Gaming and gambling are not new to Africa. There is no denying that land-based casinos gambling comprises a large portion of the market, but over the last few years, sports betting is increasingly rising in popularity. At the end of 2018, the industry was worth around $37 billion and is expected to continue to increase over the upcoming years.
The growth in mobile money services and rapid Internet penetration has created additional opportunities for digital inclusion, financial inclusion, and innovation, making Africa the leader in mobile growth. The proliferation of mobile led to a considerable expansion in mobile sports betting and other forms of online gambling to spread like wildfire through the continent, with 75% of all online bets in Africa places using mobile devices.
The State of Online Gaming in Africa
Africa has very mixed social and economic developments, but for numerous different reasons, Africa is very attractive for many online operators. Many of the countries offer near-term revenue potential for online sports betting operators and depending on the type of regulation of gaming legislation, grey and black market share could be drastically reduced.
With South Africa generating the most significant turnover due to the legally regulated online sports betting as well as necessary Internet and mobile infrastructure, in other countries like Kenya and Nigeria mobile betting has had the biggest expansion, moving from retail market towards the online market. Additionally, Uganda, Tanzania, Ghana, Senegal, the Democratic Republic of Congo are markets following along the sports betting popularization.
The most popular sport that Africans bet on is football. International competitions such as FIFA World Cup, African Cup of Nations, Euro or Copa America along with Premiership, Primera, Serie A, and UEFA Champions League are favourites among punters. Horse race betting, the national lottery outcome and the African sport of Juksei are other popular betting choices.
Regulation and Legislative
Being the first mobile-dominant continent for online sports betting is impressive enough on its own, but if equally astonishing is the fact that even though less experienced than their European counterparts, African regulators have an immense desire, maturity, and level of understanding and knowledge related to gaming and gambling issues problem gambling, sports and betting integrity. Additionally, they accept that technological advancements mean that prohibition of online gaming does not work because customers will always find a way to play.
Moreover, concerned that banning gambling may lead to even higher rates of money laundering and creating stronger links between gambling and crime, African regulators are interested in finding regulatory solutions that will protect both, the payers and the operators. And rather than just taking another jurisdiction’s laws and regulations and applying them as they are, Africans are keen to take the international best practices and adjust, interpret and adapt them in ways that work most effectively in and for their respective jurisdictions.
Alternative Payment Systems
One of the biggest challenges for online operators in Africa is the significant number of unbanked consumers. Thus, deposits and withdrawals need to be executed using various alternative payment methods. One of the most popular solutions comes with mobile payments – the ability to charge a payment directly from the player’s mobile phone bill. This method requires the player to have an account with a mobile operator that cooperates with the online operators.
Additionally, many operators use their retail business as an alternative means of payment, enabling players to deposit and withdraw money directly to their online account, or use vouchers. Again, with the help of the mobile network operators, players can place a bet using the voucher by sending an SMS message or making a call.
Another popular alternative payment solution besides mobile-payments and mobile wallets are cryptocurrencies, in particular, Bitcoin but the market share is still small. The continent has also many local online payment companies as Kpesa, Kopokopo, Pesapal, Jambopay, Ipay and Instantpay, Paypal, and even internationally recognized MyGate, Skrill and Sagepay are also allowed.
The trend of creating alternative payment solutions is actively taking over the iGaming industry, not only in Africa but also throughout Europe, USA and the rest of the world.
Is Africa the next new market?
The increased number of operators moving to Africa to expand their network and offer their online betting and gaming services to this new emerging market, only indicates that Africa might be the new big market for iGaming.
Europe remains fragmented, and with numerous different laws and jurisdictions supporting or banning online gaming, USA is slowly moving to legalised sports betting, leaving Africa to be a brand new market that is still working on its online gaming regulations, giving operators a lot of challenges but also room to navigate through the complicated landscape.
So will the fast development of online gaming and the steady implementation of regulatory law in Africa help Europe see the problems in the patchwork quilt nature of its online gaming regulation law? Can Europe find a way to legalize and regulate online sports betting and gaming across the continent before it loses its market share to Africa?