BETTING HOT NEWS The Developments Shaping the Future of Sports Betting in Africa 4 weeks ago Iwo Bulski Post Views: 302 Trends are driven either organically by changes in the environment (business, socio-political etc.) or by innovations in relevant sectors which may disrupt and revolutionize the status quo; resulting in a wave of changes to the established structure of things. While some of the things we will be touching on in this discourse may seem obvious, the goal is to highlight the reasons why these realities will factor into the next phase of the evolving African Sports betting Industry as we know it. Projections| Challenges | Opportunities We will be highlighting projected impacts of these trends and their specific impact on sport betting operations, consumer experience and behaviour, regulation and the overall industry dynamics. We will also be touching on how best to leverage these trends for maximum growth as an operator along with proposed approach towards driving the industry towards greater sustainability. Here are some interesting statistics to consider: The Impact of COVID on Sports Betting operations. Mobile has been driving consumer’s retail behaviour (pre-COVID 19). Retail foot traffic has declined by almost 60% in the past 5 years. However, retail spending has grown by over 250%. One key reason is that mobile is driving and evolving the retail experience for consumers. More people look for options and product information (availability/ prices) before going to an actual retail store. Projections: Due to the COVID 19 Pandemic, retail sales have been negatively impacted. Operators and Agents have had to review their retail strategy. Challenges: Operators may now pivot from the typical brick and mortar retrial betting shops to small kiosks and over the counter betting in small setups to accommodate social distancing requirements and also reduce cost of retail delivery over time. Post COVID Opportunities for Sports betting operations. While the rise of the sport betting industry in Africa has been largely fuelled by accelerated mobile penetration, mobile is playing an increasingly critical role in experience delivery. Hence, operators are not only focusing more on developing mobile first sites but also ensuring that features which where only available on desktop before now are now readily accessible on mobile (e.g. virtual games). This makes sense as most users carry out their betting activities (other related activities such as checking odds, streaming matches and checking scores, mobile financial services etc.) all on their mobile devices. As a result of this, operators are seeing the need to focus more on their mobile/online service delivery. Operational Integration (Online to Retail Integration) Since Retail is still very relevant in the African sports betting industry, it can be deduced that there will be a more pronounced and direct integration between online user experience and the retail experience. Operators may look at the possibility of creating consumer experiences which could start at the mobile level on their smartphones and end in the Retail shops; as they try to keep both sides of the value chain relevant in the overall business structure. The customer may be able to place a bet and redeem such bets in a shop with a code or place a bet at the shop and redeem winnings in the mobile wallet. This could be a way of keeping the retail store relevant to the customer journey. This scenario would also be great for bespoke promotional and experiential campaigns. Standardization of processes for efficiency Demands of Managing Scale Projections: While many operators started their foray into the Nigerian sports betting industry with a blue ocean strategy and consumers alike out of curiosity, the evolution of the stakeholders means that as the operator and consumer better understand each other, there will be a greater demand for more seamless interactions. Challenges: Consumers will demand better services and become even more vocal if their needs are not met and operators will have to up their game in service delivery. This will require more robust and well thought our processes driving the operations of the operators; resulting in more efficient service delivery. Opportunities. • Skill Up to Scale: The eventuality is the Rise of the Sports Betting Management professionals. Just like other industries have specialist professionals whose depth of experience makes them well suited to address the needs and peculiarities of the said industries, we are bound to see the same happen with the sports betting industry. This opens a window of opportunity for more blue and white collar jobs in the industry and the standards for entry become even more defined and trainings will be required to effectively participate and contribute in the sports betting industry. These professionals (working with other stakeholders across the several adjacent industries) will be the ones driving the development and design of processes on which the industry runs. • Win at Service Delivery: One of the often ignored aspects of the industry is the Customer Service/ Experience Management. Just like the telecommunications industry took the customer service practices to a whole new level; it can be expected that the same will be required as consumers demand better service support from operators. This will also become even more critical as regulations become more focused