There's no Betting in Africa without Kenya

Those who know me since I joined this very volatile industry know I say one phrase.. "There's simply no betting in Africa, without Kenya". It's an audacious and somewhat slightly arrogantly (almost patriotic) but elevated statement. However, one that's heavy on intent, purpose & underpinned by experience. Of course, all the signs show Africa is thriving. Africa to date has the youngest population in the world, with 70% of sub-Saharan Africa under the age of 30. This high number presents an opportunity for the continent's growth and not just across betting - across all frontiers especially in Agriculture,Health, Education, Micro and Macro finance, Infrastructure, Music and Entertainement and so much more. This also applies to Kenya currently experiencing the same phenomenal youth bulge. Kenya has a youthful population with?over 80 percent of them aged 35 years and below.

The team at Tech Cabal revealed a few moons ago that presently, transactions in?sub-Saharan Africa?account for nearly 70% of the $1 trillion transacted through mobile money globally. 70% y'all. Let me repeat that 70%.The region witnessed a 40% YoY growth to land its $697.7 billion in processed payments, far ahead of East Asia and South Asia ($156.3 billion), the other regions with leading mobile money penetration. What truly stands out for me is, we been knowing Kenya is the anchor home for MoMo in Africa thanks to Safaricom's giant Mpesa brand. As at the end of March 2022, the number of M-Pesa customers was a whooping 52.4 million+ with 32 million of those being active. The value of transactions being in trillions of Kenya shillings yearly.

And with more accessible internet access that's also a large opportunity. According to datareportal's most recent February report, Kenya had / has 17.86 million?internet users,?10.55 million?social media users (19.3?percent?of the total population), 63.94 million?cellular mobile connections (active in 117.2?percent?of the total population). Those mobile connections are staggeringly impressive..possibly double handset ownership? I'll leave this to the big green team to elaborate.

These pillars make it ripe for online sports betting and gambling to thrive. And all signs show that it is. Kenyan punters may not have the high-value transactions of the Ghanians or the South Africans and it sure won't beat Nigeria's punting population. But Kenyan numbers in comparison to these 3 countries are what I call a not-so-little giant. A report by Geopoll in 2021 showed that while on average 44.4% in the other countries said they bet only about once a month, the largest portion of Kenyan respondents said they bet at least once a week. Consequently, Kenya had the highest percentage of people betting once to several times a day (34%), followed by their East Africa neighbors, Tanzania (31%) and Nigeria (30%).

Now that we've established that it'd be difficult to pass on Kenya's macro and microenvironment, and opportunities in Kenya while operating a betting brand in Africa... I'd like to delve into the basic pillars that will set you up (hopefully for success) as an operator in Kenya.

A. Product Market Fit

I learned earlier on while working at a stint with Little from Kamal Budhabhatti (Little's now CEO) that a product has to be fit for purpose, fit for its users and not a fit for you, the builder. And with sports and betting. That is no exception. Build a product that's fit for the market and validated by the customers here. Not in your other borders and spheres. What works in Nigeria or Ethiopia sure as a bad bet (like betting on Man U's recent heavy 7 loss to Liverpool, hi Arsenal fans :) ) will not work here. As a bare minimum, a Kenyan sports bettor will tell you that your product must have:

• Karibu and Referral Bonuses - a bonus that welcomes them to your platform. Thanks them for their consideration and trial set to try your product. This will entice them to move from being a registered user, to one that deposits even if it's the bare minimum and your bonus helps them get a feel of your sportsbook or virtual or casino games, or a combination of all. Referral bonuses award them to bring their friends into your platform - especially if your welcome karibu bonus works well. However If it's not an instant bonus you might as well, please close shop. Kenyans have been through tough times. We do not trust easily. So a bonus must reflect instantly, or if it doesn't - reason to churn number 1. Hello, app uninstalls!
• Instant deposits and instant withdrawals - discounted or free even better. Kenyans thanks to Mpesa and Kenya Power are used to receiving immediate and correct updates on their mobile money and electricity tokens in less than 10 seconds. A Kenyan expects that if they deposit money to their betting wallet on your platform, it better reflect instantly. And that if he withdraws his deposits or winnings, it also better behave the same way if not better. Woe unto you if they try to deposit and withdraw and the transaction does not complete in good time. They'll be baying for your blood on social media, telling all and sundry of your untrustworthiness.... rightfully so. Reason to churn number 2.
• Jackpots - this is a little dicey topic proudly brought to you by an iconic betting brand Sportpesa. They are the King of Mega jackpots. They've built part of their brand equity on the success of awarding not just mega and weekly jackpots year on year, but also on the bonuses for close to correct predictions of either 17 or 13 selections. They've recently revamped their jackpot offering to increase the breadth of possible winnings from 13, 14,15,16 and 17 correct predictions with grand amounts of a base of 20 million KES to now 290 million KES. Now you don't have to copy-paste that format or their amounts. That'd take a larger significant outlay of your capital tied up as a guarantee for honoring payments. I'd recommend starting with a weekly jackpot with good pricing and a good bonus spread. Then build it incrementally as you grow its acquisition and retention. No jackpots? No problem. Reason to churn number 3.
• Virtual football league games, casinos and aviators are now main stays that give Kenyan punters another source of play especially when there are no scheduled high-profile football games in the English Premier League. La Liga, Ligue 1 and Serie A. Don't have any of these yet? Reason to churn number 4.

