Gaming for Africa Exclusive African iGaming Roundtable

In this exclusive Gaming for Africa roundtable feature, we chat to a number of key suppliers that have extensive experience and expertise in iGaming on a continent that provides enormous potential for expansion, providing you have the necessary local knowledge and guidance.

Is Africa really being given the consideration it should by operators and suppliers looking to expand their geographical reach?

Cyril Casanova, CEO & Cofounder of Honoré Gaming:

I would say not, but this means that many operators are missing a trick. Generally, the African market offers huge potential but especially in East Africa where solid regulatory frameworks are starting to come into force. These markets are less competitive than the likes of Kenya and Nigeria, so the cost of entry is much lower as operators do not have to dig deep into their pockets to take on the established power players in each. Instead, they can invest in improving and localising their product, finessing the player experience, and driving brand awareness among bettors. Of course, the US market is a big distraction for a lot of operators right now, but Africa still offers significant potential and those that are not looking at getting in on the action now will find it much more difficult to gain traction once the market starts to mature and the first-mover advantage has all but gone.

Simon Noble, Head of Sportsbook at Champion Sports:

I think it is being considered by operators and suppliers, but for many, it is not quite as stable from a regulatory perspective as they would like it to be for them to commit significant investment. This is certainly the case for the larger publicly traded operators who are perhaps not yet fully comfortable with the present balance between risk and reward. A small number have been willing to test the waters while others are taking a wait and see approach. Things can change quickly in Africa; you just have to look at what happened in Kenya with the market being open and regulated only for a 20% turnover tax to be brought into force to see why this is the approach being taken by many. From our experience, those that are keen to enter the African market need to do their due diligence when it comes to finding the right access partner and platform provider as this is key to navigating local regulations, constraints, and opportunities.

Reece Calderbank, Business Development Manager Africa, FSB:

I would say that Africa has dropped off the radar in the last few years when you consider the global focus which has been very much on North America with a desire among operators and suppliers to join the “gold rush”. Africa may have lost some of its cache as a result, but I think operators and suppliers would be foolish to ignore it. Technological infrastructure across the region is developing and smartphone penetration is on the rise. In addition to this digital evolution, there is huge organic interest in sport and sports betting with football the biggest in the region. This makes it fertile ground for European operators so long as they combine their experience with a highly localised product and offering. FSB is committed to Africa. We see it as a processive region when it comes to technology and sports betting and where there is ample opportunity for us and our operator partners to make a difference and meet player demand.

Andrei Beu, Commercial Director at Gamingtec:

The African continent is slowly becoming a popular destination for betting and gaming operators, a trend which has become more visible over the past few years. Africa is the second-largest and secondmost populated continent in the world, which naturally presents an opportunity for our industry. In my opinion, there is a lot more to these markets than meets the eye and the focus is not yet there. We can see of course a couple of providers already present in the region while others are still prospecting, but what we can be certain of is that Africa will be on a lot of the big players’ radar very soon. Gamingtec is there and we aim to grow consistently together with our local or remote partners in the following months.

Victor Pronk, CCO at Incentive Games:

The interest we have seen from and in the African market has been significant over the past 12 months. Any operator looking to expand its geographical reach is considering both Africa and Latin America as the potential across these regions is rivalled only by North America. Although player lifetime value sits at the lower end of the scale in Africa, punter preferences for large football accumulators allow for healthy margins. The use of mobile wallets as the payment method of choice facilitates the smooth and seamless onboarding of players with the volume of mobile payments increasing year on year. Take Kenya, for example. The country recorded its highest number of mobile transactions in 2021, up almost 20% from the previous year. M-Pesa is by far the most popular mobile wallet with more than 50 million active monthly users. This rapid adoption is being fuelled by younger consumer and player demographics in Africa where the median age is just under 20 years old. Amid such market conditions, it is no surprise that Africa is a market of interest for the majority of operators – if it is not, then it really should be.

