16 minute read
Ghana’s Gaming Market
irst of all, I would like to comment
Fon the current situation in the world (COVID-19 crisis) and how it will affect the economy of the African continent as a whole. Despite the crisis related to Covid, the economies of China, the United States and Europe quickly recovered, the S&P 500 index hits growth records every day and Chinese exports to Europe have grown. But in this regard competition is growing in the developed markets. Businesses have long been looking at alternative emerging markets such as India, Latin America and Africa. Chinese business has long since started this expansion, especially in the African market. The gaming market was also not deprived of the attention of investors. Not all investors are ready to invest in the countries such as Somalia with ongoing military conflicts, Zimbabwe after the rule of Mugabe or Libya after the civil war. Therefore, countries with a stable political environment come to the fore. Today we will focus on the gaming market in Ghana. One of the most active investing programs in China was associated with expansion into Africa, which will be reflected in this investigation. Accordingly, Africa is one of the most promising markets in the world, since consumption has not developed at the level of Europe or the USA with a constantly growing population and the youngest continent of the world (the average age of the population is less than 25 years). This potential won’t disappear anywhere, unlike developed countries, where it will decline in the short and medium perspective. In this regard, competition in developed markets will be tightened, and investors will look for new markets and investment.
For your attention I will present the analysis of the gaming market in Africa and one of the countries of the continent – Ghana. Separately, upon
Oleg Usenko
request, a business plan will be provided, including an investment plan, an operational plan and ROI calculation.
This report is intended for the analysis of the Ghana gambling market with the aim of assessing investment risks, analysis of competitors and analysis of the legislative base. Operators: Sports betting is the number-one gaming operation in Ghana, with over 10 sports betting companies online and retail.
Average age: 21 12th economy in Africa according GDP per Capita 13th most populated country in Africa
Legal Landscape: Ghana Gaming Commission (GGC) Official language: English Local languages: Ga and Twi (not official)
Population: 31 million. The most populated cities Accra and Kumasi (more info here https://buzzghana. com/populated-cities-ghana/)
Internet Penetration: 39 percent as of 2019
SWOT (Strength-WeaknessesOpportunities-Threats) & PEST (PoliticalEconomic-Social-Technological) analysis
Payment methods: Mastercard leading form of payment. Visa is growing. The mobile payment solutions were launched by the mobile operators. More than 80 percent of Ghanaians have mobile wallets such as MTN, Vodafone or Airtel.
Minimum bet for gaming Ghana is 1cedi = $0.17
Political SWOT
Ghana has a multi-party system. However, there are two dominant political parties (the National Democratic Congress and the New Patriotic Party), with extreme difficulty for anybody to achieve electoral success under the banner of any other party. Since 1993 presidents have been representatives from these two parties only.
Nana Addo Dankwa AkufoAddo is currently the president of Ghana. He ran for president as the candidate of the New Patriotic Party (NPP). He was chosen as the presidential candidate of the New Patriotic Party for a third time for the 2020 general elections and this time he defeated John Dramani Mahama in the first round (winning with 54 percent of the votes), which marked the first time in a Ghanaian presidential election that an opposition candidate won a majority outright in the first round.
These risks are very low in Ghana because in a thriving democracy people don’t shake the country during an election. The biggest risk for the gaming industry would be the changing of the incumbent president. In this case, the Commissioner of the GGC can be changed after an election also. But as usual all political parties are represented in all government institutions.
View Ghana’s Forecast: GDP PPP Per Capita from 1980 to 2024 in the chart
View Ghana’s Forecast: Population from 1980 to 2024 in the chart:
I consider the political risks in this region to be low, especially considering the tolerance of the authorities towards all races and nationalities as well as religions.
Ghana is one of the most stable, secure and peaceloving countries in West Africa and Africa as well. I traveled to Kumasi and around Accra completely alone without any problems or antagonism from local citizens.
Economic SWOT
The economy of Ghana has a diverse and rich resource base, including the manufacturing and exportation of digital technology goods, automotive and ship construction and exportation, and the exportation of diverse and rich resources such as hydrocarbons and industrial minerals. These have given Ghana one of the highest GDP per capita in West Africa. Owing the GDP in 2011 Ghana became the fastest-growing economy in the world.
