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Special Report: The Growing Potential of iGaming in African Markets
By Jeff Osienya Sep 10, 2022 IndustryWhat is the outlook of online gambling in Africa? Join us as we tackle this critical question in a market where many operators are gearing up to expand thanks to a rapidly growing youth population and friendly economic factors.Africa has always been an apparent underdog when it comes to technological advancements. However, that story is fast changing as internet penetration, and device distribution in the continent continue to improve. iGaming developers and operators have had their eye on the African market, and recent reports show that gaming heavyweights will soon be flocking to the ‘untapped’ Mother Continent in droves.
An excellent example is London-listed iGaming juggernaut 888 Holdings PLC which launched an Africa-facing venture in May, going by the name 888Africa. The FTSE 250 Index company is among the many iGaming operators seeking to offer services to the growing pro-gambling youth population between 18 and 35 years old.
Moreover, the growth of the video gaming scene in Africa has been tremendous, with the population of gamers growing from 23 million in 2014 to over 500 million five years later in 2019. This abrupt growth can be attributed to disruptions in the technological field and the availability of more affordable gadgets and faster internet speeds.
African countries with the highest number of internet users per capita include Morocco, Seychelles, and Egypt, all of which have thriving iGaming markets. With these foundations, there are several reasons why the industry is headed to a positive future.
South Africa, Nigeria, and Kenya Lead the Pack
Being the continent with a majority of third-world countries means that sustained growth is expected, hence a more significant potential than already saturated markets. Africa now accounts for 11.5% of the world’s internet users. That figure is rising by the day as more and more young people are getting their hands on smart devices, especially mobile phones. And as expected, each country has its own stances on how far the industry can progress at the moment. Thus, the attention to individual markets would not be the same across the board.
For example, while South Africa boasts the biggest iGaming market in the continent, gamers have been banned from betting on online casino games. Of course, the internet casino gaming restriction is a major setback for the general gambling industry. South Africa’s GGR is estimated to grow to over $2.3 billion by 2023. Currently, there are almost 100 million mobile phones in the country, which signifies excellent penetration considering that the population is only about 57.7 million.
Kenya is also one of the markets with the highest potential. Sports betting has especially gained traction despite the strict regulations that forced out big players like SportPesa, causing a stall in the progress of the industry. Millions of Kenyan residents are regular online gamblers, most of which engage in online sports betting from their mobile devices. Players are interested in both local and international sports and have been found to bet on several matches – mostly soccer games.
Another major player in online gaming in Africa is Nigeria, which has the largest population and a high GDP, giving it an advantage over the rest. On its own, Nigeria is a formidable competitor to countries in both Northern and sub-Saharan. That’s because it enjoys a profitable industry that is still awaiting more defined regulations on gaming taxes. Nigeria’s sports betting handle is an estimated $2 billion each year.
Widespread Casino Gaming Interest in East Africa (Beyond Kenya)
Other countries that have seen investors showing considerable interest include Tanzania and Uganda. Uganda has a regulatory body that issues licenses to sportsbooks, although are no clear guidelines for the industry, and the government had previously put an outright ban on sports betting.
To meet the growing demand of avid gamers in Uganda, the Empire Casino opened in 2020 and is a state-of-the-art land-based casino with a fascinating approach to iGaming. The Tanzanian government saw an opportunity for the country’s economic growth and made a move to pass the Internet Gaming Regulations Act in 2012.
Live Casino Gaming is Also A Major Attraction
Another thriving sector of the iGaming market in Africa is live casinos which give players a real-life experience online. The land-based feel is something that some players still crave, and developers are making that possible for all gamblers, including those in Africa. The live casino market is definitely headed for a bright future as casinos get to cut costs and accommodate more players, even with limited physical space.
Live casino games also offer an interactive environment where players can chat with the dealers and amongst themselves. Blackjack and Baccarat seem to be the go-to options for table games, which is not strange as they are the most popular for punters across the globe. That said, analysts still insist that sports betting will continue to dominate the industry as players have been hooked since day one, and that doesn’t seem to be changing any time soon.
A Cultured, Mobile-Focused Market
Also, when it comes to the African online gambling market, the interest in players is in the way the games embrace the continent’s culture – spanning several ethnic groups even within the same country. As a result, local developers are always looking for ways to appeal to the players with familiar cultural contexts being incorporated.
Furthermore, the majority of the betting population uses mobile. So, it only makes sense that developers looking to enter the African scene will have to concentrate on games that are not only mobile-friendly but that can load without lagging on most devices.
The Familiar Pandemic-Nudged Shift
A significant catalyst of the expected growth of Africa’s iGaming industry is the Covid-19 outbreak. Like in the rest of the world, most people in African countries were forced to remain indoors, which in turn caused them to reinvent their recreational and money-making habits.
As several sectors globally crumbled to the ground, the online gaming markets have seen a complete turn for the better despite an inauspicious start in early 2020. In the African case, a new wave of online users was consequently created, and given that all related trends are still in their early stages, opportunities are vast.
It is, therefore, no coincidence that iGaming companies are getting ready to launch in several locations to tap into the growing market before it’s too late. Specific locations for setting up will obviously depend on the respective government regulations in place. However, with a stable internet connection, players that would previously head to brick-and-mortar establishments to place bets now have the luxury of Vegas-style gameplay from anywhere.
As the continent’s economy continues to hit an upward trajectory, the future seems to be bright both from an economic and entertainment standpoint.
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