We’re talking about South Africa, Nigeria, and Kenya – there, gambling activity makes a significant part of the country’s economy thanks to well-formed legislation and taxation systems. Betting in those countries is national entertainment: adults of many ages put money on their favorite football, tennis, and even cybersport teams united by a single goal to win. With the help of a thorough strategy and understanding of the market uniqueness, it would be possible to enter the African scene painlessly and start to generate profit with no delay.
Why Africa is among the most promising regions for online betting business
There are three factors that make the African market especially advantageous for any kind of gambling & betting sites.
Africa takes first place when it comes to the number of young people. People of the 15-24 age range make about ⅙ part of the overall continent population. It is known that gambling and betting use the greatest popularity among the youth – therefore, creating the business in one of the African countries is a strong strategical move to get more engagement and potential customers.
What is more, locals are favorably disposed towards all kinds of sports activities. Football, rugby, basketball, athletics, boxing are among the most popular sports preferences around African countries. When all real-life sports events were closed due to the global lockdown, Africans turned towards the alternatives and demonstrated interest in online betting on cyber disciplines, table tennis, and even sumo and chess.
The last but not the least, almost 60% of all gambling activity in the country is fulfilled through smartphones, which creates a perfect opportunity to enter the local online betting market without spending a fortune on physical sales points.
Altogether, these features make a picture of an up-and-coming region that only awaits for its economic prosperity to come.
Legislation, regulation, and taxation
South Africa
Being one of the most developed regions, there’s no surprise that South Africa has long ago legalized all kinds of gambling activity – in 1994, the National Gambling Act was accepted that gave legal status to the majority of gambling & betting businesses in the country. Since then, the gaming industry has been consequently increasing its influence and scale, which is accounting for more than $1.86 billion GGR (gross gambling revenue) as on 2020.
To start operating in South Africa, a casino provider first would have to receive a local license, which would cost him around $28,000, with $14,000 paid annually for the document’s elongation. For comparison purposes, an Italian license would cost around $350,000 with $80,000 for annual renewal, while in the UK, one would pay around $390 per license itself but with a 15% tax on all of the businesses’ income. The official document gives permission of operation to all land-based casino establishments – unluckily, online gambling business in South Africa is strictly prohibited.
At the same time, the restrictions do not include online betting, which is entirely legal. To receive an online betting license, one would have to pay $700 for the document itself and $140 dollars for annual renewal. Such a small price for a legally certified betting platform is what makes the market of South Africa especially attractive to business owners with the major activity concentrated abroad.
Initial expenses would quickly be compensated thanks to the immersive enthusiasm of the local punters. According to the regional poll, about 50% of all adult population regularly engage in online betting activities. In addition to that, the official statistics show a slow yet stable growth of the market at 3.7% per year.
The taxation system in South Africa varies from province to province. The aggregated numbers show that casino businesses and betting businesses give only around 10% of their income to the government budget (10.2% and 8.5% respectfully.)
Nigeria
Coming second after South Africa in terms of the market volume, Nigeria is yet another highly promising country for a betting business to develop. According to numbers, about 60 million young players participate in gambling activity on a regular basis while bringing a company around $10-20 million of monthly income.
The local scenery has its particularities one has to acknowledge before starting to conduct any kind of activity in the region.
It is important to know that in Nigeria, some casino games are considered illegal – those are roulette, dice, and any other non-skilled game of cards. Betting sites in Nigeria are permitted and use great popularity together with lotteries, while land-based casinos have a great and almost unlimited range of supported entertainments. Additional regulations vary from region to region.
When it comes to online space, the law doesn’t explicitly mention gambling or betting sites in the objects of restrictions. Thus, Nigerians can play on foreign gambling websites, where the previously mentioned limitations aren’t valid. Additional prospects are offered by the fact that the mobile penetration rate has been swiftly increasing for the last 10 years, and already covers more than 50% of the adult population.
Due to the poorly developed legal framework, gambling and betting sites in Nigeria pay almost no taxes to the country’s budget. This may change in the forthcoming years, yet, based on the history of poor tax assessment, it is highly improbable.
Kenya
The Kenyan market closes the top of the three most developed African countries suitable for a gaming business. Gambling in Kenya is completely legal, either we talk about online or land-based establishments. The country presents a growing market with GGR estimated to be around $50 million as per 2020 and predicted to increase at a 6.8% rate per year.
Recently, Kenya became the focus of interest due to the conflict of the biggest local casino providers and the government. The conflict regarded the taxation system, which was increased from 10% to 20% from the general casino income. As a response to the government actions, two biggest casino providers decided to stop operating in the region, which led to the law being recalled and the tax setting back to 10%.
If deciding to enter the untapped gambling market of Kenya, one will have to pay around $10,000 per license and $5,000 for its annual renewal. Additional expends may include the investigation price, that is conducted prior to license issue regarding the accountability and due diligence of the licensee – this is also true for South African and Nigerian license granting procedures.
Regarding the most popular sports for betting, Kenyans are loyal football and basketball fans. Still, in 2018 the eSports Kenya Federation was established which tells a lot about the sentiments around the country’s bettors population.
Summing up
Is was calculated that the three sports markets we’ve reviewed totaled in $40 billion as at the end of 2018. African market possesses its own difficulties connected to political instability and lack of legal regulation – still, for those businesses who seek new markets and expansion, the African gamblers are a highly tempting object of consideration.
Compared to all the other world regions, African scenery is much less complicated to enter even if taking into account the challenges it possesses. The process of business deployment can be simplified even further using BetInvest’s turnkey platforms for gambling and betting businesses.
BetInvest offers platforms solutions that come together with Malta or Curacao gambling licenses, which would make a strong argument in favor of license issuing during the course of the legal investigation. What is more, our products have imbedded strong security systems, a wide range of additional services, as well as scalability that makes it possible to broaden the platform almost unlimitedly.
If deciding to enter abundant Africa, there is no better decision than to ask BetInvest for assistance.
