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Africa online gambling boom fuelled by mobile growth

Content Team September 19, 2022

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Africa online gambling boom fuelled by mobile growth

Africa is home to a generation of users that have inadvertently skipped the desktop computer era and are now looking to mobile devices as their main source for everything online, which offers significant potential for the i-gaming industry.

According to Statista, in 2021 the number of mobile internet users in Africa was an estimated 481.48 million, with users projected to reach 667.65 million by 2025. This article will examine what’s driving this growth and the resulting opportunities for the i-gaming industry.?

Ideal demographics

The continent of Africa has a population of more than 1.3 billion people with an average age of 19.7, making for a deep demographic of young users who are mobile natives and ideal consumers of mobile-related products. According to Statista, last year Africa accounted for more than 11 percent of internet users worldwide, predominantly accessing the web on their phones or smart devices. This trend is expected to grow as phones and cheaper broadband become increasingly available to the wider public.

This increase in mobile spending is part of a wider African e-commerce boom that has been transforming the market since 2019.? According to the World Economic Forum, Africa’s e-commerce revenue increased by 52.7 percent in the year between 2019 and 2020.?

Consultancy firm McKinsey has predicted the African e-commerce market will hit $75 billion in revenue by 2025.

A further beneficial factor for the i-gaming sector is the popularity of mobile money. In the past, Africa struggled to find a solution for large segments of the population who were financially disenfranchised, meaning they didn’t have direct or easy access to banking, credit or debit cards. Under normal circumstances, this would be a major barrier that could potentially block the growth of online gaming, due to the lack of effective solutions for depositing or withdrawing money.

However, in Kenya in 2014, a mobile payments solutions company called M- Pesa established a streamlined online interface specifically for users to fund accounts. This catalysed a boom in the mobile betting market, which began in east Africa before spreading across the continent.?

Mobile payments boom

For the first time, players were able to place bets on matches from around the globe within seconds. By 2018, according to figures published by Finance Uncovered, Kenyans were spending $1.3 billion a year to place bets on the M-Pesa platform, which was more than the annual budget of the country’s Ministry of Health.

By 2022, the use of mobile money has become an everyday occurrence and is a fundamental part of online gaming. African operators of sports betting services have partnered with top mobile phone operators to link mobile-money services such as M-Pesa, Orange Money, and Airtel Money with their sports betting products. This trend has continued to grow to the point where today, according to IT News Africa, players now spend more than US$1.5 billion per year on betting via these ground-breaking online platforms, clearly demonstrating Africa’s ability to advance in the mobile gaming sector.

When exploring the growth opportunities flourishing in the African market for betting operators, it makes sense to focus on the sub-Saharan regions, and even more specifically South Africa, Nigeria and Kenya, which are the largest gaming markets.

Africa Growing Pains

Despite the fertile conditions for mobile gaming growth in Africa, there are still some intrinsic obstacles that must be overcome before the continent can fully realise its true potential.

One of the biggest issues impacting growth is the price of mobile data and the limited data coverage available. Although mobile internet usage is on the rise due to steadily declining data prices and access to cheaper smartphones, Sub-Saharan Africa still has some of the most expensive data in the world. The region is home to six out of the ten most expensive countries? for 1GB of mobile data, with the highest priced being Equatorial Guinea.?

According to the Worldwide Mobile Data Pricing 2021 report from Cable.co.uk, Sub-Saharan Africa ranked as the most expensive region with the average price for 1GB of mobile data coming in at $6.44 compared to $2.72 on average across Western Europe.

Added to this is the fact that many mobile users in Africa are still accessing the web on dated devices. They are still operating on Edge, 2G and 3G networks, which have a much slower speed when compared to European customers. This makes it extremely difficult to play games that use a lot of data, limiting what operators are able to offer as part of their online portfolio.

Sports betting dominates

As a result, online gambling in Africa has been dominated by sports betting companies, which have the advantage of a lightweight product (data consumption-wise). This is a huge advantage when, according to The Guardian (Nigeria), 50 percent of all African adults regularly bet on sports.

Although still expensive in global terms, the cost of broadband data has been declining, which is opening up the market for more modern online casino products.?

Slots are the most popular mobile casino game type in Africa. This vertical has proven to be a favourite of the African players mainly because of the better-quality designs and higher pay-out rates (RTP) than other online casino games. Most African players are still new to the product and still learning how they work. The fact that mobile slots are so simple to understand, easy-to-play and include compelling themes makes them perfectly suited to an enthusiastic but inexperienced new mobile casino player.

Looking to the future

With over a billion people and some of the world’s youngest populations, Africa offers both immediate and long-term opportunities and the market is still far from being saturated.

What we’re currently seeing in African mobile gaming is just a taste of things to come. Considering the number of users covered by 3G and 4G networks has doubled over the last five years and the cost of both data and smartphones has halved during the same time, it’s easy to see the possibilities opening up for i-gaming companies.?

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