In Nigeria, bettors are estimated to be spending about $2 billion a year on sports betting and further market growth is expected in Africa’s most populous country.
With about 201 million people, it’s the seventh-most populous country in the world and is also the world’s twentieth-largest economy. The International Monetary Fund predicts gross domestic product will grow by 3.2 percent this year, but it remains vulnerable to external shocks, such as rising food prices.
At present only sports betting, lottery, land-based casinos and skill-based games, such as poker are legal. Online casino games are unregulated, although Nigerians are thought to regularly access offshore sites.
In the past, gambling was a stigmatized activity; but now, it has become popular in Nigeria as a way of spending both time and money.
Speaking recently Dr. Rabiu Olowo, state Commissioner for Finance, said: “A lot has changed in the Nigerian gaming sector in the last 10 years. The industry has continued to expand and the future of gaming in Nigeria is bright, and I believe Lagos will benefit a lot from it.”
The tremendous growth in gaming activity seen in this country in recent years has been driven by the country-wide adoption of online gaming. This can be credited to the large youthful population with an average age of 18, affordable internet mostly accessed through smart phones and the love for sports, especially football.
The payment landscape that previously posed a challenge to operators is also transitioning with the influx of many payment service providers (PSPs) and the green light from the Central Bank to allow telecoms companies to introduce mobile money as part of its financial inclusion strategy. This is a key reason why many expect the sector to witness exponential growth in the coming years.
Game Changing Partnerships
Another factor fuelling the growth of the Nigerian market has been the widening of the customer base to include the middle class, breaking the stereotype that the betting sector only attracts low-income earners. The emergence of improved mobile penetration has helped to drive this trend even further. Recent statistics released by the Nigerian Communications Commission (NCC) indicate mobile penetration has increased from 36 percent to 50 percent over the last three years.
The rising adoption of mobile phones has been leveraged by the iGaming industry through key partnerships with telecoms and payments companies, making the movement of money accessible for everyone.
A good example of this in Nigeria can be seen with Premier Bet Lotto, popularly known as “Baba Ijebu”. The company partnered with telecoms company, MTN, enabling customers to access the lottery via shortcodes in SMS. So now players can play the lottery from the comfort of their mobile without having to visit any physical kiosks, which was seen as a major step forward for Nigerian iGaming.
Nigeria Moving Forward with Regulation
iGaming regulation in Nigeria is renowned for being vague and quite relaxed, which can put off potential partners or investors in this market. However, legislation is changing and hopefully will create greater confidence going forward.
At the national level, there are several regulations that are due within the next two years, including responsible gambling, software licensing, employee licensing, data protection, whistle-blowing and other policy guidelines.
Taxation has also proved an issue. In 2019, the Federal Inland Revenue Service (FIRS) announced a plan to implement an automated 5 percent value added tax (VAT) on all online betting transactions, although the plan was suspended after push back from operators. The FIRS argues that online betting is not included on a list of specific goods and services that are exempt from VAT.
There is still no uniform agreement on the applicability of VAT between the federal government agency and gaming operators across the country.There is concern that if this plan is implemented, that higher taxes will discourage players from using licensed operators and will create a boom in black-market gambling.
Although there are some hurdles that still need to be overcome in Nigeria, regarding legislation and changing public perception. The future still looks very promising for this market. Nigerians’ living standards are growing hand in hand with the economy, which means there are more people with enough money to engage in gambling.
The industry has been growing and is expected to rise even further as more online and mobile alternatives become available. Data shows that over 100 million Nigerians are connected online. As noted by Statista, Nigeria’s digital transition is thanks to mobiles rather than computers. By 2025, forecasts suggest that over 140 million people will be using smartphones in Nigeria.
Join us: 14 – 18 November 2022 MALTA
Being one of the first European countries to regulate the gaming sector, Malta is a hub of global business. The island is an obvious choice for SiGMA’s presence in Europe and a strong foundation for the field’s future. With a plethora of prospects for both investors and entrepreneurs looking to shape the future of this multi-billion dollar business, Malta Week will bring together industry giants among the affiliates, operators, and suppliers of the gaming sector. Our networking activities, including the extra cultural excursions, dinners, and networking drinks are solely open to Premium and Platinum ticket holders. Choose your ticket type here.
SiGMA – World Gaming Festival – SiGMA 2022: MFCC, Malta
SiGMA World is a leading platform for igaming, betting & esports industries. With a well-earned reputation for networking events.