SPECIAL REPORT: Let’s break down just how big betting has become in Nigeria  

by Mazi Emeka

In our special report this week, we look at the cultural force the gambling has become for a helpless citizenry.

Nigerians love their football. Local or international. Everyone knows that.

And in the past few years, they have been putting their monies where their mouths are.

In less than six years, Nigeria has witnessed a gigantic leap in the number of football viewing centers and an almost proportional number of sports betting shops that cater to the needs of thousands of fans willing to stack money on their favorite football club or team.

The country has become home to an increasing number of neo-modern betting (gaming) companies that are taking full advantage of the high internet penetration in Nigeria and its large population of young (and not-so young) people that are not just passionate about football but eager at the possibility of making millions from a small amount of money.

But betting is not limited to football only.

In 2015, punters placed their bets on the outcome of the Nigerian presidential elections. The outcome of the 2013 conclave, which saw the emergence of Pope Francis I after the resignation of his predecessor, was betted on. As the American election draws closer, punter will also be interested in betting on who will win the election.

In today’s world, everything can be gambled on.

How it works

“The whole system works on what we call odds -it’s like points. If two teams are playing the stronger team gets less point than the weaker team. If you’re banking on the weaker team, you’ll win more,” Adekunle Adeniji, Manager of Virtual games at Bet9ja and owner of several betting shops, explains to me.

Punters predict the outcome of a particular game, often stacking money on a particular event occurring during a march. Possible events to bet for in a game include: the final score, a draw, first to score, throw in, time of goal score, first to foul, amongst several other possible events in a game.

On the surface it appears to be a game of luck – almost like throwing a dice – but Adeniji points out that betting is all about skill and deep understanding of the game.

“It just all about prediction,” he says. “Before you can place a bet you must at least know the statistics of the team you are betting on.”

Correct predictions are rewarded with monetary winnings depending on the odds of the event predicted occurring in a game and the amount of money stacked. The odds are multiplied against the amount staked to arrive the prize money.

Dotun Ajegbile, the Managing Director of 1960bet, points out that betting “is actually, more or less, like a game of skill. You can’t predict when some punters will actually make money.”

While most seasoned punters and gamers agree that not all punters will actually make money from bets, earning money from football games is an opportunity most football enthusiasts cannot pass up.

Dotun Ajegbile, Managing Director 1960bet
Dotun Ajegbile, Managing Director 1960bet

The business of betting

Other forms of betting, like pool and lotto, have existed before the introduction of modern sports gaming as we know it. In a few years, sports gaming have successfully eclipsed all other forms of betting both in the amount of revenue generated and the number of people it attracts.

Betting companies, towing the line of their superiors in the west, have invested millions of dollar into the gaming sector and have set up infrastructures needed for gaming and an interesting affiliate/retail system that ensures that everyone, regardless of socioeconomic background and location, can have access to betting facilities.

Springing up in several locations within urban and rural communities are retail sports betting shops that serve as affiliates for betting companies – a sort of middlemen between the companies and punters.

“Somebody who owns a shop or is in the business should not play,” Adeniji says. “It’s just like you’re selling marijuana, you are not supposed to take out of it because you’ll end up taking all of it. Most shop owners end up losing their business because they want to play.”

Aided by the massive increase in internet penetration within Nigeria, punters can now eliminate the middlemen and place their bets directly on the website of companies. But Ajegbile says that even though the “online penetration has really helped the industry,” a vast majority of bets placed aren’t done online but through the retail outlets of the betting shops.

He estimated a ratio of 70:30 for offline (through retail shops) and online betting.

Who wants to be a millionaire?

And Ajibile sees nothing wrong in any of it, for an industry that he claims has employed over 10,000 Nigerians – and created millionaires, literally overnight.

“The industry is very profitable,” says Ajegbile. “What shape the economy is taking, betting will forever remain betting. If the economy is good, people place bets. If the economy is bad, people will always place bet.”

Breaking down the numbers, he estimates that about one thousand bets pass through the system of 1960bets every five minutes but at pike periods – which are usually an hour to the games – it could go up to 1,500 bets per minute, with the amount stacked ranging from a hundred naira to millions of naira.

Indeed, the News Agency of Nigeria (NAN), in 2014, estimated that about 60 million Nigerians bet over N1.4 billion daily. But as Ademola Adebajo, CEO of Stakersden, told Ventures Africa in 2015, punters stake about five billion naira daily.

Five billion.

Let that sink in.

Regulating the market

In Lagos, 10 million naira is the maximum possible win but outside of the state, the maximum is 50 million.

“For now very few states does serious regulation,” says the 1960Bet MD. “Very few states. Some states, especially in the east, gambling is not well regulated. The regulators are yet to get their acts right and it is really telling on the industry.”

He is quick to point out that regulation is not the anymore: “Some of us (betting companies) don’t want to work in an unregulated market because in an unregulated market everything goes.”

A regulated market checkmates gambling addiction by having companies monitor the betting pattern of punters and ensure that punters do not bring fraudulent money into the system.

A gigantic increase in the amount of money staked by a punter usually sets off alarm bells about addiction or fraudulently obtained funds, so betting companies are expected to monitor for unusual pattern and bring it to the attention of authorities and also ensure that persons less than the age of 18 do not gamble.

Also known as the Good Causes Fund, the Lagos State Lottery Distribution Fund (DTF) was set up by the Lagos state lottery board to administer “revenue generated from the gaming activities in the state.”

According to its website:

“The DTF is applied to projects in the environment, education, social and health, and infrastructure sectors of the economy. Projects executed with the fund are called “good causes projects” while taxes paid from lottery sales are known as good causes money.”

In 2015, parts of the DTF was used by the state government to purchase three helicopters, fifteen armored personnel carriers (APCs), two gunboats, 165 vehicles and others security equipment at a cost of N4.765 for the state police.

What the future holds

According to a PwC report, the gross gambling revenue in Nigeria is projected to grow at an annual rate of 8.5 percent to reach $69.9 million in 2019, making it the fastest growing sector in Nigeria. The report predicted that the industry will also outgrow the gambling industry in Kenya and South Africa.

This is not going away anytime soon, wherever you stand on the side of the argument about its merits.

“In the next three to five years, some of us are beginning to take the position of taking our companies public,” Ajegbile says with a confidence that can be unsettling. “Betting is very big, very, very big.”

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