The Gaming Industry Review:Sport Betting, a fad?
The Nigerian tech industry, is currently recorded to be experiencing a boom according to recent comments from global as well as local sources. While we've seen an increase in web activity from blogging, Job search companies, e-trading, another less common specie is also crawling the Nigerian Techscape... well if you had read the caption, then you already know its the Sports betting Industry.
While there's no way to be completely certain about the first entrant, most google searches on sports betting return results dated as early as 2011. And since, 2011 the industry has seem much growth, with over 10 common sports betting services, and many others that appear to be unoperational.
Major brands in this industry are 360bet, Nairabet, Goldenbet, Saharabet, Surebet247, Merrybet, Stakersden. A good number of these companies are located in Lagos. Although not all of these companies situated in Lagos are currently being regulated by the Lagos State Lottery Board.
The Sportbetting Industry, is largely characterized by low entry barriers, as there are a lot of defunct Sportbetting sites, as well as high number of players. The number of defunct sites also point to the possibility of low exit costs.
The availability of epayment has aided entry into the industry, but most of the major brands in the industy rely on the "recharge card" approach, this obviously requires a huge cost outlay, before returns. Others rely on other epayment schemes like Liberty Reserve.
These sites have evolved from taking bets on popular Soccer leagues, to bets on virtually any sport even the American Football NFL. This is hardly surprising since the Soccer Leagues are seasonal, the businesses have adapted to an all year sport model, perhaps DSTV has aided this transition, since other less popular sports still get to be aired. This development is somewhat interesting, because what started out as a reward for fandom seems to have just transformed to a money making opportunity.
The Gaming industry could use some regulation, since the entry and exits attracts little cost, and the methods of payment are also very unregulated. Not withstanding there have been huge winnings, with an Undergraduate winning over a million Naira in April, 2014. I should probably add that there have also been devastating losses.
Since these sites are online they are much open to any nation with access to the internet, and can take bets from any country, BUT there are 2 known challenges. The first, the perception the developed world has about Nigeria and internet fraud. And, the methods of payment that involve buying of "recharge cards" (they are actually betting cards) are not available outside the country. However, the global sportbetting industy will continue to accomodate the growth of Nigerian Sportbetting sites, until they accept them.
It is reasonable to estimate that the Nigerian Online gaming industry would expand, for several reasons...
Youth Employment, evidently the lower the employment of youths, the higher the likelihood of growth in this sector, simply because, man needs to eat, and this presents an oppportunity to make some cash.
The huge partcipation resulting from the employment situation also increases the amount of potential losses, and consequently the amount of revenue that can be generated from running such sites. This gives these sites a very high profit margin relative to cost, as associated manpower costs are negligible.
Also, the employment crisis has pushed a number of youths into functioning as agents for these companies.
The consistency of high inequality in income, where the poor and the rich live side-by-side also drives the growth in this industry.
And, any country at the current stage of development where Nigeria is at, that experiences the birth of this gaming industry would continue to see growth in it as its GDP increases, simply because with increase in disposable income leads to a measure of freedom, any prior gamer who experiences a rise in income is more likely to spend more on his betting.
So, are there trends in this industry? Might we see an online casino following this business model soon enough?
Opportunities are available in this industry because of the fact that many of these sites are defunct. Since starting one is as easy as buying the rights of opertaion to a defunct site and overhauling its management with appriopriate capital, ideas and Resources. There surely is yet to be an industry leader in this sector, so is it a viable sector for investment?
It surely is.
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