• Thursday, March 28, 2024
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PWC spotlights growth trends in Nigerian gaming industry

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The gaming industry in Africa’s largest economy has continued to expand, benefitting from; the large and youthful population, improving internet penetration, and the increasing access to internet-enabled devices.

Sports betting have slowly emerged as a lucrative segment, leveraging Nigeria’s huge football culture.

Some of the big leagues, such as the English Premier league, and the Spanish La Liga, have millions of fans in the country – betting provides Nigerians the opportunity to earn from what they love.

Despite the temporary dip in economic activities in 2016, growth prospects are positive even as the economy rebounds, and income stabilizes.

Over the years, several indicators have been seen to have spurred the growth of the Nigerian gaming industry, according to a report by global consulting firm, Pricewatercoorpers.

An important aspect that has contributed to the rise in gaming industry has been the broadening of the customer base to include the young middle-class Nigerians, repealing the stereotype that the industry only succeeded in attracting the lower income earners.

This trend has been supported by improved mobile penetration- Data from Nigerian Communications Commission (NCC), shows that mobile penetration increased from 36 percent to 50 percent in the last three years, accorded to increased awareness through aggressive expansion and marketing by operators as well as technological improvements in payment platforms.

To some extent, the need for additional income in the face of the recent economic recession which has left a number of youth’s unemployed and underemployed has provided a boost to the base of gaming users – in particular, sports betting and lotteries.

According to a 2015 publication on Football betting in Nigeria, most bets are placed in bet shops while an increasing number of customers are placing bets online. In addition, Business Monitor International (BMI) research forecasts 182 million mobile subscribers in 2021, from the current 153 million. The expectation is that as the number of internet subscriber’s increase, so will the number of gaming users.

Another major indicator that has contributed to the of the Nigerian gaming industry is the influx of Foreign entrants .The gaming industry has started attracting foreign entrants, in particular, sports betting.

According to public sources, gaming content providers like Gameloft, Intralot and Sirplay have partnered with local gaming companies to participate in the growing success of the gaming industry by providing technology services and support. For instance, NaijaBillionaire has partnered with international platform providers like Lightmaker lotto who offer payment solutions and Indus Net Technologies who develop and provide technical support and digital content.

Partnerships have also become important in delivering a successful gaming experience. Telecommunication and payment companies are making gaming more accessible to mobile users. For example: in the lottery segment, the Premier Bet Lotto popularly known as “baba Ijebu”, has partnered with MTN, enabling consumers to access the lottery via short codes. Bet9ja has also recently formed a three year partnership worth NGN200 million with Nigerian National League to enhance the Nigerian League within the sports betting segment.

Also, the National Sports lottery (NSL) Plc, the organiser and sponsor of Lotto Nigeria, recently deployed 30,000 i8550 POS terminals for E-payment lottery. The i8550 supports all forms of bank cards, enabling the purchase of lotto tickets through its secure terminals.

In addition, betting companies are partnering with mobile payment platforms, to offer attractive bonuses on stakes, thus attracting more customers.

The have also been increased regulation to check mate the activities going in the industry.

On the state level, the Lagos State Lotteries Board (LSLB) has issued over 40 licenses to operators (LSLB, 2017). The board has started to implement measures to strengthen the regulatory framework through increased transparency.

These measures include providing and updating their data which includes operators whose licenses has been suspended. Other states are also realizing the revenue potential of the gaming industry and are taking a more aggressive role in regulating gaming activities.

For instance the Edo State Internal Revenue Service (EIRS), which regulates the activities of all gaming operators in the state, has instructed all operators to update their licenses and offset any outstanding tax liabilities. The EIRS also plans to list operators with active licenses in the near future (EIRS, 2017), in a move designed to reduce illegal gaming activities in the state.

At the Federal level, the National Lottery Regulatory Commission (NLRC) has also issued licenses to operators in the industry.

Currently, the overlap of regulatory functions between the state and the federal level is an issue, as operators are sometimes levied twice. This discourages entrants of new operators and future investment.

On the flip side, the sector has been faced with several challenges ranging from overlapping regulatory functions between the federal and state governments, higher taxation by fiscal authorities, cyber security, and foreign exchange issues, Ineffective management structures and poor corporate governance.

However, inspight of the above challenges, the future of the Nigerian gaming industry still show some positive insight. 

MICHAEL ANI