on service delivery and consumer protection. There is an opportunity here for operators to differentiate themselves and even win market share by raising the bar in this aspects. In an industry where brand loyalty is virtually non-existent, consumers will move over to a competing brand if they have a bad experience with their current bookmaker and the situation is not properly managed by the operator (in terms of exceptional customer service support). Regulatory Evolution: New rules. Same game Regulatory Guidelines are evolving as the industry is becoming more saturated and operators having a larger financial footprint/ impact on the money market. Recent industry events make it apparent that there is a beaming spotlight on sport betting operations due to the sheer volume of the business. This will eventually result in the more defined regulatory guidelines to address the grey areas which may exist in terms of regulation and approved practices. While this greater government oversight may initially seem as an impediment to innovation and the development of the industry, the opportunity for operators in the tidying their operations is that the existence of governance creates a greater sense of legitimacy and acceptance for the industry. As a recognized key contributor to the economy, the industry can easily be sustained and protected from wavering political climates. Hence, this should be read as a near guarantee for the future of the industry: Legal Guidelines: Consumer protection will also be a key factor in new regulations as legal guidelines to define the relationship between the operators and consumers will be developed. Roles, responsibilities and liabilities between the operators and the consumers will be made clearer as a result. Operator and Regulator Relationship: As mentioned earlier, the new band of sports betting professionals will not only serve on the operator side of things but will also cross over to the regulator side and help shape regulations towards achieving and promotions sustainable business practices for the industry as a whole. Strategic Partnerships: Shared Benefits. Shared Burdens. Telcos. Fintech. Bets The sports betting industry’s growth has been driven largely by the innovation in 2 key sectors; Telecommunications and Finance. As Telco operators provide easier access to the internet and financial services become easier to use, the adoption of sports betting has benefited greatly as the barrier for entry is virtually non-existent. Customers can have their betting accounts setup and funded within minutes. Placing bets is one of the easiest and most convenient purchase activities one can carry out these days (even notably easier that certain other utilities such as paying for electrical bills and certain taxes). This drives the ever increasing volume of bets. Industrial Nexus: Partnership with Telcos and Financial Institutions. Sport betting companies have been able to secure partnership with Financial Institutions and Telcos in order to acquire specialized services such as short codes, in-app deposits and even the use of bitcoin for transactions. It can be said that the telcos and the banks have also benefited from the activities of the sports betting operators as the boom in the sports betting mean that more people use telco services (especially data) and virtual financial transactions are steadily increasing; bringing more profits for all stakeholder industries. As we see the dawn of a more connected world, the growth of the sports betting industry will definitely be even accelerated; further contributing to the bottom lines of both telcos and financial institutions alike. Shared Responsibilities The great impact of the sport betting operators on these sectors also mean that they will have to play a more pronounced role in addressing the security and customer protection issues such as identity fraud and money laundering and financial crimes. In recent years, there has also been an increase credit loan products from banks and other financial institutions. While this is a largely positive development, one has to wonder if this increased access to easy loans will not backfire as this might increase the propensity to misuse of funds obtained as loans – activities of punters in East Africa is a good example. With most African countries now seeing a boom in the consumer credit facilities, there may be a need to ensure that the easy access to loan facilities does not translate into a big debt problem brought about by problem gambling. Beyond Football: More options + Easier access = Growth Sports Diversity Football reigns supreme in Africa. However, sports betting created a channel for punters to consider new and exciting alternatives with products that deliver differentiated experience to customers. Interest in other sports such as hockey and American football is also increasing as punters seek to profit from more markets. Sports betting has also helped to highlight other Alternative Sports as Esports, NHL, Baseball are now more in the conversations among punters. Beyond the live sports, Virtual games are also popular and are major point of interest for punters. The love for number games has remained astronomical across the continent. As a result, operators are making all these options readily available to customers; especially on the mobile platform which makes adoption easier. The increasing interest in other alternative