The sports betting industry in Nigeria has grown significantly in recent years. The country currently has the largest sports betting market in Africa. Given Nigeria’s population of 213.4 million and the increase in smartphone use, there are opportunities for the launch of new sportsbooks in the country.
For anyone looking to develop a sportsbook in Nigeria, there is an array of valuable information and it’s important to know. Keep reading to discover whether operating a sportsbook in Nigeria is profitable and understand the main opportunities and challenges for sportsbook operators in the country.
Is A Sportsbook In Nigeria Profitable?
In Nigeria, around 60 million adults between the ages of 18 and 40 participate in sports betting. Those that are involved in betting on sports spend an average of 3,000 Naira per day. Given this amount of expenditure, you can see how profitable operating a sportsbook can be.
According to figures from KPMG, in 2016, Bet9ja had an average monthly turnover of $10 million. The company was joined at the top of the market by NairaBet, which had an average monthly turnover of $3m to $5m. Of course, startups in the industry do not have huge turnover figures, but there are still opportunities to be had from starting a sportsbook in Nigeria.
How To Set Up A Sportsbook In Nigeria
To make the most of potential opportunities, founders of Nigerian sportsbooks need to follow a process to set up their service. This process is outlined below:
- Invest in a long-term partnership with a top sports betting software provider.
- Acquire the licenses necessary to provide a sports betting service according to the laws of the country.
- Reach an agreement with a payment service provider so customers have a range of banking options available.
- Create a website that has an attractive design, is easy to navigate, and is responsive on mobile devices.
Opportunities For Sportsbook Operators In Nigeria
There are several opportunities available to startup sportsbooks in Nigeria. The most important of these opportunities are:
- Access to a growing customer base in Nigeria’s middle class that is fuelled by a growing penetration of mobile devices that was 37.3% in 2022 and is expected to reach 48% by 2076.
- The chance to develop valuable partnerships with telecommunication and payment companies to create healthy profits from a reputable service.
- An opportunity to develop live streaming, which is still a relatively new concept for sportsbooks in Nigeria and gives those who develop a live offering a chance to stand out from the crowd.
Challenges For Sportsbook Operators In Nigeria
The Nigerian sportsbook market is not just about opportunities; there are challenges for sportsbook operators too. The main challenges they face are:
- Competition from other operators, both domestic and international, a challenge that exists in all sportsbook markets, including the successful UK market where offshore sportsbooks are available to users; some of these bookies are listed here and represent a challenge to UK-based providers.
- The overlap of regulatory functions in Nigeria exists at both national and state levels.
- The fragmented nature of the sports betting industry in Nigeria may necessitate small players joining together to be competitive.
These challenges may be difficult, but they can be overcome. For any startup that is willing to work to do so, the opportunities are impressive.