The Ghanaian domestic economy in 2012 revolved around services, which accounted for 50 percent of GDP and employed 28 percent of the work force. manganese ore, bauxite and oil. Besides the industrialization associated with minerals and oil, industrial development in
Ghana remains basic, often associated with plastics (such as for chairs, plastic bags, razors and pens). 53.6 percent of Ghana’s workforce were employed in agriculture (cocoa mainly). Ghana is
Africa’s secondbiggest gold producer (after
South Africa) and second-largest cocoa producer (after Ivory
Coast). It is also rich in diamonds,
Legislation gaming requirements
The Gaming Commission is a body corporate established by the Gaming Act 2006, Act 721 with the main purpose of regulating, controlling, monitoring and supervising the operation of games of chance in the country.
You can find Gaming Act 2006, Act 721 here. https:// gamingcommissiongh.com/oldsite1/images/pdf/ Gaming%20Act,%202006.pdf
The requirements for a gaming license are described in detail on the Gaming Commission’s website, and they are quite transparent and available to the investor. From my experience with the Ghana Gaming Commission, I want to note that all members of the commission are ready to advise and support market operators including Peter Mireku, chief executive officer of the Gaming Commission of Ghana. He regularly holds meetings, seminars with investors and is ready for dialogue with
the market operators, and providing ongoing protection and support of the gaming business in Ghana.
Go to http://gamingcommission.gov.gh or you can request all rules and regulations from me including general tax and legal regulations. You can find my contact details at the end of this article or privatemessage me at me here http://linkedin.com/in/olegusenko-mba
Social SWOT
Ghana is a patriarchal country. As an example, only men were the presidents of Ghana. At the same time, women have fairly high social and civil rights. Since Ghana is one of the most stable countries in Africa (politically, economically and in terms of physical security), many foreigners live there, especially a lot of foreigners from English-speaking countries such as South Africa, England, USA, Nigeria. Ghana also has a large community of Lebanese and Chinese. There are many migrants from neighboring countries of Africa.
Ghanaians are very religious and loyal to religions. There are no interethnic and interreligious conflicts in the country.
Ghana has strong cultural and heritage in the gaming industry. People do not show aggression to the gaming industry, but rather are very reckless and emotional toward any kind of entertainment. The biggest passion in Ghana is football. Boxing and mixed martial arts are also very popular in the country. Most of the population leads a healthy lifestyle (they do not drink alcohol and negatively relate to smoking).
Regarding the local management culture, in companies it is usually authoritarian. But at the same time, young employees are already need and seeking recognition, and want to be involved in decision-making. While these are weak shoots, this must be taken into account, since even the minimum involvement in decision making motivates the employee no worse than the financial component.
An effective team work can be built from the millennials from 20 to 30 years of age, which will show their importance for the company and will make them be easier to train and teach to work at high speeds and, for the good of the company. Therefore, tight control should be always present.
Technological SWOT
Telecommunications Ghana’s telecommunications statistics indicated that as of 2013 there are 26,336,000 cell-phone lines in operation. Competition among mobile-phone companies in Ghana is an important part of the telecommunications industry’s growth.
Ghana was one of the first countries in Africa to achieve connection to the World Wide Web. There are 165 licensed internet service providers in Ghana and they were running 29 of the fiber optic, and authorized networks VSAT operators were 176, of which 57 functioned, and 99 internet operators were authorized to the public, and private data and packet-switched network operators were 25. Mobile internet is available in all major cities of Ghana. Unlimited internet is not available in packages of local operators. The average cost of cable Internet is $40 per month.
Payments The financial services in Ghana have seen a lot of reforms in the past years. It has therefore become possible for Ghanaian non-resident individuals or residents and foreign companies or indigenous Ghana companies to open indigenous offshore bank accounts. Mobile money is the most popular among the population, which is provided by mobile operators such as MTN, Vodafone and Airtel. Almost the entire working population of Ghana mobile wallets.
Mobile users on the increase Despite Ghana’s gambling market being principally land-based, the growth of mobile use and the evolution of mobile devices are making the area one of the most attractive for online business.
Promising signs pertaining to the growing potential of mobile gambling in the country indicates to landbased retailers that their next step has to be to move from the shop to online. The evolution from retail to online is challenging; it requires more than the simple creation of an online platform. Indeed a mobile application is no longer a nice-to-have; it is now a must-have.
As usual, one of the threats of all African countries is unstable electricity, which should be solved by a generator or solar energy.
Competition analysis
Ghana is one of the many African countries that is being engulfed with the epidemic of online sports betting. This includes online poker, casino games as well as sports betting.
In regards to gaming companies with a large footprint across Africa:
Casino / Gambling: Golden Dragon – Osu; Golden Dragon – Tema; La Palm / KaiRo; Golden Tulibe (Millionaires) – Accra and Kumasi; Piccadilly / KaiRo; Vulkano/Ritzio; Victoria; Euroluck – Tema; Crown Casino – Accra; Vienna City – Accra and Kumasi.
Lottery: National Lottery Authority Ghana NLA; PremierLotto; Winner Pool / PinBridge - GTech (ceased) BetYetu; ChampionBet; EaziBet; EuroBet; Ladbrokes KaiRo; MillionairesBet; MyBet; PowerBets; PremierBet / EDITEC; SimbaBet; SlingBet; SoccaBet; SportsWin / LudWin; SportyBet; SunBet; SupaBets / Phumelela; WinnaBets.
The Casino Market
As mentioned previously, casino market has a number of operators, all competing for what would appear to be limited market capacity.
There is no entrance control or registration required at any property. Simply pass a basic security check and enter the casino.
Almost all of the casinos have some form of percentage payback on loss. This is generally a sensible 10 percent, payable the next day.
The main casinos have an online system for their slots play and in most cases this is a “force play” scenario. In other words, players are forced to use a cashless card for play.
Operating hours vary from property to property but I could not find any casino, which operates 24 hours on tables or slots. Peak business levels appear to be between 10 a.m. and 2 p.m. for the tables market.
The mix of players includes Chinese, Korean, Asian (Indian and Pakistani players), Lebanese and a mixture of expats, most of whom appeared to be South African.
Main Route Operators
Vienna City and Vulkano Games
Currently, the main competitors at this level of the market are the Vienna City Group and Vulkano Games.
Vienna City entertainment shops generally consist of a nightclub, restaurant and bars, and occasionally a hotel, with a separate gaming area attached. The gaming areas have a much better décor than the Vulkano properties and the product is newer. However, their footprint within the country is limited with only four gaming locations without an online platform.
Vulkano Games operates in the communities and their low-level segment of the customers.
Millionaires
The current market leader is, by far, the Millionaire’s Group with two properties in Accra, the Golden Tulip Hotel and the Golden Dragon Casino. In addition, they have casinos in Tema and Kumasi.
They provide a relatively high standard in terms of décor, equipment standards and product mix.
It is no surprise; they have the biggest properties in terms of head count. However, both tables and slots are priced in Ghanaian Cedi and the limits are very low. There was also a large portion of non-players whenever I visited.
Golden Tulip did have a VIP area but this has been converted to a poker club.
I was informed that their expenses are fairly high, mainly due to having a relatively large contingent of expat managers.
Kairo
The Kairo group operates two properties within Accra, The Palm Beach and The Piccadilly.
The standards and level of play within both properties have significantly declined since my last visit.
It would appear that the information provided by John Robbins, founding partner of this group, is correct. They have downsized and current standards are pretty low.
They removed tables from the Piccadilly operation.
Their tables were priced in Cedi and their slots in American dollars.
According to their regional director, the only thing that is keeping them going is a core contingent (15 – 20 slots players), who prefer American-dollar slots as opposed to Cedi. In addition, they have an interesting rebate program for their top slots players – they return one percent of turnover (handle) three times a week: Monday, Wednesday and Friday.
