TAPPING INTO THE N40 BILLION SPORTS BETTING INDUSTRY
Posted on May 24, 2015
For many years, Yahaya Maikori was struggling as a lawyer until coincidence took him into the gaming/sports betting industry projected by Price Water Coopers to generate N40 billion in Nigeria next year. Maikori, President of the Gaming Association in Nigeria, in this encounter with Nseobong Okon-Ekong wants states and other would be stakeholders in this era of reduced federal allocation and poor funding to see the gaming/sports betting industry as a veritable income generating sector
Taking into account the fact that Nigeria is a very religious society, the new enterprise embarked on by lawyer, Yahaya Maikori needs to be approached with meticulous caution. Even Maikori himself battled with the moral question for a while before deciding to take a plunge into the business. At first, he thought he could deal with it with the explanation that he was offering a service as a lawyer. But it did not quite work, somewhere at the back of his mind, there was a hint of guilt. This only forced him to comb the holy books. It was important to be informed.
He made astounding discoveries about gambling. When the ship that Jonah was traveling was about to be wrecked they had to cast lots to reveal what the problem was. Also at the crucifixion of Jesus Christ, they cast lot for his clothes. That is the earliest history on betting. Maikori argued that there is nothing that is exactly right or wrong. It is the context in which one does it. “Sex can be right or wrong depending on how you do it. Drinking can be right or wrong. Even the Bible is against gluttony. The biggest churches in the world were built by betting money and money from bazaars. When the crown was in control of the United States, there were many countries that were running lotteries in different parts of America. In fact it was a civic responsibility to buy lottery tickets. Lottery was a civic responsibility in those days. You were buying it for the common development of the people. You have to look at it from that context. Pakistan and Egypt which have a huge Moslem population run lotteries. Even the Catholics partook in lottery. We use it to the benefit of the people. When it comes to gaming, people are scared about it. They do not want to talk about it. However, lottery started from the church.”
Harping on the gains of a regulated games/ betting industry, Maikori made an example of Lagos State where huge revenue comes into the coffers of the state government. Lagos state has properly licensed and regulated games and betting. “In some other states, there is no proper licensing; there is no proper regulation. One can make all the money without giving the state what it requires. In this era of reduced federal allocation, poor funding is an issue. Most states need to look into that area to generate income. They can look at gaming as a whole as an informal way of taxing the people.”
The industry offers mouth-watering incentives, begging for enterpreneurs who recognise and can take advantage of it. Lagos State knows that there is a big revenue to generate from it; so they tax it. States that are still waiting for the federal government are going to have problems. The betting industry provides an opportunity from which people are making money. The scenario painted by Maikori suggests that investors go to other states where the industry is not regulated, get the money and come to Lagos to get the proper license.
The standard is quite high in Lagos State. Many players in the industry go to other states where there is no taxation to make money and come to Lagos for proper licensing to boost the brand. The danger in all these is that the lack of proper licensing exposes to dangers. “Because they are not properly licensed and regulated, they are like the wonder banks. As nobody is watching them, they come, collect people’s money and run away. They are like pirates. It exposes people to fraud. To protect people from fraud, you have to make sure that anybody operating in your state is properly licensed.”
As President of the Gaming Association in Nigeria, Maikori, a lawyer saw the opportunity in gaming. It started with him consulting for one of the first companies to be licensed in Nigeria. The company wanted to go into something more exciting. They decided to invest in casino. They put in almost three million dollars. With that amount of money, it was not lost on others who wanted to invest for profit. People started making enquiries from them. Incidentally, Maikori was the only person they knew; so they kept referring people to him. That was how sports betting came. From there, he moved on to the other areas of the gaming industry. He never fails to emphasize that he struck the gold called sports betting and gaming by happenstance. Seeing the lucrative opportunities, he has since gone beyond consulting to become an investor and a regulator.
Maikori was struggling in other businesses for years, but in a matter of months, he posted very handsome returns. “Nigeria has the right population. The population is a very young population. They have access to the internet on their phones. It is a games number. There is no marketing with almost N10 billion turnover in a year. There is a margin of about 15 percent. The competition and the entry fee was so low between N200 and N300. It is a huge industry. At the last conference in South Africa, I told them that a Nigerian company would be one of the top five gaming companies in the world. I was in London when I said this at ICE. The other big exhibition is at Vegas in October. These are the two biggest conferences for the industry in the world.”
To estimate the size of the gaming industry in Nigeria, Maikori points to the fact that some companies have grown 100 percent in the past four years. “Gaming alone is worth N40 billion a year in Nigeria. PWC says betting is going to grow at 10 percent next year. Gaming is the generic name for all the other areas. Betting constitutes about 70 percent of the gaming industry. Lottery is quite popular but the only player in that area is Baba Ijebu. Lottery is also on our plate. We are about to start lottery business for a state government.”
Today, he houses a couple of related companies under a parent company called Global Gaming to conduct the business of running casinos and lotteries. The company also consults for events like the Sport Betting West Africa, while taking on capacity building for companies.
Maikori is quite excited about the financial prospects in the gaming industry. To open these project to more people, his company has put together a conference and exhibition under the name Sport Betting West Africa. Taking place at the Eko Hotel and Suites, Lagos between June 15 and 17; the first two days will accommodate a conference and exhibition, while the third day will be a master class to enlighten people about the industry and to play some games, learn about partnerships and software related to the industry.
