What made Amelco want to enter South Africa with LulaBet?
We’ve had an eye on the South African market for probably the last five or six years. We followed on from what we launched in Nigeria, which has been good so far. But with South Africa, up until more recently all that’s been legal is sports betting; so no other verticals, like iGaming, have been allowed to be a part of the offering. In the UK, we’re so used to having iGaming, casino, live dealer, virtual lottery verticals, you name it, all in addition to sports betting. So in South Africa, by only having sports betting available, this means there are strong traditional sports betting sites that have been there for years. There’s such a stronghold in terms of the sports betting offering and who was available to partner with.
But we kept looking and in the six months before Covid-19, we started to have more of an interest in South Africa; because this is when live dealer and iGaming became legal in the country.
Can you tell us about the regulatory set-up in South Africa and the operators dominating the market?
In South Africa, there are nine provinces and each province is almost similar to the way the US is run. However, in South Africa, you can get a licence in one province and this can serve the whole country; you’re not constrained to provincial borders. You can still operate nationally, whereas in the States you get your licence in Tennessee or New Jersey and you can only operate in each state you enter – so it’s slightly different. In South Africa, there are different regulations in each province, but you can offer services while being regulated in one of the provinces.
In South Africa, there are nine provinces and each province is almost similar to the way the US is run
Of course, some provinces are more kosher than others. Some of them are cutting corners and it’s Africa at the end of the day. So there are things happening and some provinces are more stringent on how they govern things. Established operators stay that way because of their reputation. There are so many scams going on and so many things that are not necessarily trustworthy, especially when it comes to payments, data and mobile usage. So once an operator establishes a good reputation, and they know they can deposit and withdraw at a sportsbook, they immediately trust it.
How does the South African market differ from Nigeria, where you also operate – particularly from a regulatory standpoint?
The first thing I’d say is that the rest of Africa is nowhere near as stringent as South Africa. In Nigeria, you obviously need to get a licence from a gaming board. But once you have that licence, there’s no real intrusive due diligence undertaken on the platform like there is in South Africa. This is why there are a lot more software providers and platforms scattered throughout the rest of Africa, whereas in South Africa the barrier to entry is fairly tough.
There’s obviously a much smaller pool to pick from when it comes to software providers. Although South Africa is the biggest earner in terms of revenue within the continent of Africa, Nigeria is second and more open. South Africa is the bigger market with a fairly hard barrier for entry. But once you’re in, if you have a solid product there’s no reason why you can’t pick up a fairly decent size of the market.
Are there any other markets in Africa you think may open up and grow in size, aside from South Africa and Nigeria?
Africa is such a big, vast space. We’ll never really appreciate how big the continent is. You could probably put the United States into Africa a few times. The population is massive and they’re all very football mad. Certain countries such as South Africa are big on cricket and rugby, which are both very popular. There are other countries in Africa where basketball is big.
In particular, I think Kenya is an interesting one to follow; Uganda, Ghana and Tanzania too. Sports betting is really big in these countries. A lot of nations in the south of the continent are starting to pick up as well; the likes of Botswana, Namibia, Mozambique, Zimbabwe and Zambia. One of the key factors to this is improvement and access to technology. Smartphones are now becoming part of the whole world and are a daily necessity; the same goes for Africa. You’ll even find that someone who lives in an African township, for example, will still have access to a smartphone and data because it’s become part of their daily life. Everything is accessible through these devices.
Africa is such a big, vast space. We’ll never really appreciate how big the continent is. You could probably put the United States into Africa a few times
Because of this growth in tech, the gaming industry is also picking up and blossoming, and now becoming a lot easier to access. Download apps and you have access to a sportsbook. Players can buy preloaded credit cards from a corner shop and they can utilise these funds for a range of different bets. There’s also a lot of new technology around payments in Africa.