David Natroshvili, Managing Partner at Spribe:

Africa is on most operator and supplier radars, but many are taking a cautious approach to the market. This is mostly due to some of the unique challenges it presents, from political and economic instability to limited technological infrastructure and an entirely different banking system driven by mobile payments. But where there are challenges there are also opportunities, and a growing number of operators and suppliers are looking to get in on the action. For those that can overcome these challenges, they can gain access to a large population that is probetting and keen to enjoy new and exciting online gambling experiences.

Which African markets present the greatest potential and why? Where are the biggest opportunities for those pursuing a regulated markets only strategy?

Cyril Casanova, CEO & Cofounder of Honoré Gaming:

Rwanda is a great example of an African market that is ideal for operators pursuing a regulated jurisdictions approach. The authorities have done a cracking job of creating a regulatory framework with high standards while still ensuring the market is viable for operators and suppliers. Other countries to watch include Zimbabwe and Burundi. Generally, the African market is delivering rapid growth – while online gambling CAGR is 9% across the industry, it is closer to 20% in Africa due to the growing population and the skew towards a much younger demographic and population.

Simon Noble, Head of Sportsbook at Champion Sports:

There is a bit of a split here between those markets where State regulators have forged ahead with regulation and those that have yet to, but both appear to be generating operator interest. The likes of Uganda and Nigeria have pushed ahead with regulations and have licensing structures in place which is great to see and provides some operators with the confidence and stability they are seeking. These countries in particular seem to be taking their land-based gaming industry online, and that provides plenty of potential for operators and suppliers with perhaps a slightly greater appetite for risk. That being said, we are seeing growing interest in North Africa too. These are fairly affluent regions with a strong appetite for horse racing and football. Of course, unregulated markets often tip the balance between risk and reward much more towards the former.

Reece Calderbank, Business Development Manager Africa, FSB:

South Africa has the potential to be big. It offers a unique blend of elements of a traditional African betting market with elements from Western Europe. Compared to other markets, it is more economically developed and with plenty of scope for continued growth. It is also politically stable which cannot be said of all African markets. South Africa also has a longstanding sporting heritage; football and horseracing are hugely popular which once again plays into the hands of European operators experienced in trading these sports. Then there is Nigeria, a country that offers economic stability and growth. The sports betting market is open and regulated and is flourishing right now driven in part by a VIP audience that might not be found in other African jurisdictions. In fact, Nigeria is a fairly advanced market when compared to the rest of Africa – it has a thriving technology hub in Lagos – and that is what makes it something of a cornerstone market for operators making a play in the region.

Andrei Beu, Commercial Director at Gamingtec:

When talking about the rapidly expanding African market, it makes sense to concentrate on some regions that have already proved to be trendsetters. This includes the sub-Saharan regions and even more specifically South Africa, Nigeria and Kenya which are the largest gaming markets in the region with players having spent roughly $420m on mobile games according to PocketGamer’s overview for 2021. However, many other markets are already or are soon to be regulated like Ghana or the Democratic Republic of Congo and possibly Tunisia if we go up north. These are foreseeable opportunities for operators and providers alike.

Victor Pronk, CCO at Incentive Games:

There are plenty of opportunities on the table for operators taking a regulated markets approach. I truly believe that Ethiopia’s evolution as a wagering nation will change the way the world looks at mobile money because of the expected liberalisation of the mobile money market this year. Ethiopia has the potential to be double the size of Kenya. Then there is South Africa and in particular changes in Mpumalanga’s fixed-odds regulations that will allow operators to launch new games into the market. Morocco is set to reassess its national agreements on its monopolies for lottery and other gaming types – a move away from this model could potentially open up a sizeable market. Kenya is something of a double edge sword. While the market is open and regulated, a recent tax change to 20% on stakes combined with 20% withholdings on winnings has caught some operators off guard. Ultimately, this will lead to consolidation and give large, tier-one operators the upper hand in what could be one of the biggest markets in the region. Then there is Angola, something of a quiet giant with its high GDP and improving mobile network coverage. There is no regulatory framework in place yet, but progress will undoubtedly be made in the coming months and years.

