An opportunity too big to ignore: Five things we learned about iGaming in Africa
Here are five things we have learned from the panel discussion “The NEXT frontier: Africa”.
- It’s all about volumes
Africa is home to 1.4 billion people, and with around 60% of the current population under the age of 25, it is also one of the world’s youngest continents.
Vella said that while some metrics, such as revenue per player, do not compare with figures achieved elsewhere; operators need to realise that the African opportunity is all about volumes and not so much about player value.
“And I mean insane amounts of volume, and insane amount of traffic,” Vella said.
- Know your customers
While Africa’s large population certainly presents a key opportunity, Dobbin highlighted that it’s also a continent made of 54 different countries, each with it is own legislative, governance and cultural identities.
Knowing your customers is therefore important, but it’s not always easy. KYC as a concept is only just being explored in Africa, Dobbin said, and rules vary greatly between countries.
While in Europe KYC requirements are often seen as a burden, the lack of them also presents challenges elsewhere.
Dobbin highlighted that it’s extremely difficult to assess and “manage your business risk when you don’t even know who your customers are”.
- You need a localised product
“It’s naive to think that your African product should be exactly the same as your European product,” Vella said.
One reason for this is mobile data, which is still expensive in Africa. This puts some limitations on product and UX and demands websites that load fast.
African consumers “are toggling on data all the time”, making it useless to stream a football match for the players to watch, Dobbin added.Vella also highlighted that transaction speed and fast pay-outs are paramount: “I have never seen people cash out as fast as in Africa,” Vella said.
When it comes to communication, it’s important to choose the platform that’s dominant in the country.
“This may be text message, WhatsApp, telegram – you can’t come with your usual CRM solution,” Vella said.
While the iGaming landscape in Africa is constantly changing, Dobbin said “if you come in as an operator ready to adapt, there is no reason you should not succeed.”
- Tax is a big question
Taxation is definitely an area for concern, according to the experts. “It’s a huge challenge to understand the tax implications in each and every market,” Vella said.
It also involves a huge level of unpredictability and uncertainty for investors.
Vella pointed out how back in 2017, the tax authorities in Kenya proposed that gambling companies should pay a 50% tax.
While the proposal did not go through in the end, it is a key example of how governments look at the industry.
“I think many African governments do not yet understand the industry and how businesses operate,” she said.
On the other hand, she has also met many government officials who are keen to learn more about the industry and understand how best to regulate it.
- Retail is important
Vella agreed and pointed out that trust plays a big factor for African consumers as “seeing is believing”, with many African consumers still questioning whether online businesses are the real deal.
From the perspective of African bettors, she said: “When I see that you have shop, I can feel that you are real and that you will pay me.
“So, from a marketing perspective, the connection between offline and online is important,” she added.