SBC News Voice of the Sports Betting Industry
Yahaya Maikori Senior Partner of Law Allianz will be presenting African market development at ICE 2016 focusing on opportunities in Nigeria, Kenya, Ghana & South Africa. Maikori details to SBC readers how these markets have progressed in 2015, and how consumers are developing new habits amid a fast growing and aggressive market place.
Maikori has advised state governments, institutions and helped several companies establish as well as navigate issues involving licensing, taxation, issues regarding jurisdiction, online gaming in Nigeria’s growing gaming industry.
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SBC: Hi Yahaya good to catch up ahead of ICE 2016. You will be presenting African market developments in Nigeria, Kenya, Ghana & South Africa. Coming into 2016 what current market trends and conditions have caught your eye?
Yahaya Maikori : There are several noticeable trends that are common to these countries. Mobile betting is on the increase and the reason is not farfetched when you consider the central role mobile phones play in our daily activities especially in Africa . Also so many institutions are now keen on tapping into the industry , they themselves have started to partner with operators in their desire to tap into the huge revenues associated with lottery and sports betting.
In South Africa and Kenya particularly mobile betting has taken off considerably because of their entrenched culture of mobile payments, in Nigeria however the telcos have become more innovative and some have started to deploy the USSD platform for SMS betting using airtime. The platform bridges issues associated with poor or expensive Internet bundles.
Lastly, we are starting to see municipalities and state governments embrace lottery in their revenue drive, while virtual games are increasingly becoming more popular amongst punters.
SBC: Nigeria, Kenya, Ghana & South Africa are four distinct markets, at present which country do you feel offers the best conditions for operators to do business?
YM: Africa is still largely an untapped market; almost all African countries depending on the operator offer opportunities of varying types. In terms of market size Nigeria has a population of 170million of which 65% are below the age of 35 with less than 5% involved in any kind of gambling activity.
Kenya (and most of East Africa) already has a gambling culture, cheap Internet access and an entrenched mobile commerce culture along with its population of 50million makes it is a very attractive market, Ghana’s appetite for gambling is growing with a population of about 50 million. South Africa’s market is the most matured market, new entrants may find it very competitive to establish a footprint there but then it is a structured market with robust legislation and supporting infrastructure etc. Rwanda is one of the smallest countries in terms of population (10million) it has in place a solid regulatory framework but we haven’t witnessed much investments or growth in that market yet.
Generally speaking the Africa market is in its infancy compared to Europe but almost any country you choose has opportunities for growth depending on the size of your wallet.
SBC: You detailed last year of the African Market’s youthful population. How is this audience being targeted and furthermore are any safeguard standards being implemented to ensure their protection within the market?
YM: Honestly this is one of the downsides of the growth of this industry; while it has caught on with our youth like an epidemic, the necessary safeguards have not been put in place. This is caused primarily as a result of the lackadaisical attitude by most jurisdictions to the concept of gaming. Unemployment also makes half – hearted enforcement of these safe guards a potential time bomb.
So Yes! This is a big challenge, while on a local level we have launched our responsible gaming DIY kits for operators, I believe that except where countries have decided on a total ban of the industry, they have a duty to properly legislate and ensure effective enforcement of responsible gaming to protect their youth.
SBC: Looking at international operators trying to do business within Africa, what common misconceptions do they place on the market. Are enough metrics researched when entering African markets?
YM: In the course of my engagement with most foreign operators I have discovered that their go to market strategy is premised on their own experiences and they are unwillingly to tinker their strategies, this has resulted in many failed operations.
One of the common mistakes by most of these companies is their wish to enter our markets without any retail strategy –- retail has to be an integral part of your strategy, where you are weak on retail partner with a company, which has local retail presence. Culturally we are still visually inclined and retail outlets have an experiential benefit for those who are in the lower income bracket.
Another mistake I see quite often is the desire for most companies who want to sell their software but come under the guise of investing – the truth is that we are inundated with all manner of software, what our local markets need are operators who have the technology, experience and the funds.
Technology as the sole business proposition offers no real value. From our observations most of the local companies that have grown have been beneficiaries of some impactful investment, which are usually from foreign companies. Also those who invested in local companies or partnered with locals have gotten better returns than those who started the operations from the scratch.
SBC: Bridging the gap between land based (retail) and digital betting operations, is a key agenda in western markets. Is this dynamic gaining traction within African markets, are operators beginning to think in multi-channel terms?
YM: Our market is more sophisticated than it is given credit for but again those channels seem like the obvious way to cater for this market but funding is the sole driver for the continuously exploring new customer base.
While most channels are been explored I believe that online marketing and customer acquisitions mechanism has not been optimized in Africa. Even in South Africa, which is ahead of the curve in terms of infrastructure – I haven’t seen a stand-alone online only operation yet. So it seems multiple channels are intrinsically an Africa strategy, we shall start to see the apps become dominant because of the availability of devices, which are increasingly becoming cheaper by the day.
Now that the industry is becoming more knowledge driven, operators are beginning to mine data to enable them effectively engage the various segments of the market.
SBC: Finally you will be introducing and dissecting African Markets at ICE 2016. What do you want delegates to take away from your session?
YM: There are several takeaways for those who are genuinely interested in our market. First of all our market consists of 52 different countries with thousands
of different cultures ,value systems and languages, though similar we each have our unique nuances which can make the difference between success or failure .so local relationships are a critical success factor.
In spite of the infrastructural deficit our youthful population are very savvy so you need to be innovative with your products ,Lastly when looking at our markets come with funding, technology and be ready to adapt your strategy to what works locally.
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Yahaya Maikori Senior Partner Law Allianz
