ICE on the ground – insights from day two
EGR sits in on key panels from the industry event covering opportunities in Africa and US regulation
New horizons: ‘African markets can unlock at least $3bn in revenue from untapped players’
Key regulated African markets can generate at least an extra $3bn in yearly gross gaming revenue (GGR) by accessing untapped players, according to Velex Advisory Group.
Speaking at ICE London, the consultancy’s managing partner Olatunji Idowu referenced Astute Analytica’s estimation that GGR from Africa’s regulated markets is set to increase to $6.7bn by 2030.
GGR is set to steadily increase across the remainder of the decade, with the key markets including South Africa, Nigeria, Kenya and Ghana.
The South African regulated gambling market was valued at $2.2bn in 2021, and that figure is projected to rise to more than $4.5bn. Idowu said the current value is underestimated and that the actual GGR number is likely to be higher, while 44% of its over-18 market is untapped and could add an extra $1.54bn. South Africa’s population is 59 million and about 35% of that population is over 18.
Nigeria has a population of more than 200 million, with about 41% being over 18. The market is currently generating $2bn GGR annually, but Velex estimates there is an untapped market worth an additional $1.28bn, with 39% of the over-18 market classed as inactive bettors; Kenya also has an untapped over-18 market of 39%.
In Ghana, annual GGR totals about $300m, but the market is half its potential size as there is also an estimated untapped market worth $300m. About 30% of the approximate 32 million population is above 18 years, but 50% of that demographic are inactive bettors.
Idowu stressed African markets are becoming more mature despite black-market operations, and other sports aside from football are growing in popularity for serious players.
Idowu told EGR: “The region still has that problem with illegal operations, but what we strongly advise is to come into the market, because each of the markets are becoming very sophisticated with sufficient revenue.
“There are some very sophisticated players who move all over. Football is still number one, but they are moving to other games like basketball and handball.”
New Jersey DGE director: “People thought we were a soft touch, but licensing takes time”
New Jersey Division of Gaming Enforcement director David Rebuck has stressed the need for international operators to understand the complexities of launching in US markets.
New Jersey is among six US states that operate regulated online casino, with the market opening in 2013.
The Garden State was also the first to launch a fully regulated sports betting market outside of Nevada when PASPA was overturned in 2018.
Speaking on a panel at ICE London about the US legal landscape, Rebuck was asked about some of the challenges companies face when entering the US market from other parts of the world.
Rebuck said: “A lot of operators from foreign countries came in and had to understand the US marketplace was not an unpleasant one. Most states have mandated by law the relationship between B2B/B2C companies coming in from outside the country must partner with an existing casino, racetrack, tribe or even the state itself.”
Rebuck, who has held his position as director of the DGE since 2011, also outlined the need to work with the right representatives on the ground in the US when applying for a licence.
“The need for partnerships and contractual negotiations is not only complicated in terms of licensing, but you need to have a very good representative to negotiate the deals,” he said.
“What I got frustrated by was some companies assumed the US was a soft touch. People thought they could flick a switch and operate in 48 hours. There are protocols and contracts you can’t work without. Now, if a company wants to come in and they don’t understand that, then they really haven’t done their due diligence. Our bark is bigger than our bite and people want these relationships,” he added.
