Nigeria's booming Football Betting Industry

May 22, 2018|Aisha Salaudeen

Nigerians are crazy about football. And for some, that craze extends beyond watching the game – they stake money on it too. 

These days, football betting is as easy as hitting a few buttons on your phone. Lolu Lawson, a finance professional living in Lagos, grew from placing random office bets to full-blown online gambling. “I started betting four years ago. At first, it was the usual office banter where I agree to pay a colleague a certain amount if my desired football club loses or get the same amount from him if my club wins,” he explains.

At some point, restricting himself to betting with those around him made little sense. “After playing around with those type of bets, I moved straight to online sites that offered me wider options,” he adds.  


What do the numbers say? 

Nigeria's online gambling industry has flourished in recent years, adapting their brick-and-mortar presence to the internet scene, and spawning popular sites such as Bet9ja, Merry bet or Nairabet. Increased mobile and internet penetration and a young population willing to embrace technology have provided an excellent base to grow an online betting industry. 

However, it has proven difficult to quantify this growth or the scope of the industry. In 2014, the News Agency of Nigeria estimated that Nigerians spent ₦1.8 billion each day on sports betting, while some industry heads suggest this figure is closer to ₦5 billion. 

Meanwhile, a 2016 PwC report projected that the industry would grow at an annual rate of 16% each year to $147 million (₦45 billion) in 2019. While the numbers are disputed, the trend is clear; the same PwC report predicts that Nigeria's sports betting industry will outgrow those of Kenya and South Africa, Africa's largest betting environment. This comes as no surprise when you consider that Nigeria may have up to 180 million people and 90 million internet users.  


Young people and the mobile phones

This is not to say that the online betting industry has merely ridden on the back of the growth in Nigeria's internet-inclined youth. Rather, the industry has been incredibly nimble and flexible at ensuring that it continues to cater for the evolving demands of its target market. “Betting is important to me because of my desire for more. Knowing that I have many options on my phone or Laptop keeps me going back,” Mr Lawson reveals. 

Nigeria has over 50 betting sites, each offering a wide variety of services around football betting. From popular English Premier League games to the local Nigerian Premier League to obscure European leagues like the Gibraltar Premier Division and Lithuania A-League. There's always a game to pick out and wager on; online operators capitalise by improving the user experience on the sites and running campaigns to keep users coming back. 

Betting operators have also partnered with telecom companies to make their services even more accessible to mobile phone users. Premier Bet Lotto, a bookmarker affectionately known as ‘Baba Ijebu’, partnered with MTN to allow customers use shortcodes to access their lotteries. This strategy is in line with a broader shift towards extending banking services to people without stable internet access, significantly expanding the available market in a country where many people are still relatively poor. The trend has been further supported by mobile penetration

One group has played a pivotal role in industry's recent growth: the young middle-class. Increased interest from this ambitious and affluent group has squashed the cliché that sports betting is the preserve of the poor and desperate. Betters have been able to snag this group through aggressive marketing and expansion, in tandem with the notable platform upgrades previously mentioned. 


On the Psychology of betting

Nevertheless, there is no denying the aspirational nature of betting. Faced with dwindling economic prospects, young people – usually males – have turned to football betting for both entertainment and hope. They are not even deterred by the knowledge that the odds are stacked against them as betting algorithms are created to give the house an edge over a long sequence of bets.

So why do they still bet? 

Mr Lawson suggests the impulse stems from an insatiable desire for more. “I won’t stop betting even though I know that I am more likely to lose than win. For every win, I have at least 20 losses,” he says unrepentantly. “I don’t stop because, despite those losses, I know there’s a chance somewhere to win,” he tells me. 

Psychologists are familiar with this type of behaviour. Gambling activates the reward circuit in our brains by releasing substances like dopamine that make us feel good. In other words, gambling is a form of high – we keep doing it because it makes us feel very good.  

Interestingly, narrow misses have a similar effect on the brain, meaning that people who only marginally miss out on a bet are more likely to try again than those that miss out by a wide mark. This could explain why accumulator bets have become so popular; these bets group multiple outcomes together and a punter only wins money if all scenarios play out. Sometimes, the thrill of narrowly missing out on an accumulator is enough to entice the gambler to come back for another round.


Industry challenges

As the football betting industry has grown, it has faced its fair share of problems. One of these is the disputed security of online games, especially with the increasing use of electronic channels by sites. Many of these sites process a high volume of transactions, and it is essential that they ensure personal data is secure and free from cyber tapping. As the number of online punters increases, fraudsters have a larger pool of personal and financial information to access and mine. 

On another note, taxation remains a sore topic in the industry. What constitutes net gaming revenue or taxable income is unclear and inconsistent in Nigeria, which also impacts the withholding tax or value-added tax that can be charged by the government. 

Regulation has also struggled to keep up with the growth of the industry, leaving both customers and operators potentially exposed. This is a shame as international examples show that a well-regulated sports betting industry can be a significant revenue generator for the government. Nigeria remains a long way away from that, with ongoing issues are taxation and licenses holding back the industry.

It is unclear whether the gap in regulation correlates with Nigerians' outward conservative and religious attitudes. The stigma around betting has not stopped the industry from growing, but it may become more of an issue as operators attempt to expand and become more formal. The overall gambling market is small in Africa, and the continent may be behind the curve regarding attitude towards betting.   


A future of mergers?

However, the future of the online betting industry seems to be one filled with mergers and acquisitions. The National Lottery Regulatory Commission (NLRC) and the Lagos State Lotteries Board (LSLB) have issued over 100 licenses to betting sites, and the market may be filled with too many small players. Sports betting is an industry built on scale, and the current market structure makes the sector unsuitable for rapid growth. Market consolidation may be inevitable.  

Nigeria's betting industry is one of the fastest growing areas of the economy. With the rise in football affection and internet use, it's only going to keep growing. You would get very short odds betting on that. 


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