East Africa: An opportunity for attracting big investments
This week, BtoBet’s team attended the Sports Betting East Africa Summit (SBEA) 2018, which was held at Kampala, Uganda from the 10th to 11th April. This event is the only dedicated sports betting conference in Africa with a focus on East Africa highlighting market trends, latest business opportunities and recent updates to legislation in East Africa.
When it comes to the gambling sector it is however East Africa that propels itself as one of the most appealing regions of the continent, with an increasing propensity of mobile penetration, and a legal landscape in many countries in the region that offers an important basis of stability for operators. The African gaming industry, with particular reference to its Eastern region, provide a perfect opportunity with high returns on low investments for those operators willing to enter or expand their business in the region.
Opportunities and Challenges in East Africa
With a deep knowledge of the region deriving from an already strong presence in the area, BtoBet Chairman Alessandro Fried discusses the opportunities and challenges that await the gambling industry from an African perspective. Considering how the African market, and primarily East Africa, is emerging as an opportunity for attracting big investments in the region, Fried believes that the domestic market has undergone a dramatic evolution, with the evolution of the mobile payments system proving to be pivotal for the growth of the industry across the region.
Fried is of the firm belief that the technological infrastructure that is already in place, resulting in a firm growth in mobile use, will in turn help make the area as on the most of attractive for conducting mobile business. He states that “statistics at hand, it is unmistakable that the advent of mobile sports betting is an indication for the land-based operators to focus on a move from shop-only to mobile.”
He further states that even though each region in the continent is constituted by a varying number of factors – be it language, culture, regulations, tax regimes and payment methods – they all have one denominating element that constitutes a common aspect, which is the innate passion for football. “It is this passion that is further driving the expansion of the industry in the region.” An expansion that as Fried further contemplated resulted in the growth registered in mobile betting with Kenya being the prime example in the region.
“A growth that has been made possible by a greater use and penetration of mobile devices, with telecom companies opting to provide low-cost products and services to their clients and users.” Fried further stated that East Africa, with Kenya as its primary example, is one of the ideal examples of market maturity in the whole African continent, with very advanced mobile payment methods allowing a large number of mobile transactions to take place on a daily basis. He also affirms that many challenges await those operators willing to enter or expand their activities in the African market. “
A challenge that could be conveniently solved by having the right technology in place to provide the support to enable the licensee to focus on the maximization of the experience on the retail side of the business whilst at the same time pushing the player to move to mobile via native apps, providing the support to enable the delivery of the most effective tailor-made betting proposal to players.
Limitations in the East African region
With the retail aspect of the gaming industry being very popular in Eastern Africa, the physical infrastructural limitations that the region imposes on operators are very clear. Although there have been strong investments from operators resulting in better facilities cropping out throughout the region, this surely is an issue that must be addressed in due course of time.
From a continental perspective Africa poses connectivity challenges with only 31% of its whole population having access to the internet, and with mobile penetration standing at only around 40%.
Another important challenge that operators must face is regarding the substantial gap present as regards the payment and money-transfer systems available. It is a wide known fact that a big chunk of the population is still categorized as falling under the “unbanked consumers”. A high portion of the population does not have access to any financial services. Mobile payments are predominant in the region, with operators charging payments directly to the users’s mobile phone bill.
For detailed insights on the East African iGaming market download our latest Industry Report here.