The Sports Betting West Africa is taking place in response to demand. As an industry driven by software, many do not know that there is an opportunity for economic growth. “There is provision for internet and software development, there is power by generators, diesel supply that support them and there is a whole lot that come together to form this industry. It creates opportunities for employment. Once you get a software, you will get people you want to train for that and you are going to need a bank account. Some may pay directly to the bank.”
Maikori explained that betting is not a business is not an action on its own. It is usually rested on an event. That is the entertainment. It is not that I am just watching a sports game. I am making something out of it. The main content of the betting is the sport itself. Betting cannot exist on its own. It exists because of sporting and entertainment activities. It is secondary to the main event. Betting is a human activity; it is not something you preempt. These days, I don’t have to go to the casino to bet. There is a payment processor. I can put in my card and play. You need to get data and regulate the industry. Impose sanctions. We can’t just put our hands in our pockets.”
Owing largely to his diligence, Maikori’s reputation has gone far ahead of him. “I have consulted for people in Kenya, Rwanda, South Africa. Poker has a unique advantage. Seven people can pay $17 each and that is a four-day event. The industry can make tourism flourish. We are going to start the African poker tournament. And we have got into an advanced stage. Everything in the gaming industry portends tourism. Poker is not well known. It is seen more like an elitist thing. When we introduced it to our gaming industry, we were amazed at the way our revenue shot up. Poker is skilled based. It is not a chance game. Abroad, people earn a living from playing poker.”
As involved as he is, Maikori lives by the old axiom that you do not get high on your own stuff. He keeps a decent distance from gaming/betting and does not involve beyond the business side of things. “I have never placed a bet. I don’t trust myself when it comes to cigarettes, so I have never smoked in my life. My own is what you can’t handle, don’t go into it. There are a lot of people who trade cocaine but have never sniffed it. Never get high on your own supply. I am keeping it strictly business.”
To be sure, there has always been betting/ game industry in Nigeria. Sports betting is not entirely new. What we know as sports betting today was known as pools betting. It is still in existence. Pools is the manual, analogue way of betting. Sports betting is the digital way of doing things. Sports betting has grown out of the passion for football, expressed Nigerians’ followership of the English Premier League. Pools betting involved the use of series of papers that you just tick, but sports betting is computerised. You can generate your ticket in seconds. The ambience has changed. The way you can bet has changed. The options are different. You can decide who will score the first goal or the first corner kick. The options are many. There are over a thousand options available in sports betting. “You can win up to N10 million. In the pool betting, whatever you win you share within the pool. But in sports betting, as many as 20 people can win N20 million each. At the point of placing your bet, you already know what exactly you stand to win. In pool betting, you never know because if you win, you will share with other people in the same pool.”
Closely linked to the moral question is the perception that betting is akin to gambling away one’s fortune. Maikori insists that it is a wrong perception because there is a difference between people who are gambling and people who are placing bets. His justification is realistic. “If you go to a stock market to buy shares, you take risks. Everybody gambles. You have to make choices. Some people invest themselves into penury. Stock is seen as investment even though you have lost money. The game industry is seen as gambling. There is no difference between gambling and investment in stock market. It started from the church. It is a benign way of entertainment. Betting can be used for employment and we just need the right mechanism to manage these things.”
Addressing the fear of addiction which raises concern for many, Maikori posited that addiction does not come only with betting. “It can be in alcoholism. It comes with sex. In every field of human endeavor, there can be this level of addiction once there is no self-control. Once you are regulating, you will have proper data and you will know where to stop, where to manage it. Pools must happen whether you like it or not and technology has changed everything now. Though people may not have seen the casino physically, many are playing it on their phones. What must be done is to regulate it so that you can have sufficient data and make proper regulation. There should be medical help for those who are addicted. It is like video games. There are people who play video games in the night. You will think people are playing table tennis. Go to the golf course, people are betting, even Ludo, people are betting. In almost all levels of human endeavor, there is risk taking. Betting takes place but more importantly even now, all of us are involved in it. If you look at your phone, a network may send a message telling you it cost only N200 to play. It may cost just N50 to win a million naira or a car or a house. So, we are all involved in it at one point or the other. “
On how to deal with the pools betting phenomenon that has refused to go away, Maikori reasoned that changing times would take care of it. “The issue lies in how much investment you are ready to make. Pools betting is still there but the speed at which sports betting has grown has been amazing. If you look at it, one of the reasons why sports betting has grown is because of the viewing centres. That is the most important infrastructure that you need. Once you have a television, all you need to deploy is the internet and the software with access to the feeds. One thing that has fast tracked the sport betting business is the access to the viewing centres. It is technology. Technology has driven the new craze; this new excitement for betting. People experience the same thing in different formats. In pools betting, it is almost at no cost. At most, you make photocopies. But if you are doing sports betting, there must be software, internet, a big screen and a very conducive ambience for people to sit. Anyone going into sports betting must make sure he has the capital, the resources and the enlightenment to go there. Some would rather stick to their pools betting. Eventually, you are going to see people migrating from pools to sports betting.”