The African connection: The next big opportunity in online gambling

My take-outs from ICE Africa, 2018

by

Job Mabiala, Client Engagement Specialist, Viadex

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Kick-off: Johannesburg, 24/25 October 2018
The renowned and long established ‘ICE Totally Gaming’ event has always been a premier meeting place and exchange of ideas forum for the gaming industry in London, Europe, and the USA. It’s an encouraging sign of the times in Africa that the continent is now on the ICE annual rota; emerging as the next big gambling hub.

The potential for gaming companies is growing in Africa, and there’s a chance to be there at the start. It seems to me that international operators will need to move very fast since ICE confirms that of the approximate 1200 attendees at this event, over 60% represented African businesses, coming from 26 African nations. Here are some of my key take-outs from the inaugural ICE Africa event and its context.

Changing cultures: Be here now
Africa has the youngest population in the world, with a median age, reported by Worldometers, of 19.4. It accounts for 16.64% of the total world population. Sub-Saharan Africa currently has 420 million unique mobile subscribers, with a 43% penetration rate. By 2020, the number is forecast to reach half a billion, making Africa the fastest growing mobile market. There are reported to be nearly 200 million smartphone connections; almost on par with the USA at an estimated 224.3 million, according to Statista.

If you can pay, you can play
Mobile payments are definitely growing: “Just over half of the 282 mobile money services operating worldwide are located in Sub-Saharan Africa, according to the GSMA.” (GSMAGlobal System for Mobile Communications Association). A report from McKinsey&Company, entitled ‘Mobile Services in Africa: Winning the battle for the customer’, observes that:

“In Africa today, there are 100 million active mobile money accounts (used by one in ten African adults). This far exceeds customer adoption in South Asia, the second-biggest region for mobile money in terms of market share, with 40 million active mobile money accounts (used by 2.6% of adults).” The cultural shift is in evidence, the winds of change are swirling.

A lot of partnerships will be forming in the coming months, as European, Asian and American companies seek to exploit new market opportunities. My colleague, Chris Walsh, explores the new market opportunities opening up in the USA as online gambling goes legal. See his blog, The sizzling topic at G2E, Las Vegas, 2018.

The retail culture
The current betting culture in Africa leans heavily towards retail. While technology accelerates change, culture can often slow it down. There’s an indefinable feeling of suspicion about gambling online, an environment where you don’t physically hand over the money to a real person, with the reassurance that a real physical person will hand over cash you can see and touch if you win. This will change. The recurrent underpinning theme of the show was about change. To be more specific – imminent change.

It’s likely that retail will dominate the scene for a few years to come but with the arrival of ICE, there will be a growing focus on online. Mobile betting is already taking shape, e.g. with SportPesa you can register as a member with your phone number as a username, place bets and win all on your mobile.

Until now the predominant strategy for international companies seeking to access the African market has been around forming partnerships with local organisations or those who have long ties with and presence in Africa and who understand the continent; most of them focused on white labelled products.

Africa presents unique complexities. Each region is different and comes with its own challenges. DRC alone has 212 dialects, and each represents a distinct culture. This convoluted matrix leads to the consensus that the most successful way to enter these markets is via a local partner.

At Viadex we already have experts in country; in Africa. As well as a long-established network of IT logistics services. In addition to that, we ensure that IT equipment is securely configured, that the supply chain is secure from cyber threat, and that global purchases are consolidated to ensure the best platform for success within the best possible commercial framework.

Get in touch. But hurry, you don’t want to miss this modern-day gold rush. Email us at info@viadex.com

 

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