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Identifying and capitalising on growth opportunities is a continuous challenge for all business leaders. It’s no secret that land-based gaming has taken a major hit and many of the more obvious growth opportunities can be found in igaming.
Continents such as Africa have been heavily reliant on their land-based channels and have only made progressive strides in their igaming markets in recent years. However, since the pandemic, we are looking at a completely different market landscape and online gaming is expected to surge, facilitated by improvements in infrastructure and regulation.
Mr Bashir Are, CEO of Lagos State Lotteries Board (largest jurisdiction in Nigeria by revenue) is leading this charge into the future.
He shared his experiences of the COVID-19 lockdown with us and gave us some clear insight into what the future of iGaming in Africa will look like, starting with Lagos as the template.
What was the biggest lesson that you learned from the impact of the COVID-19 pandemic and how will you use it to your benefit?
“The biggest lesson is the business continuity strategy. This must be present at all times so your organization can be as resilient as possible during times of unforeseen circumstances. There has to be a plan in place.
This has allowed us to assist the Operators by keeping an open line of communication.”
What is the most unexpected effect of the pandemic that you’ve noticed in Lagos?
“The landbased casinos were hit the hardest and there was a deficit in our revenue, projection, and actualisation.
So right now, we are encouraging online and remote gaming. You can see that in Lagos State Government, under the governorship of Babajide Sanwo-Olu.
They’re very proactive in terms of making Lagos State a smart city and a smart state.
If you look at Lagos state, it’s a sub-national State. Lagos is essentially a country within a country and is the sixth-largest economy in Africa.
For example, right now the Lagos State Government is a laying fibre optic infrastructure all over so that you can access fast internet at home. These are some of the things we’re looking at to make sure the punters and the operators are operating in a good environment.
Any ISP can plug in, and data is getting cheaper by the day.”
Do you foresee any long-lasting changes as a result of the lockdown?
“We are seeing more and more gaming products in Lagos State, so now most of the operators offer virtual gaming and sports betting online.
The retail side, however, will be challenged a little bit.
Lagos is also working towards power generation and distribution for at least 20 hours a day.
And then the fibre optic is there, which you can get very cheaply right now. The price has really dropped, and the expansion is huge.
We’re taking advantage of that infrastructure to reach out to more players.
Another thing we are trying to do is help expand the market of the operator. As gaming is mostly sport based, it’s not seen as gambling, it’s seen as entertainment. So be proud of it.
We’re also encouraging charity gaming, which has a positive effect on society. We’re building schools, we’re building hospitals and we’re building a lot of infrastructure from that money.
When people see what we’re doing, it will have an impact on their thinking, which will allow us to further expand markets.”
How can the federal and state government work better together to ensure the recovery of the market?
“We have 36 States in Nigeria and we’re are forming an association of gaming regulators.
Currently, we have 22 member States, and we’re trying to standardise operations and regulations so that when investors are coming in, they know they have the same standard, no matter which state they go to.
When the States come together through this standardised infrastructure, we can help facilitate the operator’s entrance into other States and other markets.
When they have issues with the bank, the financial institutions or even corporate affairs commission, Lagos now has a deep relationship with those agencies. They can even initiate the application process from my office and we can help them see it through.”
Do you think other African countries will see online gambling as more of a priority now?
“Definitely. Unless you are not forward-thinking human being. Our life will never be the same as we know it and technology drives everything.
There’s Internet of Things, there’s Artificial Intelligence, there’s Machine Learning. All of these factors will force most regulators to adopt technology, to expand their markets and get good levies, taxes, or good cost money from the operators.
In Lagos State, we are also looking at integrated resorts and casinos where people can go for a relaxing vacation.
We’re trying to change the perception of gaming in Nigeria, especially in Lagos.
Over the next four years, you will see those kinds of arrangements, where gaming is extended to tourism.
We’ll provide security, we’ll provide electricity, we’ll provide the broadband, so people from all over West Africa can come to Lagos.
Lagos is a riparian state, meaning that there’s water all over, so you can travel from one side to the other very easily. We’re doing a lot of cleaning up as we want to attract a lot of people from the neighbouring countries, even outside of Africa. ”
Do you think we will see a rise in online betting regulation or any other regulatory changes in order to recoup the loss of tax revenue sooner?
“I think so. If you look at the population in Lagos, we’re at least 20 million people and we’re expanding our infrastructure in terms of electricity and broadband.
The gaming industry is also expanding with things like horse racing, boxing, raffles, and all sorts of games coming up in Lagos.
The more that people become enlightened about what we are doing with the money, the more gaming will expand.
For example, some people play just to contribute to a good cause. Why not play and have the chance to win whilst also helping society?
There are lots of things going on and we’re working closely with the Ministry of Tourism and Culture, Ministry of Commerce and Trade, and the Corporate Affairs Commission, to make sure that it’s easy for businesses to enter the market.
With all this infrastructure around tourism in place, there’s no reason for the market not to expand.
The largest private investment real estate (in the world today) is located in Lagos, Eko Atlantic City.
It’s going to be the financial centre of Africa, as all the banks have a head office there. The American embassy is even moving to Eko Atlantic City.
So a lot is coming up, and the current governor Babajide Sanwo-Olu understands that.
There’s a significant amount of improvement in both physical and electronic conditions; you can imagine the impact that this will have on the economy.”
Why is Lagos such an attractive area to set up operations?
“For any Operator who wants to expand their business, and I say this with the utmost sincerity, Lagos is the destination.
It’s down to the way we treat our investors, the size of our population, the level of education, and because of what the Government is doing to expand the economy.
The dead capital (transactions that cannot be captured electronically) in Lagos sits at $45 billion.
I’m coordinating with operators to extend their platform to mobile money, so they can reach more customer at the grassroots level. I’m connecting mobile money operators with the gaming operators, so they can reach out to our customers.”
Editor’s Note: From speaking with Mr Bashir it’s clear that the future is looking bright for many African jurisdictions.
Key improvements, spurred on by the Covid fallout, are being made to ensure the successful expansion of their markets and so there’s never been a better time to get involved in this region.
Investors or industry stakeholders on the search for future growth should have their sights firmly set in Africa’s, more specifically Nigeria’s direction.