FEATURE
INTO AFRICA:
THE OPPORTUNITIES
AND CHALLENGES
As the African market unfolds and attracts interest from major operators, affiliates also have an
opportunity to enter the region but, as Joanne Christie reports, there are pitfalls as well as potential
in igaming’s least charted continent
WITH REGULATORY CHANGES
and saturation in European markets
making life tough for affiliates who’ve
traditionally focused on established
igaming markets, it’s inevitable some will
start looking to emerging markets
to diversify their revenues.
With its population of more than
one billion people and a clear upward
trend in the number of people gambling,
Africa may seem like a continent full of
untapped potential. But that potential sits
alongside some major challenges – as well
as localising their offering, affiliates and
operators also need to find ways around
significant connectivity and payment
processing infrastructure gaps.
Internet World Stats estimates only
31.2% of Africans have access to the
internet. And in the World Bank’s Little
Data Book on Financial Development
2015/16 it reported that in 2013, just 17.5%
of those aged 15 or over in Sub-Saharan
Africa had accounts at formal financial
institutions, which rules out the majority
of payment processing systems used in
developed countries.
But there are bright spots in Africa, for
example, Kenya, with its highly developed
M-Pesa payment system set up by Kenyan
mobile operator Safaricom around 10 years
ago. M-Pesa is so widely used it is regularly
estimated that half the country’s GDP is
moving around the country via M-Pesa.
One reason this is so popular is that in
countries such as Kenya mobile penetration
is much higher than fixed line internet.
According to the Communications
Authority of Kenya, mobile penetration in
the country recently reached 88.1%.
While European operators are
increasingly focusing on mobile-first
strategies at home, it’s important to
recognise that these won’t necessarily
translate well to Africa — in many cases
bandwidth will be lower than in the
developed world and through mobile phone
ownership is growing fast, handsets are far
less sophisticated. But it’s vital to get the
mobile offering right as it accounts for the
bulk of traffic to igaming sites.
“Mobile traffic is very high with over
60% of first time users registering via
mobile devices,” says Leandro Giovando,
managing director of sports betting and
casino operator Betin Kenya.
“Affiliates have to understand that Africa is about
perseverance and player value is not going to be
anywhere near European levels”
Mathew Symmonds, Web Analysis Solutions
Betin Kenya launched an affiliate
programme in August 2017, and Giovando
says affiliates are a “key channel to
maintain the stable increase of our
business”. The programme also allows
affiliates to target sister brand Betin
Uganda, where Maria Raffaella Micuccio,
marketing and communications director,
says “affiliates are one of the best traffic
sources for Betin Uganda”.
Mathew Symmonds of Web
Analysis Solutions, the affiliate behind
WinDrawWin.com and PredictZ.com, says
Kenya is currently the strongest African
market for igaming, but that impending tax
rises — a tax rate of 35% was announced
last year to come into force in January
2018 — are deterring both operators and
affiliates, both of which are beginning to
look to branch out.
Diversification across continent
“Operators are now seeking to diversify
into other African countries, and those
in Eastern Africa that support M-Pesa
are popular, in particular Uganda and
Tanzania,” he says. “Nigeria is the one
market in Africa that perhaps offers the
greatest potential. As this market opens
up, and regulation and payment methods
become easier, then we believe this will be
the strongest market in Africa. Alongside
Nigeria, Ghana is now becoming a popular
market due to its relative wealth compared
to other African countries.”
iGB Affiliate Issue 66 DEC 2017/JAN 2018
35