Online Betting Firms Gamble on Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure

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

For many years, mobile payments stopped working to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have cultivated a culture of cashless payments.

Fear of electronic scams and sluggish web speeds have actually held Nigerian online consumers back however wagering companies states the new, quick digital payment systems underpinning their sites are altering attitudes towards online transactions.

"We have actually seen considerable growth in the variety of payment solutions that are available. All that is certainly changing the gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.

"The operators will go with whoever is much faster, whoever can connect to their platform with less concerns and glitches," he said, adding that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That growth has actually 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 licensed banks.

In 2016, there were 14 million web payments worth a total 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 almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising mobile phone use and falling information expenses, Nigeria has actually long been seen as a great chance for online businesses - once consumers feel comfy with electronic payments.

Online gambling companies say that is occurring, though reaching the 10s of millions of Nigerians without access to banking services remains a difficulty 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 introduced in Nigeria in January.

"There is a gradual 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 federal government as an enabler, has helped the organization to flourish. These technological shifts encouraged Betway to start running in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy whipped up by Nigeria's involvement worldwide Cup state they are discovering the payment systems developed by regional start-ups such as Paystack are proving popular online.

Paystack and another regional startup Flutterwave, both founded in 2016, are supplying competition for Nigeria's Interswitch which was set up in 2002 and was the main platform utilized by organizations running in Nigeria.

"We included Paystack as one of our payment options without any excitement, without announcing to our consumers, and within a month it soared to the primary most secondhand payment choice on the site," stated Akin Alabi, founder of NairabBET.

He stated NairaBET, the country's second most significant 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 considering that it was included in late 2017.

Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early phase funding in Silicon Valley's Y-Combinator program.

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

Paystack, based in the frenetic Ikeja district of Lagos, stated 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 said a community of designers had actually emerged around Paystack, developing software application to incorporate the platform into websites. "We have seen a growth because community and they have carried us along," said Quartey.

Paystack said it allows payments for a variety of sports betting firms however likewise a large range of organizations, from energy services to transfer business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program along with venture capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million last year.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have coincided with the arrival of foreign financiers hoping to take advantage of sports betting.

Industry specialists state the sector generates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the company is more developed.

Russia's 1XBet and Slovakia's DOXXbet have 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 company introduced in 2015.

NairaBET's Alabi said its sales were split between stores and online but the ease of electronic payments, expense of and capability for consumers to prevent the preconception of gaming in public meant online deals would grow.

But regardless 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 numerous customers still stay reluctant to spend online.

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

At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans collected to see Nigeria's final heat up 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 said he began gambling 3 months back and bets approximately 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; modifying by David Clarke)