The Emerging Online Gambling Market in Africa
Africa has become an increasingly appealing market for investors in the iGaming industry in recent years. Starting a gambling business is notably more affordable in Africa compared to other global jurisdictions. The continent’s sustained economic growth, rapid spread of affordable mobile broadband, and the willingness of local governments to regulate online gambling to boost revenue make Africa a unique market opportunity.
Home to over 1.3 billion people spread across more than 50 nations, Africa is the second-largest land area in the world. According to Statista, the online gambling market in Africa will reach $1.85 billion by the end of 2024, with a projected annual growth rate (CAGR) of 6.28% from 2024 to 2028. These forecasts indicate that the expected market size will reach $2.47 billion by 2029, showing steady growth in the gambling sector.
Increasing levels of interest in sports are driving growth in the betting sector, with the online sports betting market expected to reach a market size of $860 million by the end of 2024.
African online gambling is currently undergoing a significant transformation, presenting new challenges and opportunities for industry stakeholders. This exciting journey is only just beginning, promising a fascinating and transformational adventure.
Review of Online Gambling in Africa
South Africa, Nigeria, and Kenya are the three largest gambling markets in Africa. We’ll take a closer look at these countries, as well as three other key markets – Ghana, Uganda, and Tanzania.
South Africa
South Africa’s gambling industry is the largest market on the continent. Online gambling Gross Gaming Revenue (GGR) in the country is projected to reach $828.50 million by the end of 2024.
Recent studies reveal that nearly 75% of the population have participated in gambling at least once in their lives. Supposedly half of South African adults bet on sports regularly, with the majority betting at least once a month. The same surveys show that more than half of the population consider gaming to be a “fun pastime”. The most popular sports for betting are soccer, cricket, rugby, and golf. The online gambling market is expected to reach 4.2 million participants by 2029.
It’s important to note that online gambling is illegal across the country, aside from the online branches of land-based betting shops. The 2004 national gambling law categorizes “interactive games” as illegal, including bingo, poker, and other online games like slots. Only online sports betting and horse racing are legal, and land-based casinos have been permitted since 1994, with only four major casinos offering more than 180 card game tables and numerous slots.
Under current South African law, funds won at online casinos are considered illegal. Banks monitor such financial activities, and players can be subjected to serious penalties.
Nigeria
Nigeria’s GDP in 2022 was $472 billion, making it the highest in Africa. This impressive figure is due to the country’s population of over 200 million, which is almost double that of any other African country.
Nigeria has the second-largest gambling sector in Africa. The country’s economic potential makes it highly attractive to online casinos and sports betting providers. The lifting of the gambling ban in 2004 stimulated the growth of the iGaming business.
About 30% of Nigeria’s population bets on sports daily, equating to approximately 60 million people between the ages of 18 and 40 actively following sporting events.
The first legitimate online casino was opened in 2013, which is a relatively recent milestone in global iGaming development. The growth of online sports betting and gambling is also supported by the development of local payment systems.
Kenya
Kenya, home to approximately 55 million people with English and Swahili as official languages, is one of Africa’s leading economies. Gambling is fully legal, freely promoted, and highly popular.
Most forms of gambling are legal in Kenya, although online casinos are still developing due to the slow spread of mobile internet access. This is viewed not as a negative aspect but as an opportunity to attract new players. The market is expected to grow at a Compound Annual Growth Rate (2024-2029) of 5.60% to reach $130.90 million by 2029.
The gambling market in Kenya is mostly focused on betting, typical of many African countries. Soccer, especially European league matches, is the most popular sport for wagering.
Tanzania and Other Markets
Tanzania, with over 65 million people, is actively developing its gambling industry, including online casinos and sports betting, driven by the spread of mobile internet. Ghana, with 33 million inhabitants, allows all types of land-based and online gambling, with projected market revenue reaching $57.42 million by 2024.
Uganda, with 47 million people, has over 670 online casinos and betting shops. Sports betting, particularly soccer, remains the most popular form of gambling, with the market growing as mobile internet and payment methods improve.
Licensing Costs: An Example from Uganda
License costs in Uganda vary depending on the type of activity and company ownership:
- Local betting shop license: approximately €2,300
- Foreign betting shop license: approximately €4,600
- Local casino license: approximately €4,600
- Foreign casino license: approximately €11,700
Operators must also make substantial security deposits: €46,000 for a sportsbook and €117,000 for a casino.
Unique Challenges of Launching iGaming in Africa
Launching an iGaming project in Africa requires understanding several unique features:
- Thorough research of country-specific legislation
- Adaptation to markets different from Europe and Asia
- Dealing with older technology and limited internet stability
- Creating simple, straightforward promotional campaigns
- Ensuring stable gaming sites and payment systems
- Establishing a physical presence in the country
- Utilizing traditional advertising methods
- Adapting to a young consumer base with specific cultural preferences
- Preparing for potentially delayed return on investment
The Mobile Revolution and Online Gambling
The rapid growth of mobile technology has been a game-changer for the African gambling market. Smartphones have made gambling more accessible, allowing players to bet from anywhere using just a mobile device.
Mobile gambling offers unprecedented convenience, eliminating the need to visit physical casinos or betting shops. As smartphone penetration increases, the mobile gambling audience continues to grow.
Regulatory Landscape
The regulatory framework for online gambling in Africa is complex and evolving. In some countries, traditional gambling faces heavy restrictions, driving demand for online platforms. The absence of land-based casinos in many regions has further propelled online gambling’s growth.
While gambling laws remain unclear or outdated in many areas, most African countries maintain a favorable attitude toward the industry. Seven countries prohibit gambling due to religious beliefs, primarily in regions with significant Muslim populations.
Countries like Kenya, Tanzania, and Uganda are actively working to combat fraud and improve industry regulations.
The Future of Online Gambling in Africa
The potential for growth is immense, driven by:
- Emerging middle class with rising incomes
- Increasing internet access and affordable technology
- Growing interest in Western entertainment models
- Improving gambling taxation and legislation
- General acceptance of gambling across various demographics
Conclusion
The African gambling market stands on the brink of a transformative era. With a population of 1.3 billion, a growing middle class, and increasing digital connectivity, the continent is poised to become a key player in the global gambling market.
The potential for regulation and growth mirrors recent developments in markets like Brazil, suggesting an exciting future for iGaming in Africa.
