The East African iGaming market has been a major hub of growth in recent years, spurred on by its advancements in mobile payments and telecoms infrastructure. Kenya is often mentioned as the market leader in this region but there is a lot to be said for its neighbour, Tanzania, also experiencing healthy growth in their market.
Traditionally Tanzania has always been very focused live sports betting, so the lockdown hit the market very hard. We caught up Jimmy Keneth Masaoe, Chairman of the Tanzanian Sports Betting Association to hear his perspective on the impact of the pandemic, learning from our experiences and what the future holds for this burgeoning market.
How did the impact of no live sports events impact the Tanzanian market and what lessons did you learn that can be used to your advantage going forward?
“There were two main areas. The biggest one was not having live sports as it was a surprise for the market.
The English Premier League makes up 90% of the punter’s activity and I can say that we had a decrease of 80% of sales immediately after they stopped the league.
The second one is where most of the companies decided to lay off their employees. This had the biggest impact in terms of individuals in the Tanzanian market.
With an 80% decrease in sales, the operators were looking for ways to cut their costs, so, they had to lay off the employees to afford to run their businesses and operations.
We have learned that you need to be flexible and always have plans for how you should engage with customers if a situation like this arises again. We had to learn how to engage our customers with new products, like Virtual spots, for example.
In Tanzania, the principal license allows you to offer virtual and live sports, but you cannot have an online casino. So, in response to the last few months, many operators are now applying for online casino licenses so they can keep their customers engaged.
This is proving successful for them with things like Live Casino, Slots and so on.”
Many companies may now be considering shifting their operations from retail to online. Is this possible in the Tanzanian market and what tips can you give for making this transition easier?
“Online is very popular compared to offline.
However, if you have plans for an online license, it’s completely separate from the offline license and how you operate the shops.
When we started in 2011, the most popular area of gaming was the physical casinos. Then we started with retail and later we moved to the internet. This was greatly helped by the availability of mobile network operators and mobile money construction.
It’s really pushed the industry in a positive way. Most of the operators do provide some form of online betting. Some of them have closed their shops and have refocussed their offering on internet sports betting.”
Key African markets such as Tanzania are still in a growth phase and have a lot to offer. What processes or strategies can African based operators adopt from their more experienced European counterparts that would help the industry reach it’s potential quicker? Or is the Tanzanian market too unique?
“In Tanzania, we focus heavily on only live sports. Due to the pandemic, we as operators decided to be flexible and introduce some new games, but we didn’t market it very well.
For example, we introduced esports after the pandemic, but people were not even aware of the offering. The market didn’t respond very well as they assumed it was the same as virtual.
This was still the case after live sports resumed.
We’ve stopped pushing esports even though we believe it will be a great future product. Whereas in Europe, esports is incredibly popular. The East African punters need to be educated about this new product.
If you look at some of the operators from Europe, they offer very different bonuses and various alternatives on acquisition to keep their customers or attract new ones. This is an area that is of interest to us, to learn more about how to attract and retain.
Competitive odds are also a challenge. We fail on this often due to Gaming Tax.
Some of the big punters do prefer to play with the offshore operators because of the competitive odds and other offers.
We need to at least have competitive odds and some other offers to attract customers. This does, however, often come down to the tax rate. It’s a little too high in Tanzania and is the highest in the East Africa region.
We’re in a negotiation with the government to review the gaming tax to keep the operators more competitive and avoid punters playing with offshore operators.
Before they changed to the GGR model, we were paying 6% of total sales. After the last negotiations, we changed to the GGR model and winning tax. It’s still high compared to the other African jurisdictions.
They have invited us to talk and we need to explain to them how it works. We have had a discussion to explain what was needed to help the future of the gaming sector.
They are listening and last year they invited us to the budget committee. We went to the task force for tax reform and they have received our proposals. At the end of the day, the government also need to see the market potential for them.
It’s an ongoing conversation with them and they really need to understand the competition that we have between the legal operators and the offshore operators. I believe they do understand, and I see that the future will be good.”
Fraud, pandemic lockdowns, problem gamblers, high fees are all significant risks that industry stakeholders are managing every day. What can be done to protect the industry and what would you like to see from the Tanzanian governing authorities in terms of further support?
“In the East African market, we haven’t put in much effort on the issue of educating responsible gaming.
However, the government has now started focusing on this issue. They are starting to ask questions like “How do we protect the consumers?” and “How to do we protect the underage?”.
If you want to register to play you need a SIM card, which requires you to be above the age of 18. So, in terms of protecting the young from online gambling, we feel like we are managing this area.
But responsible gaming is another issue. This is something that we, as an industry and as an association, have a good plan for this year.
One of the core projects will be to educate consumers on responsible gaming. The Government are focusing on this area also.”
Editor’s Note: Speaking with Jimmy has given some great insight into the dynamic region of Tanzania. Like many other growing markets, they are still learning, especially over the last 12 months. They’ve learned how to be flexible with their product offerings, engaging customers with new offerings such as virtual sports. Just like the operators, the regulators are still learning too. Creating a regulatory framework that protects customers, creates sufficient tax revenue while allowing the operators to remain competitive is a tricky balancing act that appears not yet to have been achieved. The good news is that the conversation between key stakeholders is still ongoing and there is light at the end of the tunnel. A promising future ahead for Tanzania.