Legislation on gaming will enhance Nigerian economy – Maikori

African sports betting and gaming is garnering much focus as operators look to extend services and competencies beyond western borders. Yahaya Maikori, senior partner of Law Allianz – a law firm with core expertise in African Entertainment law (gaming, technology, media & IP matters). In this interview, at ICE Excel Hall, the largest gaming conference in the world, Maikori, who has advised state governments, institutions and helped several companies establish as well as navigate issues involving licensing, taxation, issues regarding jurisdiction, online gaming in Nigeria’s growing gaming industry,  speaks on African gambling sector concerns. Excerpts:

There is a growing interest in African gambling/ gaming markets. What factors are driving this?

Put simply, many wide ranging factors account for the increased interest in the African gambling /gaming industry. I think the first will be the large youthful population, which provides new market opportunities for operators coming from matured or saturated markets. Secondly, increased mobile/internet access provides cheaper and safer means for operators to enter new markets without having to get down and dirty in those uncharted territories but for me the most important factor for the increase is the democratisation of contemporary cultures and sub cultures occasioned by the convergence of technology, hospitality, internet, entertainment and social media. A case in point is the role of football (premiership) in the explosion of sports betting industry – the premiership franchise has a cult following here in Africa, Nigeria is home to the 2nd largest fan base outside of the UK, so you can see how easy it is to migrate those fans from watching football to becoming active in the betting industry.

At present, which African jurisdictions do you feel offer the best market and growth opportunities for international operators?

Africa is largely an untapped market; almost all African countries depending on the operator offer opportunities of varying types. In terms of market size Nigeria has a population of 170million of which 65percent are below the age of 35 with less than 5percent involved in any kind of gambling activity.
Kenya (and most of East Africa) already has a gambling culture, cheap Internet access and an entrenched mobile commerce culture along with its population of 50 million makes it is a very attractive market, Ghana’s appetite for gambling is growing with a population of about 50 million. South Africa has the most matured market in Africa, new entrants may find it very competitive to establish a footprint there but then it is a structured market with robust legislation and supporting infrastructure etc. Rwanda is one of the smallest countries in terms of population (10million) it has in place a solid regulatory framework but we haven’t witnessed much investments or growth in that market yet.

Generally speaking, the Africa market is in its infancy compared to Europe but almost any country you choose has opportunities for growth depending on the size of your wallet.

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Africa is a huge continent to cover, with differing cultures, languages,  consumer habits mixed with other regional  intricacies, for operators looking to enter what factors and research do they have to consider and undertake?

As a lawyer, my first advice would be for potential investors to take a holistic look at the investment laws especially gambling laws in the concerned market; back in 2007 it was a nightmare advising my 1st client – for  a casino license, several agencies were contending as the rightful licensors/regulators, after our client commenced its normal operations it was a herculean task assisting them with regulatory compliance because of conflicting interpretation and gaps in the laws of different states/agencies of the federation. Some of the government agencies like the police, tax authorities already had a suspicious attitude towards the business, Seven years after some of those issues are now settled paving way for a degree of certainty in the industry but that was achieved at great cost to my client. Another issue that is worth taking a critical look at is the local culture and perception surrounding gambling in the interested market. Xenophobia might be another point though it exists in a subtle form, but to get a buy in from customers you need to partner with locals or make the locals the face of your business.
Acquisition may be a faster way of growing market share as that insulates you from some of the teething problems which an operator might be unaware of.

Can successful western igaming business practices and operations be transferred to the African market, or should operators start from the scratch and with a fresh perspective for Africa?

Again, it all depends on the company’s strategy, most of my clients especially the European operators do not want anything to do with retail. Unfortunately, the market does not currently favour igaming as a standalone strategy. Our markets are still predominantly retail driven with a bit of online gaming partly because of inadequate infrastructure or lack of enlightenment.

Surprisingly, the telcos which have been key drivers of ecommerce have been quite slow in coming to the party, they have not impacted on the industry as they have in others either because of a poor understanding of the industry or their inability to fit some of the products into their traditional commercial models, in recent times however, ‘gamification’ has become a buzz word, with this attitudinal change. I expect to see the telcos play a defining role in the industry.

How do you feel the African gambling markets will evolve in terms of consumer trends and technology impacts? What should operators be preparing for?

Well, Nigeria has an Internet penetration rate of about 20percent surpassing UK (ranked 8 globally for 3 years running), the government’s cashless society policy has given every bank account owner access to ATM cards; Kenya & South Africa have internet penetration of 14percent & 16percent respectively and I think all around Africa you will find similar growth rates. User-friendly smart phones are becoming cheaper and affordable by the day.

Konga, which is the largest online retail store in Nigeria says that 60percent orders are via the mobile device –  with this information as a background I believe that operators should be looking at simple mobile apps, low participation fees and easy payment solutions to capture and engage this huge mobile market– Nigeria has 121million mobile subscribers.

With regards to African market development, what topics and discussion should drive 2015 agenda. Where should market progress be focused on?

For me robust legislation especially online gaming regulation, harmonisation of relevant laws and industry specific tax needs to be put in place by most of these countries. I think there is a laisser-faire attitude towards regulation by most African states because of the unresolved moral question associated with gambling but as I have canvassed in different fora, the internet has made it impossible for that attitude. It’s either you regulate and protect your citizens as well as generate revenue for the state or you expose your citizens to irresponsible gaming and fraud from pirate/irresponsible operators.
It is a catch-22 for such states, but with increased budget deficits we shall see more jurisdictions resort to this industry to shore up their revenue.