Why Nigerian online casinos have the greatest potential in Africa
The continent of Africa has been in the news of late, after a ground-breaking free trade agreement was struck between 55 nations who has previously deposited their instruments of ratification.
Known colloquially as the African Continental Free Trade Agreement (AfCFTA), this revolutionary piece of legislation has the potential to lift millions out of poverty on the continent of Africa, while simultaneously creating increased trading opportunities across the globe.
This will have a positive impact on various markets and industries, including the region’s burgeoning and highly promising iGaming sector. But why do casinos in Nigeria have the greatest potential on the continent of Africa?
A Snapshot of the iGaming Market in Nigeria
Like most international iGaming markets, there’s something of a juxtaposition when appraising online gambling activity in Nigeria and the existing legislation that underpins this.
The best Nigerian casinos have been reviewed by online-casinos.com, and you’ll notice that the overwhelming majority of these (such as Betway and 888 Casino) are international iGaming brands.
The reason for this is both simple and familiar; as while Nigerian law officially outlaws the practice of online gambling, there’s a common loophole which allows citizens to participate fully in offshore gameplay.
At present, there are three primary bodies responsible for licensing this activity; namely the Nigerian Investment Promotion Commission (NIPC), the Special Control Unit against Money Laundering (SCUML) and the National Office for Technology Acquisition and Promotion (NOTAP).
These entities must approve all licensing applications in the Nigerian marketplace, even those that are based overseas and may boast accreditation from respected authorities such as the UKGC and the Maltese Gaming Authority.
Overall, these regulatory boundaries have somehow conspired to create a fast-growing and demand-driven marketplace in Nigeria, particularly amongst younger players between the ages of 18 and 40.
More specifically, more than 60 million people within the influential demographic spend an estimated £4.1 million on sports betting alone every single day, with the average wager equating to £7.
In total, the statistics also show that gross casino gambling revenue more than doubled in size in the five years between 2014 and 2019. In fact, Nigeria’s total GGY for online casino gambling in 2014 was £27.8 million, but this number had increased to an impressive £55.8 million at the end of last year.
Of course, the relative lack of regulation in the marketplace creates both advantages and challenges for operators in Nigeria, and we’ll touch a little more on these later in the piece.
In the meantime, however, there’s absolutely no doubt that this market has enjoyed significant growth in recent times, as it continues to mature and follow the path previously trodden by the iGaming niches in Europe, the UK and North America.
Why Nigerian Casinos Boast the Greatest Potential in Africa
The growth and future potential of Nigerian casinos has been a significant focus recently, particularly amongst expert speakers at the recent SBC Digital Summit Africa virtual conference.
This popular online event, which ran between October 6th and 7th, took an in-depth look at every single aspect of the iGaming industry in Africa, based on some of the most recent events and the growing emphasis on increasing regulatory scrutiny.
Even before the event, the organisers SBC asked its invited experts to suggest which African nation offered to best prospects for online operators. Perhaps unsurprisingly given the statistics we discussed briefly above, Nigeria came out on top of this list, with 31% of respondents ranking this as the most promising marketplace.
Interestingly, Nigeria ranked just above South Africa (which claimed 28% of the vote), with these two regions poised to dominate the market and become influential beacons for both domestic and international operators in the future.
To put this result into context, the burgeoning markets in Ghana and Kenya were the next highest ranked in the poll, but these entities were only able to command 12% of the vote each.
The question that remains, of course, is why the Nigerian marketplace and its casinos offer the most potential of any other Africa country?
In fact, there are several factors at play here, with one of the most important being the prominence of sports betting and the demand that exists for this vertical amongst younger Nigerian citizens.
Make no mistake; football and boxing are the two most popular sports in Nigeria, with the former particularly appealing due to the enduring popularity of international soccer teams such as Manchester United and Liverpool in the region.
To put this into perspective, an estimated 70% of Nigerian youths are fanatics when it comes to football, and this is translating into regular betting and a disproportionate average wager size (in relation to the median salary for young adults in the country).
The statistics certainly suggests that Nigerians are willing to make surprising sacrifices to wagers on sports (and to a lesser extent, casino gameplay). In some verticals, for example, average bets can be as high as £22.58, despite the fact that the average monthly income across all demographics in Nigeria is just £242.
Of course, this may be alarming to some, as it suggests that some punters are willing to wager nearly 10% of their monthly income on virtual gambling.
While this may be something that regulators and responsible gambling organisations choose to focus on as the iGaming market continues to mature in Nigeria, however, for now it hints at a strong and sustained demand for online verticals in the digital age.
This continues to drive current and future growth potential in Nigeria, as does the fact that the country’s online gambling markets continue to become more accessible with every passing year.
This is thanks largely to the proliferation of mobile penetration in the country of Nigeria, with the number of smartphone users here forecast to grow by more than 140 million by the year 2025.
This represents huge and exponential growth, especially when you consider that the current number of smartphone users in Nigeria is expected to be between 25 and 40 million.
Although these statistics are hard to quantify and difficult to predict with accuracy, it’s clear that there remains a robust growth outlook for mobile penetration in Nigeria over the course of the next five years and beyond. In fact, it’s likely that the country’s smartphone market will more than triple in size by 2025, offering a huge opportunity for a raft of industries and individual companies.
This could not come at a better time, as most of the international operators active in Nigeria boast responsive mobile sites and (in a growing number of instances) native apps that have been specifically designed for iOS and Android platforms.
As a result of this, the number of people that will be able to access online casinos and sportsbooks on a regular basis will continue to increase exponentially between now and 2025 at least, establishing Nigeria as the biggest and most promising iGaming market on the whole of the African continent.
Of course, this level of demand and accessibility means little without the presence of regulated operators, who are able to meet this effectively and provide a high quality of immersive services.
Fortunately, the Nigerian market also offers huge potential to international operators in its current form, and not only because of the large and fast-growing player demographics that are at their disposal.
Additionally, it’s estimated that a betting company can generated a staggering 20 million Nigerian Naira (or £46,000) per month, whilst only spending between 5 and 7 million Naira (£11 to £15K) during the same period.
This translates into a profit margin of more than 300% in most instances, with this considerably higher than the projections from mature international markets that are faced with more substantial tax levies.
There are several takeaways here, but what’s ultimately clear is that there remains both an incredible demand for iGaming verticals in Nigeria and a growing opportunity for global operators to fulfil this while simultaneously optimising their profit margins.
With smartphone penetrations rates in Nigeria also set to increase markedly in the next five years, the potential for future growth here remains higher than in any other or neighbouring African state.
The Last Word – The Long-term Future for Nigeria as Africa’s Main iGaming Market
There’s a growing pressure of African industries and businesses to embrace both digitisation and cheaper energy sources if it’s to adapt and thrive post Covid-19.
In terms of the former, this will undoubtedly be empowered by the aforementioned African Continental Free Trade Agreement, which now features all but one African member state as a key participant and signatory.
As a knock-on effect of these events, there’s no doubt that the relevant authorities in Nigeria will look to prioritise the growth and regulation of the nation’s iGaming market, with a view to both safeguarding players nationwide and enabling domestic operators to thrive online.
From a wider perspective, the development of the nation’s iGaming market will also help to boost government revenues and the recent economic growth in Nigeria, which has expanded at an average rate of 7% per annum over the course of the last few years.