sports could enable the growth of these sports and make the local industry more vibrant and diversified. In the past 2 years alone, the biggest TV shows in Africa (Big Brother Naija) has been sponsored by sport betting companies. The broadcast of the most popular football leagues have also been sponsored by sport betting companies. Beyond traditional media, sports betting brands have become even more ubiquitous as they have also incorporated Social and Digital media (i.e Social Media Ads/Google Search Ads etc.). Experiential marketing activities are also on the rise as sport betting brands seek to convert non-bettors by giving them a curated first-time experience of betting via sponsored events and co-branded marketing platforms. These used to be the domain of the telcos and large FMCGs but times have changed. Affiliates and Influencers Sports betting industry has vigorously moved into the Affiliate marketing domain as operators seek to widen their nets for acquisitions. This model allows other third-party platform owners to benefit directly from the punters via revenue share or CPA models of commissions. Influencer marketing is also on the rise as brands seek out the trending social media personalities as channels for their campaigns. Sports betting brands also routinely use positive human stories with themes of winning and success to generate more positive mainstream appeal. All these are tailored towards achieving social endorsement and brand credibility. This has resulted in a slight shift in the cultural bias against sports betting which existed not too long ago. With sports betting brands being woven into the public consciousness, the rate of adoption of sports betting as a lifestyle is bound to increase; even as the youth population of the various countries grows rapidly. PR and Public Perception Issues However, one major concern will be where to draw the line between effective marketing and promotion of underage (less than 18 years) betting – Responsible Gambling. As much as there are regulations to guard against this on media platforms and on the side of the operators, it will be increasingly difficult for minors to be shielded from sports betting messages as the presence of these brand grow on social and traditional media. This will certainly be a tough nut to crack if other issues such as gambling addiction and other negative issues arise. It would bring the discourse around sports betting into the sphere of cultural and moral principles which could undermine the progress of the industry as public opinion may not favour operators at that point. The most effective way to manage the issues is to get ahead of it by the operators engaging in public education campaigns against gambling addiction and best consumer protection practices (Responsible Gambling and Self Exclusion Policies). This will have to be done in close collaboration with regulators and other government parastatals and agencies such as youth and sports commissions. It is currently believed that the negative bias about gambling in Africa in the past few years has become punier by the day. Conclusion There is great potential for the African gaming industry particularly due to the growth in ‘localized’ technology and products, payments systems, internet penetration and smartphone adoption. Improvement in customer experience has also contributed tremendously to the punter’s attitude to stake. Omni channel approach remains key and strategic migration of punters from retail to online or strategic management of the 2 channels for the seamless engagement of punters will go a long way in meeting their needs. The absence of live events during COVID has opened the doors for product diversification to meet the insatiable needs of punters. Virtual Products and Number Games have witnessed high patronage and will continue to do so. Regulatory considerations for a more enabling environment will see the light of the day as there is more focus on the big numbers generated by operators and its contribution to state’s IGR. The gaming industry will continue to be at the fore front of Big Marketing Spend across the continent to remain relevant in the minds of the punters to douse the bias about gambling and encourage patronage. Authors: Tayo Atoloye is currently the Country Manager, Nigeria at Marathonbet – Panserve Ltd. An experienced Manager with over 18 years of experience in General Management, Sales, Marketing, Customer Service functions and Gaming Content and Platform Solutions. Experience span across Telecommunications, OEM Mobile Devices, Consulting, Pay TV, Gaming Content and Platform Solutions industries and Sports Betting Operations Management. He has previously served as the Regional Manager – Africa, at Evolution Gaming and Sales Director – Africa at Betgames.TV. Habib Lawal is a seasoned marketing professional with over 13 years of delivering effective marketing communication strategies in several organizations across various industries including Oil and Gas, NGOs, Media, Tech, Telecommunications, Sports Betting, Entertainment and more. He is currently the Marketing Manager at Congress Hedge Limited, Nigeria. Iwo BulskiIssues related to the gambling business is engaged in more than 30 years. My empirical experience gives me the opportunity to present events and companies from this business with full knowledge and industry knowledge. 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