Due to the rise in internet penetration, the gaming industry has continued to expand, benefiting immensely from the large tech savvy population, and increasing access to internet-enabled smart devices. Sports betting has slowly emerged as a lucrative segment, leveraging Nigeria’s huge football culture.
Some of the big leagues, such as the English Premier league, and the Spanish La Liga, have millions of fans in the country so betting provides Nigerians the opportunity to earn from what they love and enjoy watching. However, there are immense opportunities yet untapped in this emerging industry.
The need for additional income in the face of the recent economic recession, which has left a number of youths either unemployed or underemployed, has provided a boost to the base of gaming users – in particular, sports betting and lotteries.
According to a 2015 publication on Football betting in Nigeria, most bets are placed in bet shops though an increasing number of customers are placing bets online. Lekan, a resident of Ikorodu who has been betting for some years said that although it is risky, it is also lucrative.
“Some days, you bet a huge amount on a game and you lose and some others, you spend N200 and win almost N300,000. There’s also the thrill of winning, so when you spend a paltry amount of money and you take home huge winnings, it’s like a lure. You keep going back for more.”
He admitted that he has spent over a million naira in the past one year on bets.
In 2016, the News Agency of Nigeria (NAN) reported that Nigerians spent ₦1.8 billion daily on betting; over 60 million Nigerians spend an average of ₦3,000 each on placing bets daily. An official in one of the betting companies opines that, “the Nigerian betting industry is large and ripe for harvest. Gone are the days when betting was frowned at. These days, it is providing employment and empowering young people.”
With the advent of technology and other modern betting firms such as Bet9ja and Nairabet, there is also an evolution and expansion of the clientele. Research has shown that lotto is now played across all ages. Technology has changed the entire landscape of Lotto business. Now, from the comfort of your house one can place bets It is also expected that mobile app developers will benefit from this emerging industry by building applications that will further enhance the betting business in the country.
But why have indigenous tech development companies shielded away from creating home-grown solutions for this billion-Naira industry? An ICT expert explained that Nigerian tech companies have the capacity to develop local technologies. “It is just that local innovators are not looking in that direction. All of them are focusing on fintech, no one is exploiting the opportunities in lottery technology.”
Gaming content providers like Gameloft, Intralot and Sirplay have partnered with local gaming companies to participate in the growing success of the gaming industry by providing technology services and support.
To further smoothen the gaming business in Nigeria, the National Sports lottery (NSL) Plc, the organiser and sponsor of Lotto Nigeria, recently deployed 30,000 i8550 POS terminals for E-payment lottery. The i8550 supports all forms of bank cards, enabling the purchase of lotto tickets through its secure terminals.
In addition, betting companies are partnering with mobile payment platforms, to offer attractive bonuses on stakes, thus attracting more customers. Some states have also come up with some far-reaching policies aimed at regulating the operations of gaming service providers and also generating revenue. Edo State Internal Revenue Service (EIRS), which regulates the activities of all gaming operators in the state, has instructed all operators to update their licenses and offset any outstanding tax liabilities.
However, there are some teething problems currently faced by operators of gaming centers in Nigeria.
- The overlap in the regulatory function between the Federal and state levels is a major challenge facing the industry in Nigeria. At state level, the necessary regulatory framework is set up to properly regulate and govern the gaming industry for effective transparency of betting operations. However, the National Lottery Regulatory Commission (NLRC) also regulates lottery activities in Nigeria leading to the operators being levied twice most times. This discourages entrance of new operators and future investments.
- Cyber criminals may compromise a platform by installing malicious software (malware) to gather information about players from within their account. This information could include cardholder data, login details, bank account details, betting history and other personal information. Also, a denial of service (DoS) attack could be carried out which could disrupt the performance of the gaming platform or even make it unavailable, leading to customer dissatisfaction, service downtime and loss of gaming revenue.
- A number of companies that make up the gaming space evolved from the old pool culture, and these businesses were managed with limited financial knowledge depending on the clientele base. Without good management structures or clearly defined strategies for the business, operators struggle to fulfill obligations, expand and attract foreign direct investment at the right price.
What does the future hold for the gaming industry.
Given the prospects of Nigeria’s gaming industry, there are opportunities for foreign technology companies and service providers to increase local presence through partnerships with Nigerian companies who can deliver different sections of the value chain. These services include provision of gaming software, sports feeds, odds, virtual games, managed IT services etc. This will help to create more jobs and build more a skilled workforce, leading to sustainable growth of the gaming industry.
Virtual Gaming is the future of gaming industry, This form of sports betting is a result of real-time data creating outcomes based on a computer algorithm in which consumers can place bets. Operators in Nigeria currently feature virtual games which allow Nigerians place bets both locally and internationally. This has proven effective, as during off-seasons in football leagues, customers could still place bets on virtual matches which still feature their favorite teams and players. Several other operators currently host this form of gaming on their websites.
Opportunities are huge in the gaming industry ranging from job creation for local developers, higher revenue for government and also another source of income for Nigerians. The future is definitely bright for the industry in Nigeria. The government has to enforce regulation and laws to moderate the industry. It also needs to create an enabling environment for operators to thrive.
Fikayo Owoeye writes for Nairametrics