B. Invest in marketing and not just digital marketing. There's been a tendency by betting brands to overly and heavily rely on digital paid media and martech to drive their acquisition. Of course i vouch for these channels. Facebook's active users in KE stand at 12 million plus. I also cannot discount Google's SEM and Display Ad Networks that reach almost of all KE's mobile and desktop traffic. And let's not forget Opera's insane reach on preloaded smartphones and feature phones. Plus Eskimi's amazing supply and demand platforms for programmatic advertising. They are good but they are even better when augmented with channels that reach Kenyans deep and wide. Radio is King in this market. My good friend John (JP) Murunga DipM, MCIM (we call him JP) at Geopoll published their findings in 2021 (JP please forgive me if there's a more recent study, I've totally missed it). Radio was the most accessed form of media, with about 9 in every 10 respondents in the survey having accessed radio in the last 30 days. I usually say that for every TV in Kenya, there's a possibility there are 2 radio sets. Find a balance between your media channel mix for acquisition and brand building but do not over-index on one channel, else you'll feel like you are winking in the dark.

C. Invest in offline brand presence - your customer lives and works in the trade. They are bodaboda riders, hustle business owners in food, retail, service, and matatu crews. They are not always online and even if they are it's only a portion of their day. Paint your towns with your brand colors. Power their hustles with branded tools of the trade such as reflector jackets, branded parasols, branded open-air market tables and so many available touchpoints. The risk of doing this is, they might walk away with your branded touchpoint and take it elsewhere, or even sell it to someone else - but that's a small price to pay because your brand will still be visible.

D. Give back to your communities & champion for responsible gambling - identify projects for good. Gambling and betting take from communities. And it takes more than just money. Let's be honest, irresponsible betting and gambling have pervasively taken away livelihoods, broken up homes and for some, taking lives. It is only right to give back, it is a need and a huge responsibility to give back. Champion for education, health, environment, and sports (both top flight and grassroots). Just do something BUT do it well. Don't donate and paint a tank then walk away. Dig a borehole for that community to have endless supply of water. Don't give out food packs or handouts, those won't last beyond a week. Create economic activities like capital for car washes, farming that provide for those youth to fend for themselves after you leave. And move beyond just saying you are a responsible gaming company. When the most responsible thing you'll do is a KYC process to validate that under-18s are not playing or your slapstick compulsory "Play Responsibly" lines on your social media posts and artworks. Do better. Go hard. Or don't even show up at all.

E. Be tax compliant. Now for fear of sounding like a government supporter, we really must do better as an industry. The days of tax evasion, and tax avoidance is long gone. Not with the big taxman having almost completed compulsory tax integrations. Anecdotal feedback suggests that this intergration is paying off. KRA's daily tax remmitances has grown in leaps and bounds. So where exactly was that money before all this? Your guess is as good as mine :) . If you operate in Kenya as with any sovereign state, you must pay all pre-requisite taxes and revenue taxes thereafter. Not saying that it's easy. I do not agree with the Kenya government's stand to tax a stake, this only encourages punters to seek no tax or tax friendly markets across our shores. I however do vouch for the aggressive 20% WHT on winnings. However, to pay tax we must.You must. Some betting brands over the last 3 to 6 months have had to close shop and its said that they had large tax evasion pitfalls.

F. Be in bed with the regulator (i say this tongue in cheek). I mean, build relationships with the regulator for them to understand your business, your leadership teams, and your vision for the gaming industry. It truly costs nothing but time and effort. I fear that many operators, after receiving their hard-earned license, only engage with the regulator a month before licensing renewal. Engaging your stakeholders is a great PR strategy to not just save face but to also champion joint initiatives like contributing to the Responsible Gaming initiatives the government champions for through the BCLB. Partner with your regulator and it'll set you apart from the crowded pack.

There's so much more to this industry than meets the eye. I hope this gives a little view into my world for the last almost 2 years. There's no betting in Africa without Kenya. Take that to the bank. Especially if you claim or are claiming to be a pan-African brand.

Enjoy the links to my references below:

1. https://techcabal.com/2022/10/11/mobile-money-is-surging-in-africa-as-more-disruption-occur/
2. https://tgmresearch.com/gambling-sports-betting-market-research-in-kenya.html
3. https://www.geopoll.com/blog/q1-2021-media-stats-kenya/
4. https://datareportal.com/reports/digital-2023-kenya#:~:text=There%20were%2017.86%20million%20internet%20users%20in%20Kenya%20in%20January,percent)%20between%202022%20and%202023.

PS: As always, please note that views here are entirely my own and do not represent any entity except my mind. Let me know your thoughts.

#gambling #africa #betting #brand #africabrands #sports #sportsmarketing

Klaire The Brand Titan.