bet9ja.com
By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is growing in soccer-mad Nigeria largely thanks to payment systems developed by homegrown technology companies that are beginning to make online businesses more feasible.

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

Fear of electronic fraud and sluggish internet speeds have held Nigerian online consumers back but sports betting companies says the brand-new, quick digital payment systems underpinning their sites are altering attitudes towards online transactions.

“We have seen considerable growth in the variety of payment services that are readily available. 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 opt for whoever is quicker, whoever can connect to their platform with less problems and problems,” he said, including that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That development has been matched by an increase 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 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 almost 10 million worth 61 billion.

With a young population of almost 190 million, increasing smart phone usage and falling data expenses, Nigeria has actually long been seen as an excellent opportunity for online organizations - once consumers feel comfortable with electronic payments.

Online sports betting companies say that is taking place, though reaching the tens of millions of Nigerians without access to banking services stays a challenge for pure online retailers.

British online wagering firm Betway opened its very first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.

“There is a gradual shift to online now, that is where the industry is going,” Betway’s Nigeria manager Lere Awokoya said.

“The development in the variety of fintechs, and the federal government as an enabler, has helped business to prosper. These technological shifts motivated Betway to start operating in Nigeria,” he stated.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy whipped up by in the World Cup say they are finding the payment systems created by local startups such as Paystack are proving popular online.

Paystack and another regional start-up Flutterwave, both established in 2016, are offering competitors for Nigeria’s Interswitch which was established in 2002 and was the primary platform used by organizations operating in Nigeria.

“We included Paystack as one of our payment alternatives without any excitement, without announcing to our consumers, and within a month it soared to the primary most secondhand payment alternative on the site,” said Akin Alabi, founder of NairabBET.

He said NairaBET, the country’s second greatest wagering company, now had 2 million routine clients on its site, 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 got early phase financing in Silicon Valley’s Y-Combinator programme.

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 variety of month-to-month transactions it processed rose 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 each and every single month,” stated Emmanuel Quartey, Paystack’s head of development.

He said a community of designers had actually emerged around Paystack, producing software application to integrate the platform into sites. “We have actually seen a development in that community and they have actually carried us along,” said Quartey.

Paystack said it allows payments for a number of sports betting companies however also a large range of companies, from energy services to transport 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 investor 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 wishing to use sports betting wagering.

Industry experts say the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the business 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 led the trend, taking a half stake in market leader Bet9ja when the Nigerian company launched in 2015.

NairaBET’s Alabi stated its sales were split between stores and online but the ease of electronic payments, cost of running shops and ability for consumers to prevent the stigma of sports betting in public implied online deals would grow.

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

He said the business, with about 60 percent of Nigeria’s sports betting wagering market, had a comprehensive network. Nigerian sports betting shops often act as social centers where clients can enjoy soccer totally free of charge while putting bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to view Nigeria’s last warm up video game before the World Cup.
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Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a TV screen inside. He stated he started sports betting three months back and bets as much as 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,” said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos