South African pay-TV company Multichoice has paid R1.3 billion ($81million) -and may still pay another R500 million more for a 20 percent stake in Nigerian sports bet company Betking. It was disclosed on Thursday. The company bought the shareholding to expand the group’s entertainment ecosystem.
Further, it said in a brief note in its interim results statements. The first payment was an upfront investment, and Multichoice said valuing Betking at a minimum of R6.5billion ($31 million). The additional amount is dependent on earn-out targets, which it did not disclose, up to the end of 2023. Although Multichoice described BetKing as pan-African, it has significant betting operations only in Nigeria, Ethiopia. As of June this year starts operations in Kenya, which it also entered into a considerable soccer sponsorship. In its home country, it has built an agent network.
It says numbers more than 8,000 in part through a commission structure that offers shop-owners up to 30 percent for the transaction via equipment it provides, with the promise of payment within 24 hours. To hit the high commission payments, agents must push –players towards high-risk bets. Those who do not will earn 1% instead.
Multichoice said the notion of the deal its groups intend to further expand its entertainment ecosystem and revenue prospects by offering new products and services and pushing new growth opportunities.
In contrast, Multichoice does not just want to live on European soccer rights, which keeps rising on aggregate price, affecting margins in a continent where consumers discover alternative ways to be entertained. So provided you call it entertainment –watching Ronaldo and Messi or playing and betting their avatars money can be made.
Betking and Multichoice think there is an opportunity to ramp up revenue from Africa’s exploding gambling industry. It could do that without relying on the capacity to ship money to hold football rights in European capitals. Now that Multichoice has moved into betting, we expect other prominent African players to consider the gambling industry.
Interestingly this development is a testament to the recent unprecedented growth the Nigeria betting and gambling ecosystem has been experiencing over the past five years, positioning the country as the most important betting markets in Africa thanks to its youthful population of mobile-first and the technology momentum build across different sectors of the Nigerian economy has made it the first choice in Africa for potential investors looking to start betting business.
However, in a few years, we expect the Nigerian regulatory body to update some of its existing laws to follow the latest technology trend disrupting the gaming industry, such as the fourth industrial revolution, namely, blockchain technology (cryptocurrencies), Artificial intelligence, Big data, and many others.