David Natroshvili, Managing Partner at Spribe:

There are a growing number of African markets that are either regulated or regulating for those pursuing a licensed markets only approach. Of course, there are also plenty of grey markets for operators that are not so concerned about licenses to target. Our games are live with betting brands in a wide range of African countries including South Africa, Nigeria, Ghana, Zambia and Kenya with additional market launches due over the coming months. In terms of the biggest opportunities, ultimately that comes down to operators and suppliers being able to work within the limitations found in most countries across the region (high data costs, the prevalence of legacy devices, etc) and still deliver a compelling player experience. Localisation is absolutely key to this.

What do operators and suppliers need to do in order to leverage the potential that Africa provides? What unique challenges will they face?

Cyril Casanova, CEO & Cofounder of Honoré Gaming:

The biggest mistake would be to take the approach used in Europe and deploy it in Africa. Simply put, this approach just does not work. Take Nigeria, for example. We have seen several European power players stride into the market only for them to struggle to engage players. Localisation and respecting the culture is an absolute must in any African market. From a technical perspective, platforms need to be super lightweight to overcome the high data costs that consumers face. They need to be incredibly intuitive on mobile, and a wide range of local, mobile payment options must be available for depositing and withdrawing. This absolutely does not guarantee success, but if these fundamentals are not in place, then it does pretty much guarantee failure. Ultimately, a comprehensive understanding of the local market is key and the best way of obtaining this understanding is through thorough due diligence and joining forces with partners that have boots on the ground and know the market inside out.

Simon Noble, Head of Sportsbook at Champion Sports:

Local market and regulatory knowledge is absolutely key. They also need to find the right partners that can give them the tools they will need to succeed. This is certainly the case when it comes to promotional tools and being able to drive awareness around players winning as this is a major acquisition opportunity for operators entering the market for the first time. Players play at brands where they know other players are winning. Localisation is also critical, so operators need to be given the flexibility to fine-tune their proposition for each market they target. Payments are another challenge they will need to overcome. Operators must understand which methods players expect to be able to use to deposit and withdraw in each African market and then ensure they offer them. Just because credit card payments work in other emerging markets does not necessarily mean that they will be more popular than Flutterwave or Pesapal in specific markets.

Reece Calderbank, Business Development Manager Africa, FSB:

They absolutely must offer a localised product and experience to bettors. The African market has a very different shape to Europe and a country-by-country approach needs to be taken. What works in South Africa does not work in Nigeria. Generally, scale is a key consideration as Africa is a market of quantity over quality. There are thousands of players betting at small stakes so operators must use a sportsbook platform that can scale and handle high bet volumes. On that note though, the average African punter is becoming ever more sophisticated and thus operators need to partner with platforms that have a robust risk management module and experience in the market. Moving on, payments present a multitude of challenges for operators to overcome, including integrating and offering non-traditional banking options. Mobile payments are an absolute must, so too is offering local payment options in each market. M-Pesa might be popular in one country, but that is not to say it will be the payment method of choice in another. Due to the cost of mobile data, operators must ensure their books are light and do not devour bandwidth. This means going back to basics with the UX and ensuring that players can easily and quickly place bets from their smartphones, which more often than not will be dated models with less computing firepower. When you look at the platforms currently being used by some African operators it is clear that legacy tech still dominates the market. To succeed now and in the longterm, operators will need to use a single view platform and modern tech solutions if they are to bring something to the table in Africa that delivers a superior experience to players.

