Nigeria’s sports betting and online casino operators benefit from cheaper online payment technology, which ultimately leads to an online gambling increase, new research shows. Nigerians have, quite surprisingly, been rath slow accepting digital payments compared to other African countries, like Kenya. The biggest problems are often said to be concerns about fraud and slow Internet speed. But now payment systems developed by domestic technology companies help operators of games and other online businesses.
The Lagos State Lottery Council, have stated they they see a significant increase in the number of payment solutions available on the Nigerian market. And all of that clearly changed the playing rules. Operators offering betting on sports and online casino in Nigeria, will surely join someone faster, who could connect to their platform with fewer problems and failures. And at the same time offer a secure payment solution to the players.
Online payment start-ups in Nigeria
Online games are not specifically regulated in Nigeria, and it has long been considered a potentially lucrative market for online Nigerian bookmakers and online casinos. After the first wave of international companies taking on gambling Naijans, the recent increase is due to domestic online gambling operators and payment providers.
Among the new payment systems created, there are several local launches and start ups, such as Paystack and Flutterwave, which provide long standing Interswitch some fierce competition. Interswitch, once a Nigerian start-up created in 2002, has so far been more or less the only platform used by online casino companies operating in Nigeria. NairaBET has stated that they just added Paystack as a payment solution without any marketing and without informing the customers, and one month later Paystack went to the most widely used payment option on the site.
Rapid increase in online payments
NairaBET, Nigeria’s second largest betting company, now has 2 million loyal customers on its site, up from 500,000 in 2013, and Paystack was the most well-liked payment option after it was added in late 2017. So far, the sales figures have been divided between traditional betting shops and online sports betting and casino, but it is expected that the growth of electronic payments and the cost of running stores will make online transactions grow. And already, data from the Inter-Bank Settlement System in Nigeria, owned by the central bank and licensed banks, show a significant increase in the volume of Internet payments.
In 2017, 29 million transactions equaling 185 billion naira, were done. Compared to 14 million transactions of 132 billion in 2016. 2018 has started strong – 10 million transactions with a turnover of ₦61 billion. No doubt online payments are here to stay in Nigeria, which has attracted international companies once again. British online betting and casino company Betway began operating in Nigeria in January.
When Betway started operating the Nigerian online betting and casino market they said that wanted to catch the gradual transition to online, as it is clear that that is where the industry is going. They also stated that the uprise in fintech companies in Nigeria played its part along with an active government enabling such companies to grow. According to Betway these two reasons and others were contributing for entering the Nigerian gambling market in 2018.
Online casinos utilising online payments
Others also showed interest in the country, Russian 1XBet and Slovakian DOXXbet were launched in Nigeria over the last two years, while Italy’s Goldbet took 50 percent of the market-leading Bet9ja in 2015. Industry experts said that this sector generates about NGN 360+ billion a year and is likely to grow faster than in South Africa and Kenya.
Despite the potential for betting and casino operators in Nigeria, which has a relatively young population, problems remain, including the fact that tens of millions of Nigerians do not have access to banking services. Why we can expect the brick and mortar stores to continue in operation for some years to come.