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"The Nigerian Sports Betting Industry"

by Seymour Brownlee (2021-10-25)


A sports betting shop is in almost every neighborhood in Nigeria, arguably almost as ubiquitous as religious organizations. Some punters as they are described see betting as a potential serious steady flow of income and swear by it. While the others just do it for fun and see it as a way of closely following the sports they love which comes from analyzing the potential factors that can influence the outcome of a sports event.


Sports betting in Nigeria has moved on from the need to go to a shop and the emergence of online sports betting together with increasing mobile and internet penetration has transformed the industry into a multi-billion Naira industry. In 2019, ResearchAndMarkets.com estimated that there are roughly 60 Million Nigerians between the age of 18 and 40 actively involved in sports betting in Nigeria. They also reported the Nigerian sports betting market to be worth $2 Billion. However, it is important to note that these are just estimates as the industry is largely undocumented and betting companies aren’t required to produce financial statements. Alexa traffic ranking for 2020 showed that Bet9ja, an online sports betting site was the second most visited site in Nigeria after Google, this shows its huge popularity among Nigerians.


A likely factor in the huge popularity of sports betting is the unemployment rate in the country or more specifically, the youth unemployment rate. The unemployment rate reported by the National Bureau of Statistics for the fourth quarter of 2020 was 33.3%, 37.2% of people aged 25-34 were unemployed in the period. Some of these unemployed youth then view sports betting as an option to alleviate economic hardship, they also hear stories of lucky punters who made it big and believe their lucky break is coming soon no matter how many losses they incur in the interim.


Sports betting companies are now some of the biggest companies in the country, generating revenue and taxes for the Government, figures from the audited financial reports of the Lagos State Government shows that the state recorded ₦3 Billion as part of other revenue from non-exchange transactions which includes revenue from the Lagos State Lottery Board (LSLB). LSLB generates revenue from License fees, Levies, and Gaming taxes from lottery and sports betting operators. The CEO of the Lagos State Lotteries board said taxes on sports betting in Lagos state rose from 30 percent in 2016 to 40 percent in 2017.


Foreign companies don’t want to be left out of the lucrative Nigerian market and have made moves to enter the market in recent times. Betway, one of the most popular online betting platforms launched in Nigeria in 2018. Italian sports betting company Goldbet purchased a 50% stake in Bet9ja in 2015 to expand into the African continent. In 2020, South African TV Operator Multichoice acquired a 20% stake in Nigerian sports betting upstart Betking, the deal was worth $81 Million with a further $31 Million dependent on future performance. The CEO of Multichoice said the deal would boost future revenue of Multichoice as it would bring gamblers to its sports offerings, therefore, supporting the company’s bottom line. The increasing presence of foreign companies is positive for the Nigerian economy as it creates employment opportunities and generates revenue through taxes and levies. The innovation introduced by these companies raises the standard of performance in the industry and provides a diverse range of options for customers to choose from.


In foreign countries, the Sports betting companies are usually one of the biggest sponsors for the sports teams and leagues, betting companies see it as an easy way of positioning themselves in front of millions of sports fans while the clubs/league get revenue. In the English Premier league, for example, 17 clubs began the 2020-2021 season with a form of association with a betting brand. The shirt sponsor of West Ham was Betway, Burnley was LoveBet and Wolves was Manbetx, other clubs also had deals with betting brands such as sleeve deals and training kits. The only clubs exempted were Chelsea, Liverpool, and Sheffield United.


In Nigeria however, local clubs and the league initially couldn’t secure deals, but this has been changing recently. 1960Bet signed a shirt sponsorship deal with a Lagos-based football club Y.G FC in May 2020. The Nigerian Football Federation (NFF) and the Nigerian League Management Company (LMC) announced 1XBET as a partner in 2018. In 2017, Bet9ja signed a sponsorship deal with the second-highest professional soccer league in Nigeria, the Nigeria National League. Leveraging these companies to aid the development of the local football league in Nigeria would give a huge boost to the economy. It is well known that football is a huge sector that not only produces employment and revenue but has a multiplier effect on the economy.


The potential negative impact of sports betting can’t be ignored however, research shows that gambling addiction has negative financial and social effects. Gambling triggers the brain’s reward center and releases dopamine, a chemical that makes a person feel good, this causes an addict to want to seek that feeling over and over again and seeing that it is unlikely to consistently win soccer bets. This act of chasing wins causes financial losses and could lead to debt, another potential socio-economic effect is a crime as gambling addicts seek additional resources they don’t have to place bets to try and ‘recover losses’. Psychological effects include stress, anxiety, and depression.