Andrei Beu, Commercial Director at Gamingtec:

Mobile gambling in Africa has already taken a large share of the market and it continues to put its mark on the region. The tendency is expected to grow as phones and cheap broadband internet become more accessible to the wider public. However, this trend goes against a certain lack of access to new technologies, at least compared to the very well established markets like Europe and the US. Specific “low consumption” browsers like Opera Mini are still widely used, as too are Android mobile phones using Edge, 2G and 3G networks. This means the speed is much slower when compared to European customers. Operators need to account for this if they still want to deliver a good user experience and improve engagement, which means providers also need to be aligned to the market requirements. In addition, there is a question around specific regulations, market by market. In Nigeria, non-skilled card games, roulette and dice games are illegal but slot machines are regulated and only allowed for licensed operators. South Africa bans online gaming through remote servers, etc so a one size fits all approach simply doesn’t work here.

Victor Pronk, CCO at Incentive Games:

Mobile data and specifically the cost of mobile data is one of the greatest challenges that operators will have to overcome. There are currently three African countries in the top five countries around the world when it comes to high data costs – Malawi, a country with a population of 19 million people, being one of them. This means that operators and indeed suppliers must deliver low data products and solutions to minimise the cost for players. It is also worth noting that many African countries are still retail dominated and only permit sports betting and not casino games. This is partly why virtual sports are so popular across Africa and in these retail outlets.

David Natroshvili, Managing Partner at Spribe:

In addition to some of the challenges I mentioned above, a key hurdle that we are working to clear is that our Amazon servers are based in Europe and not Africa. This increases the “ping” time for our games which ultimately impacts the player experience. The market creates a huge demand to have servers there. This is something where we’ve put a lot of effort and resources into resolving. Currently we are moving to the Edge AWS in Capetown.

How can and are these challenges being overcome?

Cyril Casanova, CEO & Cofounder of Honoré Gaming:

The only way is to use a platform that has been designed specifically for the unique challenges and quirks not only of the wider African market but for each country within it. This needs to be combined with local knowledge and experience. I think this is why some operators are cautious about Africa, especially when you consider that some tier-one operators have had their fingers burned in the past. But this is a region with tremendous potential that can be unlocked with the right technology and by taking the right approach.

Simon Noble, Head of Sportsbook at Champion Sports:

As touched on previously, ultimately it comes down to carrying out due diligence on each market and finding the right access and platform partners. Local knowledge is absolutely key here, and so too is localisation. Without both, operators will find it incredibly difficult to meet player expectations, let alone exceed them.

Reece Calderbank, Business Development Manager Africa, FSB:

Operators need to respect the market and listen to and understand what players want. This really requires boots on the ground in each country that an operator is going to target. Those that think they can plug and play their European product into Africa are mistaken and we have already seen some big names learn this lesson the hard way. That is why partnerships are proving to be key across the region, with the operators enjoying early success often being the ones that have solid local partnerships or that are working with platform and tech providers that are experienced in the market.

Andrei Beu, Commercial Director at Gamingtec:

Some of the challenges are being overcome by those operators/providers who understand them in the first place. There is nevertheless a battle between progress and sticking to the old ways, technologically speaking, for many of the providers, hence a somewhat limited offering to African operators. While operators need to be licensed in most of these markets, providers are not required to obtain any kind of B2B license or certificate for the time being, yet the platform/services they supply need to follow the technical compliance guidelines which may be very different from one region to the other inside the continent. These obstacles rise all sorts of questions internally and they are not easy to handle for everyone.

Victor Pronk, CCO at Incentive Games:

A low data interface is a must, as too is offering sports jackpot games and text-based virtual titles. Our text-based virtuals have performed incredibly well for our partners – they replace fully animated virtual games, run seamlessly on mobile and as a result are driving revenues. That is also why it is vital to identify and work with partners that fully understand the market and how to provide experiences that not only meet but exceed player expectations.

David Natroshvili, Managing Partner at Spribe:

The technical challenges that operators face, and in particular the high cost of data and the prevalence of legacy mobile devices, means that sportsbooks and casinos must be lightweight. This ensures they do not consume large amounts of data, and that bets can be placed and games played from older devices. Our games are super lightweight and can run on any device without the performance dropping. This means that operators can launch them to players and deliver the same engaging and entertaining experience provided in more technologically advanced markets.

