Africa Focus
Understand the regulatory landscape Money matters
The first and most important consideration is to gain a clear
picture of the regulatory landscape and to understand what
laws and frameworks are in place. Ascertain which countries
are already regulated and what the position is in each province,
then assess which countries are close to regulating or have
a clear position on legality. If licences are available, what
conditions do they come with and what products can be offered?
Every market is different and care should be taken for each
jurisdiction; a multiple set of laws apply even within jurisdictions
in states or provinces.
In most cases, foreign operators will be welcome, but some
countries will be more receptive than others. Having experienced
personnel on the ground will be invaluable, whether that takes the
form of partnering with a local land-based operator, a joint venture
or employing key personnel from the region.
Operators and suppliers must also consider the cultural, legal
and political environments. Some African countries are turbulent in
this regard, with ever-changing leaders, laws and liabilities. In Kenya,
for example, the government recently introduced a new law that
means operators now pay 35% tax on gambling. This change has
the potential to turn a profitable online gambling business into
a loss-making one. Mobile may be the preferred banking method across the region,
but operators and suppliers looking to enter Africa must educate
themselves as to the financial structures and institutions in place.
Are banks local, national or international? What AML and CFT
protocols are in place and are they the same as in established
markets such as Europe? Most importantly, do they offer
sufficient protection?
Choosing the games
Businesses need to look at how players engage with online
gambling products and the games they prefer to play. Across Africa,
for example, mobile dominates. with an average smartphone
penetration rate of 43%; in Kenya it is upwards of 90%. Most people
now use their smartphones to manage their everyday lives, as well as
to wager online. When it comes to types of gambling, sports betting
reigns supreme.
The spread of mobile devices has been underpinned by telecoms
companies providing low cost products and services to users. As a
result, a mobile-driven economy has emerged; companies such as
Konga, Jumia, Iroko, hellofoods and flowers.za have all used mobile
ecommerce platforms to target the younger population demographic
across the continent which in turn has driven revenues.
At the heart of this smartphone economy is mobile payments.
In Africa, a huge percentage of the population does its banking via
mobile devices without holding a traditional bank account. M-Pesa
is one of the leading mobile money transfer providers and accounts
for more than 50% of all transactions in Kenya. Visa and Mastercard
are also becoming more widely available.
Online operators already live in the region have had to adapt their
payment wallets to meet these needs. Brands such as SportPesa,
Betway, Betin, Mlotto and Bet365 are among those offering mobile,
USSD and online payments to their customers. Bitcoin and other
cryptocurrencies are also becoming increasingly popular in African
markets, particularly when it comes to online gambling.
“In Africa, a
huge percentage of the
population does its banking via
mobile devices without holding a
traditional bank account”
Operators should also assess the stability of the country’s
currency and the process they must follow in order to repatriate
funds. International businesses regularly move funds from
accounts held in one country to accounts held in another; this is
usually straightforward, but restrictions can be enforced in some
jurisdictions. Make yourself aware of these and what impact they
may have.
Player preferences will differ vastly from market to market. Prior
to regulation in New Jersey, for example, it was thought poker would
be more popular than casino but that has not been the case. In
Africa, we know sports betting dominates, but pool betting jackpots
and virtual sports are also enjoyed by a lot of players. In some states,
punters like to wager via their mobile devices, but in others they still
prefer to play at land-based bookmakers.
Work with regulators
The landscape in most African countries is forever changing,
which is why we believe operators and suppliers looking to
launch in the continent should work with, and obtain a licence
from, established regulators prior to entry. This means they can
assess the situation, safe in the knowledge they are operating to
internationally-recognised gold standards.
Regulators can also help prepare businesses ahead of launch.
The Alderney Gambling Control Commission (AGCC), has been
forging relationships and partnerships with key representatives
from governments and regulatory bodies, as well as local operators
and suppliers. Africa is very much on the brink of the mass adoption
of regulated online gambling, and by taking a sensible
and considered approach, and with the right licences and
approvals, operators and suppliers can capitalise on the
undoubted potential it has to offer. An AGCC licence can help
pave the way.
i GamingBusiness | Issue 112 | September/October 2018
47