The lottery industry is an ever changing landscape, with new regulations being put in place in countries like Germany, to some part of the world fully embracing the potential of the sector.
At SBC Digital Summit Africa a panel of experts delved into the continent’s lottery industry, particularly discussing how it differs from other regions and the current landscape of the sector right now.
Whilst the panel expressed a variety of opinions relating to their firm’s specific provenances, one major take away was how each expert highlighted the importance of terminals in Africa. Richard Tannous, the operations manager & director of World Sports Betting, specifically stated how most of the firm’s lottery revenue in South Africa comes from retail.
Tannous commented: “From our side terminals are obviously very critical. I’d say that 80% of our lottery bets are probably coming from your brick and mortar stores.
“Obviously when we had the Coronavirus lockdown we saw our lotto holes drop significantly. The guys we sold to, they don’t have access to the smart devices, they still didn’t actually sign up to play online, they basically waited until we reopened again. I found that there’s a lot of informal business in South Africa with guys trading in cash and that’s the money that they used to come into the store and actually play.
“All that money that comes in store, almost all of it is actual physical cash, the guys aren’t using cards and mobile phones for payments it’s still old fashioned in that sense.”
During the ‘Lottery in Africa’ panel Westernlottobet’s managing consultant, Johnson Adewale Foye, talked about his firm’s own problems integrating into the African lotto market with the lesson emphasising the importance of focusing on fixed odds as opposed to jackpot products in the continent.
Foye explained: We actually started in Westernlottobet with the jackpots and we were actually doing almost all the games from the European market. For over one year we were just going on the negative and we need to change and then move to the fixed odds. Then we tried to also run the agency model, which the land based, and our revenue actually went from almost a very small figure to a very large figure, we went over 1,000% of the revenue that we were doing.”
“Basically for Nigeria it’s totally fixed odds,” agreed Lottomania Nigeria’s CEO, Youssef Kaado. “My company tried to do different kinds of games. We would not hit a wall, but they are not performing very well at all. We even created fixed odd games, which is a 6/80 but with a big prize and a fixed ticket price.
“In Africa, as a whole, and Nigeria the 5/90 basically dominates the whole of the whole of the market in West Africa and you feel that the people don’t want to hear anything else.”
The panel also debated the relationship between the lottery sector and the sports betting industry with William Scott, the founder of Warrenside and the session’s moderator, raising the question of whether the two entities should merge and collaborate with each other.
Andrew von Hoesslin, Bitville Gaming’s director, acknowledged the suggestion. However, he believed that the sectors should be kept separate in order to entice a greater demographic.
He commented: “Looking at the sportsbook and lottery offerings in general, it is segregated in a very different way. They are very different people, a lot of lottery players don’t actually play sportsbook. A lot of them are female and a lot of them are focused towards numbers betting and understanding numbers. Whereas a sportsbook player understands what’s going on in the sports market.
“So you’ll actually find that a lot of the lottery players can be women, they really don’t mind having a punt specifically in Nigeria, Kenya, and I know also in the DRC (Democratic Republic of the Congo), they’re rising up to actually take hold and playing these particular games.
“So in terms of merging the two product offerings together, I’d say no, I don’t really agree with that. I’d say keeping it separate often does a lot better job, especially when you’re dealing with the POS systems.”
Foye agreed with Hoesslin by also raising the point that by having two separate offerings, the operator is also creating greater credibility for itself in the long run.
“What we have actually discovered is that the type of niche of customers that we attract, within sports betting, is different from what we attract from lottery,” Foye added.
“One of the things (keeping the offerings separate) gives to you is that it gives credibility, it gives you the ability for you to be able to attract different niches of type of customers and you actually see what is going on to the sale and what payments are used.
“If you operate the products in two different ways then you can attract different types of customers under the same umbrella. That’s what we are doing.”
The conversation was rounded off by discussing the continent’s emerging markets and which regions in particular should firms in the lottery industry be looking to establish a stronghold. Hoesslin concluded the panel by highlighting three countries in particular: the Democratic Republic of the Congo, Tanzania and Mozambique.
He said: “I’m going to give you three names, it will be DRC, Tanzania or Mozambique. I feel that Kenya, it’s a saturated market. So is South Africa, there’s a lot of regulation.
“If you are attacking sort of the lawyer, LSM sort of countries with high population, and you can deal with the agency sort of infrastructure, with the POS device, and it’s got good mobile money. That’s the kind of country I’ll be looking at. So DRC, I think there’s a 50% population penetration with mobile money, which is extremely high.
“Tanzania as well, they’ve also got about 55% penetration in terms of mobile money and they’ve also got 70 million people. The reason why I like Mozambique is they’ve just opened up their laws a little bit and I think that the regulation is okay, that is the same with Tanzania. The regulation is, I would say at the forefront of technology within Africa.”
SBC Digital Summit Africa (6 – 7 October 2020) is the leading virtual conference and exhibition for the African betting and gaming industry. It features more than 60 expert speakers sharing insights and ideas about the future of markets across Africa, with all 17 conference sessions available both live and on-demand. Delegates can also enjoy a programme of networking roundtables and an interactive product display area showcasing the latest industry innovations. Click here to register for your free pass.