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In Oyo State, Retail Betting Eyes iGaming Shift
Iyke Bede writes that panellists at a recent talk shop organised by the Oyo State Lottery and Gaming Board provided interesting estimates on the future of retail betting
In the ongoing evolution of Oyo State’s lottery and sports betting sector, the expanding landscape signifies growth and unveils a spectrum of untapped potentials poised to redefine the industry’s trajectory. To attain more growth, operators within the state are leaning inward to consider prioritising online gaming as part of transitioning plans to meet future demands shaped by ever-evolving tech solutions.
IGaming accounts for around 37 per cent of all sports betting transactions nationally. This figure is bound to increase in the coming years when tech-savvy generations like millennials, Gen Z, and Gen Alpha will account for all demographics placing stakes. This implies a steady shift to online gaming as internet infrastructure continues to increase penetration, which currently stands at 55.4 per cent.
The remaining 63 per cent of the sector’s revenue is realised from retail betting, which comprises physical walk-in shops and retail agents who place bets and receive payments from punters, basically serving as the interface between the operator and the punters. As it stands, retail operations present unique challenges that include agents insisting on a higher commission, miscellaneous costs of running a physical business, and multiple taxations attracted from local, state and federal arms of government, thus placing an extra strain on profit margins.
During a panel discussion at the recent Oyo State Gaming and Lottery Board’s Annual Stakeholders’ Interactive Forum titled ‘Transitioning to iGaming: Exploring the Future of Retail Gaming,’ industry experts critically reassessed the existing retail platform with the aim of potential migration to online gaming.
Although in alignment with the idea of transitioning, Head of Gaming, Crystal Gaming (Betano), Ahmed Jokotoye, noted that the sports betting sector was “still growing with lots of room for improvement.” His assessment set the stage for a representative of Bet9Ja, Joan Akerele, to give an overview of the retail sector. She elucidated that retail gaming is a major point of access for less tech-savvy punters who rely on one-on-one interactions with agents to place bets.
Despite growth recorded in the sector, evaluated at $2 billion in 2020, the panellist noted that the rate at which businesses (operators) fail to break even or make a profit, eventually resulting in exiting the sector, is alarming.
On his part, the Country Manager of Betano, David Segunmaru, disclosed that investors fail to carry out the necessary research before venturing into the sector, which is currently suffering a jurisdictional battle between the state and national regulatory bodies for tax collection.
“The primary reason investors encounter failures when entering the retail space is due to being fed incorrect data. What this does is, that an investor is sitting down and working with the wrong figures. They don’t know how Nigeria works, and they are busy making projections on their future investments,” Segunmaru explained.
He added, “This industry is still at the infant stages, and if regulators are not careful, they will kill the industry, and there will be nothing for them to regulate anymore. There will be no more money for the government to generate.”
Segunmaru highlighted a notable shift in the gaming industry’s perception, transitioning from an informal economy to a more regulated one since 2005. He emphasised the necessity for professionals to manage its operations, ensuring meticulous record-keeping and strategic planning for retail agency development.
In his assessment, the Director of IT at Golden Chance, Odushola Gideon, opined that the sector is not ready for the transition to iGaming yet. He juxtaposed the decline of brick-and-mortar movie rentals and cinemas following the meteoric rise of streaming platforms to what might likely happen to retail gaming, noting that the industry is not well structured for the seamless shift.
“The cinema industry is having it hard now,” said Gideon. “You can watch anything on the internet. Retail business? I don’t see a future for it. Pools, before now, were handwritten. Now, you can use PoS. The current generation go online to play pool.”
In the eventual shift of retail gaming to iGaming, experts worry that it would lead to a loss of livelihood for many. Jokotoye projects that this shift won’t be absolute, though, but would have iGaming accounting for most of the revenue generated by the sector.
Head of Human Resources, Premier Lotto, Ken Nwankwo, noted that a rush to transition would only stifle local growth. He said it would nudge the federal government to consider issuing offshore gaming licences to international operators. Although revenue will be generated for the government, the impact of increasing gross domestic product (GDP) will not be felt.
