As the online gambling sector continues to grow around the world, operators are always on the lookout for new jurisdictions and regions to expand into. Africa has flown under the radar for quite some time, but the reality is it is a prime market for consideration. But what opportunities are there, which jurisdictions should be considered and what is driving growth and interest?
The current state of play
Africans make up some 11.5% of global internet users, and a large number of them are using online gambling and betting sites. Since 2020, the sector across the continent has boomed, and it has put Africa on the map as a critical jurisdiction for the future growth and development of the sector. At the end of 2022, the African gambling market was worth some $2.2bn for the online sector alone, and this number is expected to shoot up by the end of this year.
But what is driving growth? There are several answers to that question. Firstly, poverty is declining, albeit slowly. This does mean, however, that more people are joining the middle classes and earning disposable income to spend on betting and gambling. This goes hand in hand with the digital transition, which sees more people using smartphones and having access to the internet. Currently, 64% of the population has smartphones, which will rise to 70% in 2025. In terms of internet access, almost half of these users have regular access to the internet. This is helped by the development of online payment solutions for Africans that cut out traditional banking institutions and facilitate quick and low-cost online payments.
Together, a perfect storm is brewing, piquing the interest of international online gambling operators.
Key markets in Africa
The key markets in Africa are South Africa and Nigeria. In the case of South Africa, its online and offline sector is expected to surpass $2.3bn by 2023, due in part to the fact it has the highest GDP on the continent, which gives a big boost to people’s purchasing power. In fact, half of all gambling revenue in Africa comes from South Africa, in particular the sports betting sector at some 24%. According to various studies, around half of South Africans bet on sports, particularly rugby, horseracing, football and cricket. Experts say this is set to double over the next five years, meaning the region should definitely be on your radar.
Another key jurisdiction is Nigeria, home to 200 million people. Its economy is growing and it has been identified as an important place for the online gambling sector. In 2022, it accounted for around 7% of Africa’s gambling revenue and around 30% of the population say they bet on a daily basis – equivalent to 65 million people. Not all of these are betting online, which hints at a huge untapped market. English football and European football are the most popular sports to bet on, with the Spanish LaLiga coming in third.
You should also keep your eyes on Kenya, a country where online gambling has been regulated since 2019. It is a leading market in the region, with an annual gambling revenue of up to $300m. Increased smartphone penetration and new mobile payment services are fuelling growth, in particular sports betting. There are currently some 7 million Kenyan nationals registered on at least one betting site; but they also enjoy poker, roulette and slots.
A need for regulation
As online gambling in Africa continues to grow, so too are concerns that regulations need to be put in place to protect players. A recent study from the British Academy and Global Challenges Research Fund found that governments in the region are struggling to keep up with the expansion of the sector, fuelled by increased connectivity and access to smartphones. Researchers found that in the 41 countries where gambling is legal, only two had published reports on its impact.
The study raised concerns that this shows government unawareness of potential harms and the measures needed to protect players in the expanding market. They argue that as the sector continues growing, the creation and update of regulation is needed to help foster growth in an ethical and sustainable way. Another concern in the region is the proliferation of unregulated gambling advertising, particularly in ways that are accessible to youth.
The study noted that 10% of Ethiopian youth were compulsive gamblers and more than 90% of Ugandan teenagers had at least one problem with gambling. In addition to this, a lack of supervision, monitoring and analysis in African countries means that there is little in the way of reliable statistics.
This makes it challenging for players, regulators and operators to know how to manage the development of the online gambling sector. The study’s researchers concluded that robust policymaking is essential to prevent further harms to youth and adults across the continent.
“Africans make up some 11.5% of global internet users, and a large number of them are using online gambling and betting sites”
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If you are an online gambling operator that wants to work with the African market, we can help. We work in many jurisdictions that offer licences which enable you to provide your services to local markets. Through setting up online gambling corporate structures in offshore jurisdictions, you can reap the rewards of this burgeoning sector and establish yourself as an early leader, before the boom starts. As a corporate service provider with over 25 years of experience in iGaming, we can take care of all your needs. From company incorporation and structuring, licensing, payments and compliance, we provide a full A-Z service tailored to your needs.
