Betsson continues Africa exploration with 60% stake in Nigerian sports betting operator

Betsson has become the majority owner in Nigerian sports betting brand Betbonanza.

The Stockholm-listed company increased its ownership stake in the African outfit to 60% in June, a substantial increase on the original 25% stake agreed in Q1 2021.

“We thought now was a good time to scale up a bit because we have seen good traction in the numbers,” Betsson CEO Pontus Lindwall told iGaming NEXT. “We have been a minority shareholder in this company for quite some time and have closely followed the development of the operation.”

Despite its majority ownership stake, Betsson will not power the sports betting brand via its B2B sportsbook solution.

In fact, it will be business as usual for Betbonanza, which was founded in 2019 and is licensed by the Lagos State Lotteries Board.

“It is still acting as an independent company, pretty much,” said Lindwall. “They are on the right track now, but obviously we are quite a big company with some resources. If we can help out in any way, we are happy to do that. But they will run their own operations for the time being.”

Nigeria is not Betsson’s first foray into the African market. In December 2020, the operator launched its Betsafe sportsbook brand in Kenya, alongside a three-year sponsorship deal with two top-flight football clubs: Gor Mahia FC and AFC Leopards.

However, that launch did not develop as planned. Covid-19 struck around the same time and the professional football league was postponed as a result.

“I think we have learnt a few lessons there,” said Lindwall. “We tried to go in with Betsafe and did some marketing efforts, but then there was no soccer for a while. At that time, we sponsored the two largest soccer clubs, which didn’t make much of an impact, obviously.

“These markets are different from other markets. It is not always easy to operate there. If you are going to succeed, you need to show a great deal of patience,” he added.

Betsson CEO Pontus Lindwall: “These markets are different from other markets. It is not always easy to operate there. If you are going to succeed, you need to show a great deal of patience.”

For the time being, Nigeria is the only operational African market for Betsson. It has not shut down Betsafe in Kenya, but the company is not operating in the market at this time as operators have been temporarily blocked from accepting deposits during a licence renewal period.

Betsson will be hoping for better luck in Nigeria, which Lindwall described as “a big market and a country that is growing very fast”. Indeed, Nigeria is the biggest country in Africa by population and home to more than 200 million people – four times more than Kenya, for context.

While the opportunity is obvious, Betsson is perhaps wise to rely on the expertise of Betbonanza’s existing management team. The offering needs to be highly localised as consumer behaviour in Africa is vastly different to Betsson’s other, more familiar operating territories.

“They have a lower level of people with bank accounts, so you need to allow your customers to be able to deposit through other means,” said Lindwall when asked about the challenges of operating in Africa.

“That is one thing, and then you have the different infrastructure, with less good connectivity on the internet and mobile handsets which are maybe not as modern as you would see in Western Europe.

“There are several differences that you must take into account in order to succeed,” he added.

Africa is included in Betsson’s Rest of the World reporting region, which generated revenue of just €3.5m in Q2 2022 following an annual decrease of 4.7%.

The Rest of the World segment, which also includes the US market, accounted for 2% of Betsson’s €186.3m in overall Q2 revenue.