planet Cup state they are finding the payment systems produced by regional startups such as Paystack are proving popular online.
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Paystack and another regional start-up Flutterwave, both founded in 2016, are providing competition for Nigeria's Interswitch which was established in 2002 and was the main platform used by businesses operating in Nigeria.


"We included Paystack as one of our payment options with no fanfare, without revealing to our clients, and within a month it shot up to the top most pre-owned payment option on the site," stated Akin Alabi, founder of NairabBET.


He stated NairaBET, the nation's second most significant sports betting company, now had 2 million routine clients on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment choice given that it was included in late 2017.


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


In December 2016, it raised $1.3 million from investors 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 regular monthly 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," stated Emmanuel Quartey, Paystack's head of development.


He stated an environment of developers had actually emerged around Paystack, developing software to incorporate the platform into sites. "We have seen a growth because neighborhood and they have carried us along," stated Quartey.


Paystack stated it makes it possible for payments for a number of wagering companies however likewise a wide variety of companies, from energy services to transfer 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 investor Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million last year.


FOREIGN INVESTMENT
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Shifts in Nigeria's payment culture have actually accompanied the arrival of foreign financiers wishing to take advantage of sports betting wagering.


Industry specialists say the sector produces about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where business is more developed.
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Russia's 1XBet and Slovakia's DOXXbet have both set up in Nigeria in the last 2 years while Italy's Goldbet led 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 split between shops and online but the ease of electronic payments, expense of running stores and capability for customers to prevent the stigma of gaming in public suggested online transactions would grow.


But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a store network, not least since numerous consumers still remain hesitant to spend online.


He said the business, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian wagering shops typically function as social centers where consumers can see soccer complimentary of charge while placing bets.


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


Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a television screen inside. He stated he started gambling 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," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)
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