Sports betting is booming in markets across Africa. Aside from traditional sports, young, tech-savvy African players are increasingly turning to virtual sports, attracted by limitless betting opportunities. Keep reading to learn more about the rise of virtual sports in Africa.
Driven by advances in technology and a growing population with a passion for sports — particularly football — the African market is experiencing a betting boom. But in addition to traditional sports betting, African players are becoming fans of virtual sports.
Kenya
After an extended dispute over taxes, Kenyan authorities recently lowered the betting stakes tax to 7.5% to lure sportsbook operators back to the country.
Nigeria
An estimated 60% of Nigeria’s 200+ million citizens participate in some form of betting.
South Africa
South Africa accounts for nearly 50% of the continent’s total gaming revenue.
Ghana
During the pandemic, the Gaming Commission of Ghana allowed licensees to offer online sports betting products.
Tanzania
The government of Tanzania legalized virtual sports in early 2021.
What are virtual sports?
Virtual sports are software-generated simulations of sports events. The events are shorter than live sports ones, usually only 90 seconds to a few minutes long, and represented with highly detailed graphics reminiscent of top-quality video games. Developers use CGI (Computer-Generated Imagery) technology to render the action in exquisite detail. Nonethless, what is beneath the surface is just as stunning. Both realistic graphics and realistic odds define the best virtual products.
Virtual sports are seemingly no different from a slot machine, as they are based on an RNG. However, there is a fundamental difference: the RNG creates a whole range of outcomes, and players are offered realistic odds to evaluate as they make their bets.
And aside from realistic graphics and odds, there can even be realistic results. The Virtual Grand National, first launched in 2017 as a companion to the UK’s flagship horse-racing event, has consistently produced a mix of top finishers similar to those in the real event. In 2018, the simulation even predicted the real winner, Tiger Roll.
Virtual sports vs. esports vs. real sports
There are some critical differences between virtual sports, real sports, and esports. Traditional, real-life football matches only take place at regularly scheduled intervals. A real-life match lasts 90 minutes and sometimes happens only once a week. On the other hand, virtual football matches, on the other hand, take place constantly and last only a few minutes, with results published immediately.
The terms “virtual sports” and “esports” are sometimes used interchangeably. However, these are two distinct betting products. While virtual sports are simulations of sporting events, esports competitions pit professional gamers against each other in games like DotA 2 and Counter-Strike.
Why do African players like virtual sports?
Virtual sports appeal to tech-savvy, football-loving bettors who prefer to make larger volumes of smaller bets. That happens to overlap almost perfectly with modern African bettors. A look at players’ age and affinity for technology can show why the widespread enthusiasm for sports betting includes virtuals.
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Youth is a defining feature of African demographics. According to data from UN-Habitat, 35% of the continent’s population, or around 420 million people, is between the ages of 15 and 35. Sports bettors across the globe tend to be on the younger side, even more so in Africa. A recent survey by GeoPoll found that 54% of sub-Saharan Africans between 17 and 35 had at least tried betting.
African gamblers often prefer betting via mobile. According to GeoPoll, 75% of gamblers place bets using their mobile phones. As rates of mobile penetration skyrocket across the continent, in some countries, it has become more likely that sports bettors will have a mobile phone than it is that they will have a laptop.
For younger generations who have grown up in the world of high-quality graphics and video games, virtual sports could be their first sports betting experience. Players who are new to navigating the seemingly complex system of odds can see virtual sports betting as a training ground for the real thing. Virtuals provide a higher frequency of opportunities to lay down a bet so that players can get used to the systems of odds.
For experienced bettors, virtuals offer the limitless betting opportunities they have been dreaming of. Virtual sports bettors often stop making an effort to watch the event within a few weeks; the long-term draw is the thrill of staking and winning money. This is the experience that players love, as much if not more than the sport itself: playing the odds and testing their gut instinct.
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Most sports bettors in Africa place bets very often but in small amounts. In Kenya, for example, most bettors bet at least once a week — and some even daily. According to a 2019 report by IPSOS and GeoPoll, the average Kenyan aged 18-29 spends KES 1,550 ($14/€12) per month on betting. The low-volume, high-frequency betting habit is perfectly suited to virtual sports betting.
There is also legal status to consider. In Nigeria, for example, games of skill are permitted, while games of chance are not. It takes skill to evaluate the odds before making a wager, so Nigerian bettors can legally bet around the clock on virtual sports.
Virtual sports fit the lifestyle and mindset of young, tech-savvy gamblers
And the final reason that virtual sports are growing in popularity is how well they fit the lifestyle of the modern player. With 24/7 availability, thousands of events per day, and the fact that virtual sports never have an off-season, there is never a shortage of events to bet on.
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Virtual sports in the era of COVID-19
Operators the world over were left scrambling when live sports fixtures evaporated in the face of COVID-19. In the absence of live sporting events to bet on, players turned to whatever alternatives were available. Esports, online casino games, and virtual sports all saw a boost.
During the first wave, Martin Wachter, CEO of leading virtual sports provider Golden Race, announced that over 100 operators had signed up to integrate virtual sports products into their platform in just the first three weeks of the pandemic, showing widespread recognition of the product’s utility as a stopgap measure.
As the pandemic swept over the globe, bookmakers in African markets like Kenya and Nigeria were not spared the cancellation of betting events and turned to other alternatives to ride out the crisis. The Gaming Commission of Ghana allowed licensees to offer online products to compensate for lost revenues. Sportsbook operators in Nigeria were kept afloat by offering virtual sports betting products.
One strong possibility? Players who tried virtual sports betting during the pandemic could very well develop a taste for it and keep betting on virtuals long into the future.
What to expect in the future?
Any formula for success will hinge on treating each country individually. Virtuals also allow providers to tailor their products to the market. Football is an obvious choice, but the mix of other products like greyhound and horse racing will depend on regional tastes.
Licensing in African online gambling markets in 20224
Providing the high-frequency, short-duration option of betting on virtuals matches most gamblers’ fast-paced lifestyles. With technological improvements, rising sports betting revenues, and a young and growing population in Africa, it is no wonder operators consider the continent a great market for virtual sports betting.
In fact, Golden Race CEO Martin Wachter stated in 2019 that he was fully confident that revenues from virtual sports could outstrip those from traditional sports betting.
The potential effect of virtual sports on the sports betting market can be compared with the way streaming technology disrupted the entertainment business. With unlimited entertainment available in the comfort of their own homes, the cinema for a new release has become less of an event than a chore. Similarly, with virtual sports events constantly available, young African players could see waiting for a live match as a waste of time.
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When studying the growth potential for virtual sports betting — or any other product — in Africa, it is crucial to avoid assuming that development in Africa will progress along the same path taken in other parts of the world. Understanding the future of the African betting market will hinge on the analysis of its current state, not trying to replicate the development of the market in areas such as Europe or Asia.
Investors can expect African markets to take their paths to development. Consider communications. Mobile penetration is skyrocketing across the continent, approaching 100% in Kenya and reaching similar levels in other countries. Whereas the Western world got used to traditional telephones before adjusting to the next stage of the technological revolution, for many Africans, the landline was rendered obsolete before it was even introduced.
And as we mentioned earlier, there is nothing African bettors love more than using that mobile connectivity to bet on sports — and increasingly, virtuals.
Slotegrator offers a range of products and services that will help you get your business going fast. If you are interested in opening a sportsbook in Africa or integrating virtual sports products into your online betting platform, request a free consultation to see what we can do for you.
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