1990s Gambling Legalisation: Time for a digital update?
In recent years, Nigeria has enjoyed a huge economic spurt due to the gambling market. The Nigerian Government generated a whopping ₦50 billion in revenue from gambling in 2019 following the legalization of certain types of gambling by the state in the late 1990s.
Formerly stigmatized by the population, gambling in Nigeria is now a leisure activity played by more than 36% per cent of the population. Given Nigeria is the world’s seventh most populated country, with more than 206 million people, that’s a lot of gambling!
The lottery, land-based casinos and sports betting are all legal, but roulette, dice games and non-skilled card games are considered illegal. Like many countries scrambling to catch up legally with the digital age, there is no specific provision in the law to regulate online gambling.
When it comes to online gambling, the pie is a big one if you’re looking for a slice of the action.
Annually Nigerians spend $2 Billion USD at online casinos, with the average player spending ₦3,000 ($7.30) a day.
So how do you go about setting up an online casino and/or sportsbook?
The first, and most important rule, is to do your research! Get to grips with the laws of the land when it comes to gambling and make sure you can obtain a license first and foremost before incurring any website and marketing costs; because if it all goes south or you change your mind, you won’t have lost too much money.
You’ll need to send in an application letter, a non-refundable deposit of ₦500,000 ($1100 USD) documented evidence of your business and so on. There are lots of law firms available to support this at a cost.
Marketing Part 1
At this point, you need to turn to a marketing strategy. Most other online advice will encourage you to check out software providers and turnkey solutions at this point, but there are some key marketing decisions to make before you decide on any of these or start thinking about marketing planning. Online Virtual Betting
Namely, who is your target market?
What sets you apart from other online casinos?
How are your products different and relevant to your target market?
What’s the competition like?
How do people pay online in Nigeria?
For instance, there’s no point in setting up an online casino for Nigerian players for an older audience and then branding it in a very westernised way, where everyone else is doing the same thing. You’re only going to get your share of what they’ve got.
The key to unlocking success is to hone in and understand your target market inside out. Draft a customer profile including ages, locality, average spend, like and dislike before spending another penny!
Because you’ve developed your target market, checked out the competition and understood what your customers want, the next step is a business plan.
This doesn’t need to be ultra granular when starting out but try to cost-out all of your set-up costs before spending money. Then work out your ongoing operating costs before calculating any additional ongoing support you might need.
Because you’ve worked out your target market, checked out the competition, and worked out your market position and share, you can now project an annual income target.
If the outgoings outstrip the incomings, you need to go back to the drawing board. Online Betting Platform
The quickest way to start your online casino is by using a turnkey provider. These are companies that specialize in all manner of support for your start-up, including software and technological support.
Think of it this way; the casino infrastructure and functionality has already been built; you just have to customise it and personalize it.
It’s important to point out that these are not the same as white-label casinos, which are off the shelf casinos ready to launch, including the licensing.
Progress Play is a great example of a turnkey solution for a white-label casino.
With turnkey solutions, you’ll still need to come up with a name, buy a web domain, design your website and make sure all the business documentation is sound.
All the technical stuff of playing slots from certain providers is already done for you.
It’s important to do your research before picking a turnkey provider, some of which is based on the gambling laws of your country. You may, for instance, need a Know Your Customer process, which some turnkey operators may not be able to provide.
Turnkey approaches are slower than white-label solutions, but they are a lot quicker and cheaper than starting from scratch and doing it all yourself.
Marketing Part 2
Once you’ve decided on a turnkey solution, it’s time to work out the best way for your customers to find you.
You need to plan your marketing with a budget in mind and the target audience you defined in the first place.
For instance, if your audience is 50 years and over, then advertising or creating a profile on Tik Tok wouldn’t be a go-to option given the younger demographic.
Choosing a communications channel that fits your profile is key here. Google Ads is a great option but can be expensive, and it’s a bit of a minefield for those who have never used it before. Facebook Ads are cheap and easy to use, but you need to check out the legality of advertising on them in the country you live in.
With so many online casinos available for people globally to choose from, combined with the number of turnkey operators out there, you can be 100% that it is your marketing that will be the key to unlocking your success.
If you did the research as part of Marketing Part 1, then how you find your market, what advertising approaches you undertake and your audiences locality will fall into place at this point.
Here’s a very quick breakdown of costs to help you on your way. These are handy guides and not a replacement for doing your own research given costs may differ depending on the popularity of domains and the turnkey operator chosen.
Domain name: ₦ 5000
Betting and Casino software: ₦ 2,644,003
Logo and Design: ₦ 1,586,402
Marketing Budget for first 12 months: ₦ 31,728,045
Identify the Nigerian Licensing costs: ₦ 500,000