African Gambling Is Upwardly Mobile
In the last few years the gambling industry has been mesmerized by the opportunities offered by Macau and Singapore and the newly regulated European Internet gambling markets. But in the two Asian jurisdictions there are no openings for new entrants and in Europe the Internet markets are highly competitive, highly taxed, and for start-ups the entry barriers are often insurmountable.
There are, however, other growth markets to be explored not least across the continent of Africa.
When Africa is mentioned, people usually conjure up pictures of civil strife, hunger or drought. Less often do people think of the African continent as an area of opportunity for gambling.
Nothing demonstrates the pace of this growth more than mobile phone revolution sweeping the continent. And this is the sector the gambling industry can use as an avenue to expand.
The continent is famous for its poor fixed line telephone infrastructure but the mobile phone industry is giving the continent the chance to catch up decades of under investment in infrastructure.
By the end of 2010 there were more than 500 million mobile subscribers in the whole of Africa and 175 mobile operators with live operations. About 60% of these mobile operators are somehow affiliated with the major international telecommunication groups such as Vodaphone, Airtel, MTN and Bharti.
The non-voice segment of the mobile industry is also taking off. African mobile operators make up to 19% of their revenues from mobile data services, and operators are receptive to ideas and investment to increase this part of their business.
3G mobile networks have been launched in more than half of all African countries, with rollouts in progress in many others. Subscribers to these services are already being offered internet banking and similar services, so gambling platforms should be able to perform. In the continent’s most advanced markets such South Africa, the North African countries, Kenya and Nigeria, m-commerce, mobile content applications and media have reached a level of development that is beginning to nurture mobile led advertising and marketing industry.
The African gambling market is not by any means a low hanging fruit. Gambling regulation is still in its infancy and mainly focused on the lottery and casino segments of the industry, South Africa being the exception. African spending per capita is still low, so mass is critical. Even if a series of new submarine cables on both East and West Africa have given the continent a good level of international connectivity and greatly expanded opportunities for data services, a substantial increase of data traffic could create bottlenecks and problems in connectivity.
Africa is not an easy continent in which to operate, with some African countries being riskier than others. But the gains to be made for those who move early are sizeable.