Africa: Why now is the best time to invest online
The impact of COVID-19 has been felt all over the world. Fortunately, iGaming has been one of the few industry sectors to experience an upturn during this period. This unprecedented situation has been a wakeup call for many stakeholders in key African gaming market
Many regions in Africa are still heavily reliant on land-based channels and have of course seen a massive drop in revenue. There has been a clear mindset shift and for the first time on mass; governments, regulators, operators and players alike are now realising the true importance of online gaming and the pivotal role it plays in their future growth. This presents a fantastic investment opportunity for those hoping to expand their operations.
Over 80% of gambling GGR in Africa is still generated by the land-based/retail outlets. The almost crippling blow dealt by the COVID-19 lockdowns has caused a surge in online products such as online casino and virtual sports. Mobile data is getting cheaper every day, mobile gaming is gaining popularity in remote parts of Africa, 290 million people in North Africa use mobile phones. The additional revenue that these products can contribute to tax income has been a driving force behind regulatory change in key jurisdictions around sub-Saharan Africa. Creating brilliant growth opportunities for operators and providing the players with more choice and a better experience. This has been reflected by some of the recent changes we’ve seen in the following key regions:
Nigeria
Being the largest iGaming region in Africa, it’s no surprise that there’s been a relatively quick response from the authorities to actively work with and support key stakeholders in the iGaming market and ensure it’s survival. 79% of all sports bets in Africa are on football matches, so when all the major leagues closed the operators were hit hard. The National Lottery Commission have been quick to engage with the operators and attempt to address their needs in the best way possible. For example, they’ve requested that the government permit a 3-month tax break for all operators which is great news for the industry.
Also, operators have found it relatively easy to switch their platforms over to new products such as online casino and virtual sports as they don’t need to apply for an additional license to offer these products, saving them valuable time and resources. Speaking recently in a feature with iGamingfuture.com; Bashir Are, Chief Executive Officer of the Lagos State Lotteries Board mentioned that Lagos is “Open for business” and the Lagos State Government are currently laying down a fibre optic infrastructure so people can access fast internet at home. Any ISP will be able to plug in.
Another big step forward for this region is the forming of a Nigerian National Regulatory Association. Currently 22 out of 36 states in Nigeria have joined, working together to create a unified set of standards to operate by. Making it more attractive for investors who will have increased assurance that they will be operating in safe, regulated and competitive environments.
Ghana
Similar to the rest of Africa, most of Ghana’s GGR is generated from land-based casinos. Online platforms have mainly been used for sports betting only. Speaking recently, Gifty-Rita Amoah, Head of Legal for Ghana Gaming Commission said that since the pandemic hit she had observed a clear switch in objectives from operators. Most operators never even considered online platforms before but now they are really looking how they can successfully enter this market. Gifty went on to mention that “Many Ghanaian operators are actively looking for partners who can provide capital and the technology needed to make this transformation”.
The Commission has even allowed sportsbook operators to temporarily offer casino products online without needing a license. A clear indication of the priority online gaming is now taking in this jurisdiction. A fantastic opportunity for any potential partners hoping to enter this market.
The above examples are just an early insight into the transforming iGaming landscape in key African countries. Never before has the region been so pro-active about encouraging online platforms; both from a regulatory and infrastructure perspective. Coupled with the fact that Africa is the only region in the world where the youth population is increasing. By 2050 Africa’s young people, i.e., those aged between 0 and 24 years old, will increase by nearly 50 percent. Creating a massive opportunity for new technology adoption and online products in general. The biggest need in these regions, now, is to find the right partners to collaborate with who can invest the capital, technology or experience where necessary and help realise the brilliant potential of this burgeoning sector.
