Africa has been in the news recently because 55 nations have ratified a pioneering free trade agreement.
As the African Continental Free Trade Agreement (AfCFTA), this revolutionary legislation is expected to create more trade opportunities across the globe while lifting millions from poverty in Africa.
As a result, multiple markets and industries in the region will benefit, including the burgeoning and highly promising iGaming industry. On the continent of Africa, Nigeria is the country with the greatest potential for casinos.
Nigeria’s iGaming Market Snapshot
Observing Nigeria’s online gambling activity and the existing legislation that underpins it is a bit of a juxtaposition, as in most international iGaming markets.
Among the best Nigerian casinos that online-casinos.com reviewed, you’ll find that a large number are international iGaming brands (such as 888 Casino and Betway).
Despite Nigerian law officially prohibiting online gambling, there is a common loophole that allows citizens to take part in offshore gaming to the fullest extent possible.
This process currently involves three primary government agencies: the Special Control Unit against Money Laundering (SCUML), the Nigerian Investment Promotion Commission (NIPC), and the National Office for Technology Acquisition and Promotion (NOTAP).
The Nigerian Gaming Commission and the Maltese Gaming Authority must approve all licensing applications for gaming operations in Nigeria, regardless of whether the businesses are based overseas and have accreditation from respected authorities.
There is no denying that these regulatory boundaries have conspired to create an increasingly competitive and demand-driven market in Nigeria, especially among younger players, particularly between the ages of 18 and 40.
A total of 60 million people within this influential demographic wager an average of £7 on sports betting every day, spending an estimated £4.1 million on the activity alone.
Over the five years between 2014 and 2019, gross casino gambling revenues more than doubled. Nigeria’s online casino gambling GGY reached £55.8 million by the end of last year, up from £27.8 million in 2014.
There are certainly advantages and challenges related to the relatively unregulated nature of Nigeria’s marketplace, and we’ll dwell on these later in this article.
Although it still has a long way to go, there is no doubt that this market has experienced significant growth in recent years, as it continues to mature and follow the same path as European, UK, and North American iGaming niches.
Africa’s Best Casinos: Nigerian Casinos
SBC Digital Summit Africa speakers have placed a heavy emphasis on how Nigerian casinos can grow in the future.
Taking a detailed look at every aspect of African iGaming, this online event ran between October 6th and 7th, with an emphasis on regulatory oversight and recent events from the industry.
Ahead of the conference, SBC asked its invited experts for their recommendations regarding which African nation offered the most attractive opportunities for online operators. According to 39% of respondents, Nigeria is the most promising market, which is perhaps not surprising given the brief statistics we discussed earlier.
There is no doubt that Nigeria and South Africa (which collectively accounted for 28% of the votes) will have a dominant influence in the future on both local and international markets.
Ghana and Kenya, the two countries with the fastest-growing economies, were ranked second and third, respectively, but received only 12% of the votes.
There is, of course, a question to be asked: why does the Nigerian market have more potential than any other African nation?
It seems that a variety of factors are at play here, with sports betting being one of the most significant, as well as the demand among young Nigerians for this vertical.
Nigerians are passionate about football, particularly the Manchester United and Liverpool teams who have played and still play in the country for decades. Boxing is also a popular sport in the country.
In Nigeria, some 70% of young adults are football fans, and so they’re betting regularly and wagering disproportionate sums (compared to their median salaries in the country).
Sports betting (and casino play to a lesser extent) is certainly a sacrifice Nigerians are willing to make. The average monthly income in Nigeria is just £242, but average bets can reach £22.58 in some verticals.
Some people may find this alarming, since it suggests that some gamblers are willing to spend nearly 10% of their monthly income on virtual games.
The iGaming market in Nigeria may choose to focus on this as it matures, but for now, it indicates that online verticals will be in high demand in the digital age.
In addition to this, Nigeria’s online gambling market continues to expand with each passing year, driving current and future growth potential.
Nigeria is expected to grow by more than 140 million smartphone users by the year 2025, largely because of the proliferation of mobile penetration.
Considering the current number of smartphone users in Nigeria, which is estimated at 25 to 40 million, this represents a huge and exponential growth.
Mobile penetration in Nigeria is still expected to grow robustly over the next five years and beyond, even though these statistics are difficult to quantify and predict. Many industries and companies will benefit from the growth of the smartphone market in the country, which is expected to triple by 2025.
The timing of this announcement could not have been better, as most international operators operating in Nigeria offer mobile sites that are responsive, as well as native mobile apps that may soon be available on iOS and Android devices.
Consequently, Nigeria will become the biggest and most promising iGaming market on the African continent between now and 2025, bringing about an exponential increase in the number of people who will be able to access online casinos and sportsbooks on a regular basis.
In the absence of regulated operators that meet this level of demand and provide high quality services, this level of demand and accessibility is meaningless.
Despite the large and fast-growing player demographics at their disposal, the Nigerian market also offers lots of potential for international players in its current form.
An additional estimate suggests that a betting company can generate up to 20 million Nigerian Nairas (£46,000) per month, but only spend between five and seven million Nairas (£11 to £15K) per month.
In most cases, this results in profit margins exceeding 300%, which are more than twice what mature international markets that face heftier taxes are projected to achieve.
It is clear from this study that the iGaming vertical market in Nigeria is in great demand, and global operators have the opportunity to meet that demand while optimizing their margins.
Moreover, smartphone penetration rates in Nigeria will increase markedly in the next five years, making Nigeria one of the most promising places for future growth.
Last Word — Nigeria’s Long-Term Future as an iGaming Market in Africa
As African industries and businesses strive to survive and thrive post-COVID-19, they are being pressured to embrace digitisation and cheaper energy sources.
All but one African member state is now a key participant and signatory to the African Continental Free Trade Agreement. In terms of the latter, it will undoubtedly be empowered by it.
With these events in mind, it is no doubt that the Nigerian authorities will prioritize the growth and regulation of the country’s iGaming market, to protect players nationally and facilitate the growth of domestic operators.
Over the course of the last few years, Nigeria has seen its economy expand at an average rate of 7% per annum, and the development of its iGaming market has also contributed to that growth.