According to Slotegrator, advances in technology, economic development, and smartphone penetration are three main factors for growth across the country, making Africa the next land of opportunity for the igaming industry. Africa has a peculiar collection of circumstances that will undoubtedly result in the online gaming market rapidly expanding in the coming years.
Many developing economies call it home. Although the current pandemic has stifled inflation, the gross domestic product of Sub-Saharan African countries has shrunk at a much slower pace than that of most other countries. Prior to the start of Covid-19, the region’s GDP was expected to increase by 3.6 percent in 2020, which, to put it in context, would have been three times the Eurozone’s expected growth for the same year. In any case, recovery is on the way, with GDP growth for 2021 expected to be above 3% for the first time.
Years of uninterrupted economic growth have resulted in a growing middle class with increasing purchasing power, which serves as a stimulus for global investment and further economic development. Africa is now on track to become the only continent with higher-than-replacement-level birth rates and a positive demographic dividend (the ratio of working-age people to their dependents). The demographic dividend will be a further blessing to the region because, if local economies can scale up to accommodate the growing active population, increased productivity can rise.
Technology advancements are the last piece of the puzzle that makes the area so appealing. Though African countries are still catching up in terms of internet adoption, things are quickly improving thanks to modern infrastructures that are making mobile broadband access more accessible. Around 2014 and 2019, the number of people using mobile broadband more than doubled, and penetration is rapidly expanding. Three-quarters of Sub-Saharan Africans have at least 3G broadband, and half have connections to 4G speeds. In the past five years, the cost of using the internet and using handheld devices has almost halved.
From the viewpoint of iGaming industry investors involved in the field, the picture is rosy: a developing populace with increasingly rising disposable income and inexpensive high-speed internet access. These markets aren’t completely untapped, but they’re still not completely saturated. Kenya and South Africa are undoubtedly the most successful, but other heavyweights such as Nigeria, Ghana, and Tanzania provide enticing opportunities for operators with small marketing budgets. Furthermore, saturation is limited to the sports betting side of the market, which is Africa’s most common type of online gambling. Due to this fact, Nigerian online crypto casinos failed to gain momentum in the area due to a history of low internet coverage and high data costs. Because of the above technical advances and operators’ increasing understanding of the need to include lightweight, mobile-friendly games specially designed to deal with the limitations currently in place, the segment is expected to expand steadily in the future.
The most popular gambling brands in Africa are currently local, despite the fact that they are backed by international investors. It is critical to recognize that gambling goods, like any other service, must be tailored to the needs of the local market. This entails adapting not only the style and content of marketing material but also the product itself, particularly as the competition grows.
We’ve already discussed the need for casino games that cater to African markets’ infrastructural constraints, and sportsbooks are no exception. It’s understandable that nations with diverse sporting histories will have punters with equally diverse betting tastes. In South Africa, for example, bookmakers must prioritize rugby and cricket events, while in Nigeria, football takes precedence. Offering competitive odds on the events that matter most to local audiences is likely the most effective way to increase customer acquisition and retention, particularly in markets where savvy bettors are keen to check out the best offers possible, such as Nigeria or Kenya.
The status of regulatory mechanisms in the area is something to think about before entering the African market. Just a few nations, mostly in the continent’s north, have outright bans on gaming, and only a few have robust laws in effect. This is set to improve in the not-too-distant future, with extensive industry control undoubtedly on the horizon in most of Africa. Thanks to technical advances, blanket prohibition is becoming almost difficult to maintain.
As a result of national lockdowns, players have been moving from physical to online gaming venues, exacerbating the problem. Meanwhile, local policymakers are motivated by the need to monitor the cash flows associated with the industry: because of the region’s unique characteristics, authorities are particularly concerned about the potential for money laundering and terrorist funding. We should anticipate regulatory frameworks based on internationally recognized public practice, but tailored to each local jurisdiction, resulting in a fragmented market in the future.