Nigeria’s betting industry surpassed the $2 billion threshold in 2020, with a large percentage of the country’s 18-45s spending almost $6 million on a daily basis. Based on industry forecasts, it is expected that the gambling industry will account for approximately 1.5-3% of Nigeria’s total GDP in the next few years.
Whilst these figures are certainly impressive, an important question remains: is Nigeria the uncontested champion of Africa’s betting industry? Let’s explore both the current situation, as well as the future prospects for Nigeria going forward.
Nigeria vs. South Africa
In terms of overall gambling revenue, the answer is simple: Nigeria is not the uncontested champion. For now, that title belongs to South Africa, where the country’s gambling revenue accounts for nearly 50% of the total regional output.
South Africa’s success can be partially attributed to the early introduction of online gambling, with a range of new iGaming operators frequently launching. This has given the industry giant a first-mover advantage of sorts, coupled with the long-standing presence of brick-and-mortar establishments.
Why Nigeria Can Challenge South Africa
Nigeria’s betting industry has experienced record-breaking growth in recent years, but it would be fair to say that the country’s potential is only just starting to see its full fruition.
As it stands, Nigeria sits second in overall gambling revenue. There are several key reasons why the industry can expect to challenge South Africa for the no. 1 spot:
Population Growth
Perhaps the primary reason Nigeria can expect to see growing revenue from the gambling industry is its rapid population growth. The country is currently the 6th-largest country on the planet by population.
But what is perhaps more significant is the nation’s birth rate and increased life expectancy. The United Nations expects that Nigeria will reach 375 million citizens within the next three decades. This figure would catapult the country to the fourth spot overall.
The influx of Foreign Investment and Partnerships
Recent years have attracted the investment of significant players in the worldwide gambling industry. For example, companies like Sirplay, Intralot, and Gameloft have all created partnerships with local iGaming providers in Nigeria. This translates not only to a fruitful financial investment but also increased expertise and access to improved technologies.
Further, NaijaBillionaire, a local big hitter in the casino industry, has partnered with Lightmaker Lotto and Indus Net Technologies to widen their access to payment solutions and digital content. These partnerships highlight how Nigeria’s gambling industry is making a concerted effort to become more than just a regional player.
Improved Regulatory System
What has perhaps driven the influx of foreign betting companies in Nigeria is the improved regulatory framework.
On the state level, for example, the Lagos State Lotteries Board (LSLB) has taken an active role in providing operators with the correct licenses. This strengthens transparency in the industry, as well as the tax revenue the country so sorely needs.
The state is not only issuing licenses but is also ensuring providers update any outdated paperwork and are pushing for payment of outstanding tax liabilities. With illegal gambling long having been a problem in Nigeria, these steps are eradicating room for these outfits, in addition to giving foreign investors peace of mind.
Middle-Class Nigerians
In Nigeria, there once existed a long-standing stereotype that gamblers only consist of low-income earners in the country. For the middle class, gambling was simply ‘not done’.
However, in recent years, the country has completely rejected this notion, significantly broadening the available customer base. Combined with cell phone penetration increasing to almost 50%, Nigerians on average are gambling a lot more compared to previous years.
Increase Internet Usage = More Users
Most bets in Nigeria are still placed in traditional betting shops. However, an increasing percentage of Internet users are now opting to bet online, a trend that is far more advanced in other countries, including South Africa.
Industry experts believe that the number of mobile subscribers with access to 4/5G will increase by at least 20% in the next three years. The reason this will have a big impact on revenue is that research has consistently shown that users will place more bets online compared to traditional shops. The convenience of placing a bet via a smartphone is an obvious driving factor.
The Nigerian gambling market already sits second in Africa, yet it is still early in its process of ascendancy. Considering the reasons outlined here, it is clear that the country is a challenger to South Africa’s current position at the top of the mountain.
