The Nigerian gambling industry’s rise has taken global iGaming experts and stakeholders by surprise. Its meteoric rise is majorly attributed to the country’s young population with 41% of the country aged between 14 and under. This significant chunk of the young population has given rise of gambling practices and betting in the region, and it’s only expected to rise exponentially in the coming few years.
If we talk numbers, H2 Gambling Capital forecasts the gross gaming revenue in the country to €675.1m by 2025, according to the Economist. The question here is, even with the legal battles over gambling regulations, how is Nigeria leading this monumental growth in iGaming?
According to Olabimpe Akingba, a legal practitioner in Nigeria with over a decade of experience in iGaming and a former executive secretary at Association of Nigerian Bookmakers, technology is the primary reason behind the growth of the Nigerian gambling market coupled with internet penetration.
“The growth of technology has contributed immensely to the development of the Nigeria gaming market. Now we see a lot of competition in the igaming space, which has also shaped the industry,” said Akingba.
Brewing a Perfect Storm for Online Gambling in Nigeria Driven by Technology
As mentioned by Olabimpe Akingba, technology and internet penetration in the Nigerian population is the primary driver of gambling industry growth in the country. Let’s break it down bit by bit what technological developments are at the heart of this surge.
Mobile Technology
Penetration of Smartphones in Young Population: Smartphones are easily accessible for the young population of Nigeria, and high-speed, affordable internet has made online gambling easily accessible for them.
Mobile Money Accounts: Mobile payments options like eWallets like Skrill, Neteller, EcoPayz, and Mobile Money Services allow gamblers to transfer money to an online casino or betting website using their phone’s balance bypassing the need for a bank account.
Advanced Technologies
Artificial Intelligence (AI): AI has revolutionized the gambling industry across the world and the Nigerian gambling market is no exception. By implementing AI in online casinos, online betting, and poker, gambling operators are able to personalize user experience, recommend relevant games, and even identify problematic gambling behavior. This has led to more absorption and acceptance of gambling in the Nigerian society and the subsequent rise of gambling industry in Nigeria.
Virtual Reality (VR) & Augmented Reality (AR): AR & VR technologies bring more gamblers to gambling operators, by building more engaging and immersive experiences for players. A leading casino operator in Nigeria PremierBet has launched its virtual casino on its mobile app to deliver life-like gambling experience right to their phones.
Big Data & Analytics
Fraud Detection: Advanced algorithm to identify fraudulent users on iGaming platforms, protect both players and operators. Using these algorithms, operators can block suspicious transactions before funds are lost, suspend fraudulent accounts, and ensure integrity of the game ensuring fair play.
Personalized Marketing: Using data for player behavior analysis, gambling operators can offer personalized recommendations and offers to draw more players to their platform.
Risk Management: Using AI, operators are able to identify addiction patterns to manage gambling addiction risk and personalize credit limits for responsible gambling. This technology is increasing acceptance of gambling among authorities by mitigating addiction risk.
The Roadblocks to Nigerian Gambling Industry
Ongoing legal battle in Nigeria regarding gambling regulations is posing significant threat to the growth fo gambling industry. The coexistence of federal as well as state regulators are creating tensions, leading to moot point for the gambling regulation in Nigeria.
For instance, The NRLC in Nigeria is the federal body that regulates gambling activities at national level, however, many state regulators refuse to recognize licenses issued by NRLC. This dispute between federal and state regulators has also come under Supreme Court’s scrutiny, the ruling to which is still pending.
Regulations ambiguity is the major challenge that is hampering the growth of gambling industry in Nigeria.
Another challenge is the black market in the Nigerian gambling industry. Illegal operators of gambling products are rampant in Nigeria. The mushrooming of black market in gambling is also due to the lack of a regulatory framework in the country.
What’s The Way Forward for Nigeria’s Gambling Industry?
The primary challenge being faced by operators in Nigeria is to obtain a license from NRLC. Even after obtaining a federal license from NRLC, they have to get a state license from state-based agencies. Another challenge is the financial burden of these licenses – the national and state licenses are renewed at recurring periods on payment of renewal fees and monthly gaming tax.
The only way forward in the given scenario is collaboration at the state and federal level. The regulatory authorities have to work together to allow the Nigerian gambling landscape to flourish.
Proper regulatory framework is the only synergistic solution to the challenges of black market as well as regulations ambiguity. With a smoothly functioning regulatory process, legal operators will be able to make profitable gambling business in the country, preventing them from astraying to the black side of the market.
