Tanzania’s online boom seen phasing out retail sports books

Africa has traditionally been a strong retail market, but in technologically advanced Tanzania the future is firmly online, with most sports book operators expected to phase out retail by 2025.

The rise of the internet

Unsurprisingly, the increase in online gaming is directly linked to the meteoric rise of internet usage across the country.

Tanzania’s internet user base has steadily grown from seven million in 2012 to over 45 million in 2022, out of a total population of about 63 million. The rise in domestic internet users means that gaming operators now have a much larger consumer base to target.

Converting this growing demographic of internet users to online gaming has been made easier since the widespread adoption of mobile money. 

Tanzania and its regional neighbours are in the top tier, globally, in relation to the highest per capita registered and active mobile money accounts and volume of mobile money. In September 2020 alone, a total of TZS 11.5 trillion was transacted via the six mobile money platforms of M-Pesa, Tigo Pesa, Airtel Money, Halo Pesa, Ezy Pesa and T-Pesa.

Part of the reason for this rise in internet adoption is the youth factor. Young people have been a key driver of new tech driven by the capabilities of the internet.

According to Businessinsider.com, Tanzania’s population is projected to reach 89 million by 2035 and is ranked as the 11th in the world in terms of youthful population. 

The young age of the population is reflected in the fact that sports betting is the most popular online betting product in Tanzania and according to a recent poll by Shikana Law, an impressive 89 percent of all sports bettors are between 18 and 34.

The power of sports betting

The growing popularity of online sports betting was plainly evident even pre-pandemic. As far back as 2019, out of the 20 licensed operators for online sports betting, only six were for retail sports betting.

Since Covid, which catalyzed the digital transition, this trend has continued and at a faster pace. This year Tanzanian GGR increased by 97 percent from the previous year to TZS 13.8 billion. As more operators continue to integrate online casino into their sportsbook platforms and more players become aware of these verticals.

Growing through regulation

One of the biggest risks to the future growth of online betting in Tanzania is tax regulation.

The 2021/2022 Tanzania national budget that was approved on the 24th of June 2021 introduced a controversial level of increased tariffs on mobile money transactions, which will have a direct impact on iGaming.

However, industry stakeholders still remain hopeful of a competitive market as the newly approved 2021/2022 Tanzania national budget also reduced the gaming tax on winnings from 20 percent to 15 percent. This will likely incentivise more people to place bets with hopes of a larger pay-out.

To further combat the potential negative impact of taxes, some operators have launched innovative promotional campaigns to help customers retain value through offering bonuses that either cover or are greater than taxes charged on winnings.

Retail death

All of the above-mentioned factors point strongly towards a long and continued growth for online gaming. As the young population continues to mature and become even more technologically advanced through the increased availability of cheap mobile phones and greater internet penetration levels, retail betting will continue to suffer.

Join SiGMA in Africa: Nairobi, Kenya Jan. 16th-19th, 2023

Next year our first foray into the African continent launches in Kenya, Nairobi. As part of our promise to make good on our commitment to bring more than just good business to the locations we operate in, we’re making sure our first stop for 2023 takes the time to spotlight projects at the heart of our charitable Foundation’s global mission.