What does it take to deliver a truly exceptional player experience in Africa? How important is localisation in achieving this?

Cyril Casanova, CEO & Cofounder of Honoré Gaming:

I have touched on it above, but ultimately operators need to offer a mobile-first product that has been designed to deliver a smooth and seamless player experience despite the data challenges faced in most countries. This often means a stripped back, simple user interface. This should be combined with high levels of localisation across all areas of the book, from language to sports and odds. Mobile payments is key, as too is a knowledge of and respect for the culture and player preferences in each country. Those that can offer this will put themselves in the driving seat to succeed in what is an incredibly exciting market.

Simon Noble, Head of Sportsbook at Champion Sports:

I think the front-end experience is crucially important and understanding what UX and interface players in the region like to engage with. SportPesa initially led the way in the region, but the design and layout of its sportsbook is very different to that of operators in Europe. While overseas UI/UX designers may be surprised at the frequent need for horizontal scrolling inherent in many operator’s homepage designs, ultimately it is what players in Africa have become accustomed to. It’s also probably worth noting that data can be expensive in certain parts of Africa, so it is important to keep the design as simple and light as possible.

Reece Calderbank, Business Development Manager Africa, FSB:

Localisation is the bedrock of any successful operator product. What’s more, given the dominance of retail in Africa, a seamless omnichannel experience is also a must. Ultimately, operators need to deliver a player experience that is authentic to the region if they are to engage players and unlock the full potential the market has to offer.

Andrei Beu, Commercial Director at Gamingtec:

Africa has a very unique and beautiful culture, which for some regions is similar, yet it may be completely different between north to south, for example. Localization is important for three main reasons: Culturalization - this entails changing the games’ content to ascertain zero cultural disruption among users from different markets. Internationalization – this is typically the process of ensuring the games are seamlessly localized for the global market. It covers creating an iGaming architecture that accommodates different languages while removing codes inconsistent with the local market Differentiation – this plays a proactive role in embracing diversity by incorporating regional and cultural trends into the iGaming experience. The aim is to engage the local market in a unique and immersive manner. Having said that, Africa is not so different in terms of assuring a great UI/UX to other markets. The right content, the proper message and the relevant delivery channels can help operators achieve the engagement they are looking for. So for us, the provider, it’s equally important to follow the players’ preferences and provide a topquality product suite.

Victor Pronk, CCO at Incentive Games:

It is important to offer odds and markets across the sports that are most popular in the region. In our experience this is football and in particular the English Premier League. This actually hands the advantage to European operators experienced in running books across football and the EPL. Localisation is a must, especially when it comes to languages and payment methods - the way players want to deposit and withdraw in Nigeria will be different to Kenya. As mentioned above, local partners are also key, and we are seeing some operators enjoy success by joining forces with affiliates to drive awareness of their brands among players.

David Natroshvili, Managing Partner at Spribe:

I think it comes down to offering players something new and exciting. Take our crash game, Aviator, as an example. It is a new kind of social, multi-player casino game that features an increasing curve that can crash at any time. When the game round starts, a plane takes off and the multiplier grows. Players must cash out before the plane flies away. If they do, they win. If they don’t and the plane flies away, they forfeit any accumulated winnings and their original bet. Unlike most other gambling and casino games, this puts players in control of the outcome, and this has made it tremendously popular with all player types in Africa and beyond.

Anything else to add?

Simon Noble, Head of Sportsbook at Champion Sports:

Despite the challenges the African market presents, those involved with it are incredibly passionate and their passion is quite infectious. They are true believers in the potential it offers and even though it might not quite be there yet in terms of being a key focus for some of the bigger international players, local operators really do believe it will be one day. Of course, those that can get in early and with the right partners will be in the driving seat to leverage the opportunities on the table.

This exclusive Gaming for Africa feature was made possible with the kind consideration of Gameon - www.gameon.im