Virtual Sports in Africa: A Booming Market

Introduction

Driven by advances in technology and a growing population with a passion for sports, particularly football, the African market is experiencing a boom in sports betting. The gambling industry was estimated to be worth roughly $37 billion in 2018, and projections indicate that number will continue to rise in all of the continent’s biggest betting markets. As the boom in sports betting continues, gambling industry experts are exploring a new frontier in online sports betting: virtual sports.

Virtual sports are software-generated simulations of sports events. The events are shorter than live sports events, usually only a few minutes long, and bookmakers often provide odds for punters to bet against. The outcomes are decided by a random number generator.

In order to understand the potential of virtual sports betting, it’s necessary to get a grasp of the African sports betting market. 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, and even more so in Africa. A recent survey by GeoPoll found that 54% of sub-saharan Africans between the ages of 17 and 35 had at least tried betting.

African punters often prefer betting via mobile. According to GeoPoll, 75% of punters place bets using their mobile phones. In some countries, it is more likely that sports bettors will have a mobile phone than it is that they will have a laptop or other computer. A survey by GeoPoll found that on average, Kenyan bettors spent $50 a month betting on their phones. Rates of mobile penetration are skyrocketing across the continent.

In this academy article, we’ll analyze the virtual sports betting in Africa in detail, and look at how the exploding sports betting industry could provide fertile ground for a virtual sports betting revolution.

Demographics - who virtual sports appeal to and why

The potential for virtual sports in Africa boils down to some simple facts regarding who virtual sports appeal to.

To the uninformed observer, the appeal of virtual sports might not be immediately apparent. Why bet on a virtual event when you could wait for the real thing? Part of the answer is simple: because you would have to wait.

Traditional, real-life football matches only take place at regularly scheduled intervals. A real-life match lasts 90 minutes, and sometimes happen only once a week. Virtual football matches take place constantly and last only a few minutes, with results published immediately.

This is one of the key appeals of virtual sports. With the matches’ short durations and instantly available results, players can hope for immediate gratification with almost no time commitment. This fits the lifestyle and mindset of young, tech-centered punters. Provided with an option to bet 24/7, the idea of waiting for an event that doesn’t fit into your personal schedule becomes ridiculous. With virtual sports, the schedules fit the punters, instead of the other way around.

Virtual sports fit the lifestyle and mindset of young, tech-savvy punters

Virtual sports bettors and African sports bettors overlap significantly. Whereas older generations are sometimes skeptical of new technologies, the millennial generation was essential born with smartphones in their hands. Betting on virtual sports appeals to those who are young and tech-savvy; most African punters are young men who bet via their mobile phones. 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.

Virtual sports also allow punters to bet on sports that are out of season. With increasing numbers of online sportsbooks offering virtual sports, punters can always bet on their favorite sport.

Why virtual sports over slots and other sports betting

The burgeoning virtual sports market is more than a passing fad. Virtuals have a number of distinct advantages over live sports and online slots, and there are a few reasons why virtual sports could become a dominant form of betting in the future.

Virtual sports mimic live sports, but the focus is on the aspect of betting. The best online sportsbooks offer real odds set by real bookmakers for their virtual sports products, regardless of the fact that the event is virtual. This is the experience that punters love, as much if not more than the sport itself: playing the odds and seeing how their gut instinct stands up against the status quo.

First-time viewers and punters may be drawn in by high-quality graphics, and graphics are an essential part of virtual sports, but in the long run they are the icing on the cake. Most virtual sports bettors will stop making an effort to watch the event within a few weeks; the long-term draw is the thrill of staking and winning money.

While other forms of gambling are prevalent, with casinos still providing the lion’s share of gambling revenues in Africa, they are not experiencing the same boom as sports betting. In several of the biggest gambling countries in Africa, the rise in sports betting was paired with a decline in casino revenue, or at least slower growth when the two are compared.

Given that the result of the event is decided by a random number generator, some might wonder what the difference is between virtual sports betting and online slot machines. Due to the fact that a professional bookmaker offers odds, virtual sports betting is often classified as a game of skill in many jurisdictions where games of chance are prohibited. They are often grouped with live sports betting, which is allowed almost everywhere.

Virtual sports bridge the worlds of sports betting and casino games, potentially appealing to players of both

The frequency of virtual sports mirrors the frequency with which African punters like to bet. The vast majority of sports bettors in Africa place bets very often, but in small amounts. In Kenya, for example, most punters bet at least once a week, with a great number betting daily but on average spending $50 a week or less.

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, millennials often regard going to the cinema for a new release as less of an event than a chore. Similarly, with virtual sports events constantly available, young African punters could see waiting for a live match as a waste of time.

Virtual sports betting and live sports betting aren’t mutually exclusive. Virtual sports betting can serve as an introduction to the world of live sports betting, allowing punters to learn the nature of odds and betting before they move on to the deeper analysis central to effective sports betting. Vice versa, dedicated sports bettors looking for a new or more frequent betting experience could turn to virtual sports when their favorite live options aren’t available.

What to expect in the future

The examination of several key factors indicates that the African market is primed for virtual sports. The demographic overlap of African punters and virtual sports bettors is undeniable, and the technological improvements that have aided the sports betting boom are predicted to continue.

In South Africa, GGR is predicted to hit $2.5 billion by 2021. Nigerian GGR was estimated at $58 million for 2018, with a projected increase of 16%. Kenya’s gambling revenue was projected to hit $29 million in 2019. The gaming board of Tanzania predicted gambling revenue of $42 million for 2019, and the Lottery and Gaming Regulatory Board of Uganda predicted gambling tax revenues of about $12 million for 2019.

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.

The African market will develop according to the best available technology, sometimes in leaps and bounds that differ from the development of other regions. Consider communications. Skyrocketing mobile penetration, which is approaching 100% in Kenya, with similarly growing numbers in other African nations, has handily overtaken its predecessor - the landline. The landline stage of communications has effectively been skipped in large parts of Africa, as it was rendered obsolete before it could take root.

While it’s doubtful that virtual sports betting could render live sports betting entirely obsolete, there’s still plenty of room for it to grow. Predictions across the board indicate that sports betting revenues in Africa are set to increase. Crucially, the population of Africa is projected to grow by substantial amounts in the foreseeable future. The United Nations estimated that three-quarters of the population of Africa are under the age of 35, and that by 2030, 42% of the world’s youth will live in Africa.

Conclusion

Industry insiders insist that 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, basketball, and American football, will depend on the tastes of each country. Punters will be able to bet on their favored sports events even when they’re out of season.

Betting on virtual sports is perhaps the form of sports betting best suited for the future. Providing the high-frequency, short-duration option of betting on virtuals matches most punters’ fast-paced lifestyles. With technological improvements, rising sports betting revenues, and a young and growing population in Africa, it’s no wonder operators consider the continent a great market for virtual sports betting.