I’ve spent the last few weeks embroiled in Sports betting. I have joined over 30 telegram channels (some of which were paid for “VIP” groups), followed countless punters on Twitter, and joined so-called think tank WhatsApp groups for high stakes.
I have felt the excitement of getting a forecast right mixed with the accompanying regret of not taking more. I have felt the pain of not cutting my losses quickly enough and not letting my profits run. Trust me, I’ve also felt the pangs of despair while watching my hard-earned money disappear as numbers on a screen even as I did recovery arithmetic in my head regretting all foregone opportunities of the money.
I want my readers to believe I did it purely for research purposes, although a part of me really wanted a share of the millions of Naira I saw being won on social media daily. I guessed I was due for a lucky break in my finances and perhaps sports betting would just provide a legitimate avenue for that well-deserved lucky break.
READ: Investing & Gambling: Differences and Where They Intersect
I joined millions of Nigerians in funding this fast-growing multi-billion Naira industry that’s becoming a huge part of our economy. An industry whose major peculiarity is a relationship of mutual destruction between it and its staunch customers; an industry that lures its prospects with myths of huge payouts and whose realities are rarely spoken of. I joined the gambling industry- sports betting to be precise, and I gained an understanding of a business model for profitability which I’m eager to share.
The below six points are key to the growth of Nigeria’s betting industry that has seen it become one of the fastest-growing in the world of an estimated $443 billion industry and second in Africa behind South Africa.
Accessibility to the customers
The internet and proliferation of smart devices in Nigeria have opened the economy to a lot of markets, and the gaming industry is one of its biggest beneficiaries. Millions of Naira can be staked in real-time from a mobile device through an ever-expanding means of payment. One could literally make (or lose) a fortune from the comfort of his/her couch; a big leap from the days of having to look for a corner shop to tick bet slips before a cutoff time.
READ: Is online sports betting really profitable?
A robust support system
The peculiar nature of the industry where the bookies (betting companies) are viewed as the common enemy has a unifying effect on gamblers who band together across various forums, especially via social media, to offer a sense of community and support for themselves.
A major downside to gambling is loss, and its accompanying mental health issues- depression and loneliness. The gaming industry, while not having fully addressed this issue in Nigeria is a beneficiary of the aforementioned communities where strong ties amongst gamblers (customers of the Bookies) are maintained. These communities are also avenues to resolve complaints and bridge knowledge gaps about products, promos, and services.
READ: Economics of $2 billion Sports Betting Industry in Nigeria
Strategic Alliance
After years of being maligned by the Banks due to Money laundering and Terrorist Finance risks, the gaming industry has been able to step foot in the door and has formed alliances with Banks and Fintechs. A mutually profitable relationship that increases market share, visibility, and profitability for all concerned.
Capitalizing on Passion
Nigerians are passionate about football. We are a sports-loving Nation, quite right, but our passion is football. A sport that we consider part of our heritage, identity and pride, of which an average Nigerian believes he is more knowledgeable than the next person. The sports betting industry in Nigeria has always put its best foot forward by making it all about football. Their slogans invite Nigerians to test their knowledge of the sport, get rewarded for their passion, etc.
Their appeal is not to logic per se but to something deeper- our passion, our perceived identity. Passion/identity gambling accounts for a good percentage of customers who only bet on the team they support.
READ: How Nigeria’s sports betting industry is rapidly growing among teeming youth population
A profitable value chain
Every business is maintained by a value chain of distributors and retailers that help convey its goods to the consumer and bring feedback to the business. These distributors and retailers need to be adequately rewarded to ensure continuity of the main business. In the gaming industry, these distributors and retailers are the bet shops and punters who bring the games to the customers. The bet shops (or agents) earn a percent on the revenue they generate for the bookies while the Punters get paid directly from the purse of the gamblers who subscribe to their channels, with ranges of between N10,000 and N25,000 per month for VIP access. The Punters also get appreciation gifts based on the accuracy of their predictions. All these at no cost to the Bookies.
Advertisements and brand influencing
There was a time when gambling was viewed as anathema in the society and the preserve of “jobless old men” who spent all day analyzing odds on wooden benches at derelict buildings where responsible young folks should avoid. Nothing could be farther from the truth in this day and age when the daughter of a billionaire is a brand ambassador of a betting company, a member of the House of Representatives owns a betting company, legendary soccer, and music stars are affiliated with various bookies, and a betting company was the headline sponsor for the biggest TV show in the nation.
With targeted advertising and strategic brand influencing, the gaming industry has been able to launder its image, improve inclusivity across demographics, and silence moral inhibitions to its business. Needless to say, that bet shops no longer look derelict.
READ: Is sports betting gradually making Nigerian youths lazy?
While it is arguable that the growth of the gaming industry coincides with technology advancement in payment systems, rising unemployment, social media’s rising influence, outdated legislation, and the off chance of a pandemic, with an estimated 60million Nigerians actively involved in sports betting, and an estimated $2billion revenue, the sports betting industry in Nigeria is a viable business whose model needs to be studied in-depth and its strategies adopted.