This equates to + -25 percent rebate on theoretical, which is generous but they have had to resort to this to retain their core group.
Caesars
The only dollar-priced tables I found in the city. Never busy but they do have the highest limits in town on roulette. Their highest priced roulette is $5 - $200. All card games were operating at $5 - $100.
They also have a full-size baccarat table (14 seats), which never had any action on the times I visited this property.
Their slots action is pretty nonexistent.
They have a three-table poker club on a mezzanine area. I only saw action in the poker club once and that was when they had a tournament (250 Cedi + - US$50), multiple rebuys. – They had 10 players for the tournament.
Sports Betting Market
Africa’s sports betting industry has grown astronomically in the last few years. This exceptional growth can be attributed to the large population of the nation and increased access to internet devices. This explains why bigger sports betting brands are making their entrance into the country.
Top five betting companies in Ghana 1. Mybet.com
Mybet.com is the best and Ghana’s leading betting
company. The company has many betting branches throughout Ghana and they are considered to be the most trusted betting bookmaker in Ghana. Mybet.com offers both physical betting solutions as well as online betting in Ghana.
2. Betway Ghana
Betway Ghana is one of the youngest betting companies in Ghana but due to their skills in marketing they have gained a lot of betting clients. Betway is one of the leading betting companies in the world. Betway Ghana offers only online betting solutions to Ghanaians.
3. Supabets Ghana
Supabets Ghana is one of the oldest betting companies in Ghana. They offer both online betting solutions as well as betting in 44 shops.
4. Soccabet Ghana
Soccabet is a bookmaker that is based in Accra, OSU and that offers online betting, mobile betting and offline betting. The company owes more than 60 physical betting shops across the entire country.
5. Premier Bet
They offer a wide range of football betting games to add to the thrill of following the nation’s favourite sport. You can bet online using your computer or visit one of their 90 game centres throughout Ghana.
International Betting Online platforms – Established on the market:
22Bet, Betway, 1xBet, LSBet, MyBet, William Hill, Betfair, BetVictor, 10Bet, PremierBet, Betsson, B-Bets
Local Betting Companies – more targeted but with lower odds and less online betting experience with betting bonuses: BetYetu, SoccaBet, SafariBet, EaziBet, SupaBets, SunBet, SimbaBet, WinnaBet.
Resolution about Ghana gaming market
Ghana market is very promising for the companies which don’t think that they will hire thousands Africans for 100 dollars salary and they will earn a profit for an investor. It is hard work to select a correct and honest person there but possible to find, train and manage them.
The Internet, online games, online payments, online companies go into the Ghanaian market which resonates with the young local population. The generation of millennials has reached working age and does not follow the ancient traditions and foundations. They want recognition, they are more adaptive to change and risk. The millennials are ready to buy online.
Ghana is a very safe and peaceful country. For example, I drove a car at night alone and I had no problems, since the police control the roads at night. Ghana has growing economy which is ieager for investors. Allowing for a good location, political and terrorism stability, a growing economy and mineral resources (oil, gold, bauxite, cacao), I can advise you to invest in Ghana’s gambling market..
If your company has the competitive online and offline products, an understandable entrance and development strategy, a professional and motivated team including local employees, prescribed procedures and tight control from the first step into the market, that the company will be able to make operating profit within one year from the start of operation. I allow a small margin of time, because in my forecasts I take into account that it will be a new company unknown in the Ghana market. As an example, I would bring about the opening of the Kumasi market, which is 250 kilometers to the north of Accra. I opened a casino in Kumasi City Mall with a completely different brand name than in Accra – Nevada. The shop began to make profit from the eighth month of operation, while within eight months the losses incurred during the previous seven months were covered, and over the next three months the investments in this shop were returned.
Seeing the quality of the competitor’s shops and online platforms and their level I can assume that customers are not spoiled by high service.
A higher level of service in the land-based shops and adaptive apps can bring the biggest customers. But internet gambling has the biggest opportunities at African market.
If you have any questions or need more information about the African gambling market don’t hesitate to contact me.
