Susan O’Leary, CEO of Alderney eGambling, discusses the opportunities and challenges Africa presents iGaming operators and suppliers, and what they need to do for successful market entry
Africa has the potential to be one of the largest legal online gambling markets in the world. The majority of the 54 countries that make up the continent are moving towards regulation with commitment and determination. Several are on the cusp of deploying frameworks imminently, while in the likes of Nigeria, Kenya and Ghana land-based and online gambling is already permitted in some form or other.
Africa is unique in that it has a young population with an appetite for gambling, high levels of smartphone penetration and a financial system and economy that is mobile driven. This is solid ground for online gambling operators and suppliers, so long as they can enter the market in the right way. That said, the continent provides several big challenges that first need to be overcome.
It is a market that can be navigated, so long as operators and suppliers are aware of these challenges and seek the right support and guidance to make it through to the other side.
The population of Africa stands at 1.2 billion making it one of the largest untapped iGaming markets in the world. In comparison, the USA has a population of 325 million. Africa has a young population – on average across the continent, 68% of a country’s population is below the age of 27 – that has embraced mobile technology. Smartphone penetration is around 43% across Africa but in Kenya is upwards of 90%.
In short, the continent has jumped the desktop stage and gone straight to mobile. Operators and suppliers in mature markets such as Europe have spent the past few years fine-tuning their mobile propositions and products as players continue to migrate from desktop to play on smartphones and tablets. They are now in a position to offer players in Africa a world-class mobile gambling experience.
What’s more, there is an appetite for gambling in countries across the region. According to a 2017 GeoPoll survey, 76% of people aged between 17-35 in Kenya had gambled – in Uganda, that number is 57% and in Ghana it is 42%. As populations continue to rise, the number of people wagering will grow in line with it, providing operators with an ever-expanding market of willing participants.
Of course, in order to leverage these opportunities a number of challenges need to be cleared. Some of these apply to all pre-regulated markets, and some are specific to Africa. This is true when it comes to banking – a high percentage of the population banks via mobile and without holding a bank account. MPESA is one of the leading mobile money transfer providers, and accounts for more than 50% of all transactions in Kenya.
Online operators already live in the region have had to adapt their payment wallets to meet these needs; brands such as Betway, Betin, Mlotto and SportPesa are among those offering mobile, USSD and online payments to their customers. Bitcoin and other cryptocurrencies are also becoming increasingly popular in African markets, particularly when it comes to online gambling.
On the topic of finance, operators and suppliers also need to consider their own banking options, particularly for repatriating funds. International gambling businesses need to move funds from one account in one country to another account in another country on a regular basis; this is usually a straight-forward process, but some financial institutions have different processes and impose certain limits.
Operators also need to obtain a clear view of player preferences in the country they are looking to enter. Sports betting is the most popular gambling activity across Africa – the same GeoPoll survey found that 79% of Kenyan youths bet on football – but pool betting jackpots and virtual sports have a strong fanbase, too. Some states also allow lottery games and casino. It is usually the case that player preferences differ from market to market.
How to enter the market:
It is imperative to assess the local requirements in each relevant country. Working with local partners will help to navigate market-specific hurdles and obstacles as well as to assess the legal and licensing framework.
It is also helpful to obtain a licence from a trusted, established regulatory body such as the Alderney Gambling Control Commission (AGCC) to utilise best practice and international standards. The AGCC will also help you understand the banking systems in place and to ensure AML and CTF protocols are stringent and, most importantly, sufficient to protect your customers and your business.
The AGCC has spent a long time forging relationships and partnerships with key representatives from African governments, regulatory bodies, banks as well as local operators and suppliers. We understand the market and the direction it is travelling in. This insight means we can guide our licensees through the process while ensuring they are meeting internationally recognised standards as they prepare for launch.
Africa is quickly moving towards widespread regulation, and only those that enter the market with the necessary approvals and licences will be able to capitalise on the opportunity in the long-run.
This article first appeared in the October 2018 issue of iGaming Times, page 42.