The African gambling sector is set to reach $2.2 billion by the end of 2022 and increase by over 12% year on year between now and the end of the decade. In his latest column for Yogonet, iGaming industry consultant Ron Mendelson takes a look into this emerging market.
Growth is being driven forward by increased financial independence, a growing middle class, fast internet, and accessibility to smartphones and other devices. However, the market is still hugely untapped, meaning there is plenty of room for expansion for startups and already-established brands that want to dip into new audiences.
Currently, just under 700 million people in Africa have access to a smartphone, a penetration rate of around 65%. 5G is also being rolled out in several nations, including South Africa, Zimbabwe, Botswana, Madagascar, Togo, and Mauritius. This is hampered, however, by the fact that only around a quarter has regular internet access, although this is increasing quickly every year.
Future projections
Sports betting is currently the most popular online and offline gambling in Africa. This is due to strong cultural ties to sporting events such as football, cricket, and athletics. The younger generation is particularly drawn to gambling on European football, horse racing, rugby, and events such as the Olympics. This will continue going forward, but we also expect to see diversification into other areas, particularly those that are more mobile-friendly. This will include video slots of various kinds, as well as regular table and casino games. Live dealer games will be of interest, but they are not a key area of focus for the short term. Whether eSports and fantasy sports will become an essential regional vertical that is worth considering. While they are not so much now, the potential is there, particularly for fantasy sports.
What is the legal status of online gambling in Africa?
Depending on where you are in Africa, the laws can be some of the strictest in the world or some of the most lenient. Out of the 54 nations of the continent, Sudan has the most stringent rules with punishments, including public lashing. However, in Kenya and Nigeria, online gambling is booming. South Africa has the most comprehensive online gambling laws, issued in 2004 and updated in 2008. Almost all adults have gambled in some shape or form, and in 2022, it remains a thriving business for the country that is expected to reach $2.3 billion by the end of 2023.
Aforementioned, Nigeria has the largest sector in the region, accounting for 7% of the total, likely due to its 200 million plus population and high GDP. Gambling was legalized back in 2004, and today, online gambling accounts for the most activity, totaling some $2 billion every year. To put it into context, 30% of the population said they bet on sports daily, equivalent to 65 million people. Due to governance disputes, the online realm is not currently regulated at the federal level, but getting a license from the authorities is possible.
Tanzania is another country that has pioneered the way, legislating in favor of the online industry and welcoming gambling businesses. Operators can apply for online casino and sportsbook licenses against a flat taxation rate of 25%.
In Ghana, the authorities have legislated favorably for the sector and issued licenses for different kinds of operators. While it is not so big as, say, the Nigerian market, it is sizeable, and it is continuing to expand. Not only that but the licensing regime and government approach is considered the most stable on the continent.
Uganda doesn’t explicitly legislate for online gambling, but it is possible to get a license. Ugandans spend around $40 million on gambling yearly, and taxes are at the 20% level.
Other African countries where you can gamble legally or without breaking the law include Mauritius, Zambia, Namibia, Botswana, and Angola.
In conclusion
Africa is a great place to expand your online gambling business. While some countries are offering licensing, we would at this time advise against going local. This is because there remains a lot of instability and uncertainty, and legal matters can be prone to quick change. But that doesn’t stop you from servicing the African market from where you are. There is enormous untapped potential across the whole continent, and in many countries, online gambling is just in its infancy, meaning it’s a prime time for investors.
If you want to start your online gambling company or expand your existing one, contact Fast Offshore today for all your gaming, corporate, and business needs.
Original article: https://www.yogonet.com/international/news/2023/01/16/65730-igaming-in-africa-a-wealth-of-potential
