For a continent with a population of over a billion people, Africa’s gambling sector fails to pull its weight by comparison with other regions of the world and accounts for less than 2% of global interactive gambling revenues. But there have been pockets of development in different African markets over the last few years that suggest new opportunities are on the horizon. As elsewhere, however, when governments and gambling regulation are involved the path of progress is not always a smooth one.
South Africa is a good example of the slow progress of regulatory reform in interactive gambling. It has been more than ten years since the National Gambling Act was enacted in August 2004 containing provisions requiring the National Gambling Board to consider and eventually introduce legislation to regulate remote gambling.
At first, progress appeared to be being made. In September 2007 the National Gambling Amendment Bill, which was to license and regulate remote gambling, was approved by the Trade and Industry Committee of the National Assembly. Operators were lining up to take licences but the process then got mired in political delays and the bill never became law.
From a regulatory point of view, other African markets have been quicker to adopt internet gaming than South Africa. In Tanzania, for example, internet gambling has been legal since December 1999, by way of an amendment to the Gaming Act, although only fixed-odds wagering, sports betting, simulated games and lotteries were allowed.
It is interesting to note that the two language options for the Tanzanian-licensed iplay8 website are English and Chinese – a sign of the fact that much of Africa’s economic development is being spurred by investment from China, which brings with it large numbers of Chinese workers with some wages to spend.
For sports betting, M-BET and MeridianBet.co.tz are both licensed by the Gaming Board of Tanzania. The latter is owned by Gaming Africa (T) Ltd, which also has retail betting operations in the country. Both sites lead heavily on football betting, which is an indication of what local customers wish to bet on.
EAST AFRICA: KENYA, UGANDA, RWANDA
Tanzania is part of a cluster of east African countries that have internet gambling regulation in place, a cluster which comprises Kenya, Uganda and Rwanda.
Elite Bet is one operator that is present in both Kenya and Uganda, holding licences with the Betting Control and Licensing Board of Kenya (BCLB) and Uganda National Lotteries Board. It focuses on football betting and seeks to overcome the low internet usage and payment issues by running its service through mobile phones. Customers can place bets via SMS, while deposits are made by sending cash via mobile micro-financing service M-Pesa.
Nigeria, with a population of over 175 million people, has a very competitive and well-developed online betting and gaming market, centred around Lagos state (pop: 21 million). Most betting operators’ offerings are focused on football and virtual betting.
ESTABLISHING E-GAMING IN AFRICA
Several of the regulatory and operational developments outlined above have come about in the last five years, in step with developments in general economic growth, mobile technology and mobile payment services. The on-going growth and success of interactive gambling in African markets will depend upon the following factors:
Stability – it is clearly preferable to build up a business in a region that enjoys political and social stability. The threat of political upheaval, social unrest, or even outright war will discourage the private sector from investing in a market.
Urbanisation – associated with the growing, young population is the move to urbanisation in Africa. Increased population density makes it easier to target large numbers of people more efficiently. Urban areas tend to be better equipped with mains electricity, internet access, and mobile phone coverage so the process of urbanisation is beneficial for a more developed gambling sector.
AFRICAN I-GAMING STRATEGY SUMMARY
• A decision to establish an e-gaming business in Africa is taken with a long-term view
• Economic prosperity and growing disposable income are happening but are starting from a very low level
• Africa is not one homogenous market that can be targeted as a single entity
• A targeted approach is required for e-gaming, it will not be truly “mass market” for at least a decade
• In some instances a very targeted, almost 1-to-1 basis should be used to attract the wealthiest 10% in populations where wealth is very concentrated
• Specific market segments within heavily urbanised areas should be targeted where there is greatest access to mobile phone and internet services
“Expanding into Africa isn’t a cheap decision. You have to do your homework and do the exploration and investigation into the country. East Africa is an easier launching pad than west Africa as most of east Africa is English speaking.”
This article was first written for Gambling Insider by GBGC’s Research Director Lorien Pilling. A copy of the original article can be found here: GBGC Africa An emerging gamble GI