The Game-Changer: Sports Betting as a Catalyst for Nigerian Sports Development

Ken Egbas: “I hope to witness a time when gaming companies make benchmarks not just on profitability,  but on what they contribute to the growth of the sports industry.”

The State of Sports Betting in Nigeria

The Nigerian sports industry has immense potential but faces significant challenges, such as inadequate funding, poor infrastructure, and a lack of commercial viability. On the other end of the spectrum, the sports betting industry is growing rapidly in Nigeria and with an estimated market value of over $2 billion and millions of active users, the industry can provide a solution by generating revenue streams that can be reinvested into the development of sports in the country.

In this exclusive interview with SportsBoom.com, the Special Adviser and Consultant to the Honourable Minister for Sports Development, Ken Egbas shares his thoughts, and he makes it crystal clear that a collaboration could be the real game changer for both industries. 

How Sports Betting Supports Grassroots Development

Q: What specific measures can be implemented to ensure that revenue from sports betting is transparently and effectively channelled into grassroots sports development?

“It’s a fact that the gaming companies pay different levels of taxes to various bodies, but the issue is that in an industry where the top 10 gaming companies declare profits over 100 to 250 million dollars annually, it presents a huge market for sports development. In the case of the gaming industry, we have several companies that are not owned by Nigerians and they’re operating from offshore and setting up online infrastructure. I think this is one of the problems which the government needs to address head on,” Egbas told betting news site SportsBoom.com. 

The whole rationale behind why this should be the case is that if there is an ecosystem, one element feeds the other and everything needs to work perfectly, especially when it comes to our infrastructure. I think there is room for engagement at the top level with the federal government and the Federal Inland Revenue Service (FIRS) to see how some percentage of the revenue that is derived from that ecosystem can go to the sports industry to help us with infrastructure, The opportunity is there, and I think it’s something that the federal government needs to take very seriously.

Now, the only source of funding for the sports industry is the federal government and occasional sponsorships, but it doesn't meet 0.01% of the needs of Nigerians in the sports industry. 

Image Credits: The Guardian Nigeria 

Addressing Match-Fixing Concerns

Q: How can the ministry address concerns about match-fixing and maintaining the integrity of Nigerian sports while embracing sports betting as a funding source?

Egbas: All over the world, integrity as regards the fallacy of results from the sports industry is a concern. For example, this year at the premier league, I think about 3 players were banned based on the foreknowledge of an act which they were supposed to commit and executed the various acts accordingly. Scenarios like this will always play out, but the primary way to ensure the integrity of sports is to build systems that work.

For instance, the reason why those players I mentioned earlier could be identified was that a panel of inquiry was set up and attended the hearing of the individuals who were adjudicated over the matter. They gave their judgments and their deliveries without any prejudice or favour and that’s because they have systems that work. If such a scenario played out in Nigeria, the police would probably have to get involved and then proceed to the court where justice might not be served, etc. So, it’s not a problem for the minister or the ministry alone, it’s a problem for the entire system including the athletes,  the legal system, the security system, the investigative system and even the media. The media is important, because some investigations commence, due to investigative journalism.

Image Credits: The Cable

The other part of this is that for a betting company to be able to access a key player on a team and get into some kind of agreement with them to commit a particular act to shape betting outcomes, betting companies also must take responsibility. Looking at the growing industry in Nigeria, are there codes of ethics by which the industry is governed? There are numerous stories of match-fixing and what needs to be done to curb such occurrences is to come up with a regulatory framework which should encompass the ministry, the various federations, and other stakeholders to ensure that it works.

Sports Betting as a Catalyst

Q: What benchmarks or key performance indicators would you propose to measure the success of sports betting as a catalyst for sports development in Nigeria?

“The only key performance indicator in that industry is profitability. If you observe the gaming companies and compare them to other businesses, you’ll find that there is minimal investment and maximum return. When you also take into consideration that most of these gaming platforms are online, you’ll see that most of the time, they use software and have offshore offices as opposed to physical offices in Nigeria. Hence, the only benchmark is profitability. However, I think that if the betting industry understood the advantages that could come from expanding their businesses more, it would go a long way for them,” Egbas told betting news site SportsBoom.com. 

Recently, we had a conversation with a gaming company called Yanga Games/Technologies Ltd. The Minister of Sports had a conversation with the chairman of the company, Derrick Kantebe and surprisingly, it went a lot better than we anticipated.

One month after the initial meeting,  Derrick had another meeting with the Sports Minister saying: "We make money from sports, no doubt about it and I pay my taxes, so I think we can create a platform where Nigerians can bet on sports in Nigeria and a certain percentage (40%) of the proceeds of that bet that will go to sports development in Nigeria.’

Image Credits: Score Nigeria

They brought that forward as their Corporate Social Responsibility (CSR) in contributing to sports development in Nigeria. I recall that when that agreement was signed at a press conference, it ruffled a lot of feathers in the sports betting industry and that happened because most of the companies knew that this was the right thing to do, but because no one held them accountable, everyone has gotten away with it. Since that agreement was signed with Yanga, we’ve had about 4 companies reach out to the sports ministry, asking how they can collaborate with us to support us. We never would have had that situation if one company didn’t make the first move in deciding the right thing. So, when you look at what the future of the industry is in terms of what the benchmarks are, I think the gaming companies should focus less on profit and think in a direction that’s similar to Yanga Games were thought also goes into investment in the sports talent.    

Another challenge which I didn't mention earlier is that most Nigerians place bets on foreign sports. Could we come to a point where we get 60% of the 115 million Nigerians who go on those platforms to also get involved in sports at home? It will certainly create a market for local sports. Why can’t we have people betting on athletics? This is the innovation I think we need to bring in terms of what works best in the future for the industry.

In terms of benchmarking, hopefully as we go forward with the example that has been set by Yanga Technologies Ltd, we will also witness companies making benchmarks not just on profitability,  but on what they contribute to the growth of the sports industry or the sporting ecosystem in Nigeria, without which they wouldn’t have a business to begin with. 

Sports Betting as a Catalyst

Q: What benchmarks or key performance indicators would you propose to measure the success of sports betting as a catalyst for sports development in Nigeria?

“The only key performance indicator in that industry is profitability. If you observe the gaming companies and compare them to other businesses, you’ll find that there is minimal investment and maximum return. When you also take into consideration that most of these gaming platforms are online, you’ll see that most of the time, they use software and have offshore offices as opposed to physical offices in Nigeria. Hence, the only benchmark is profitability. However, I think that if the betting industry understood the advantages that could come from expanding their businesses more, it would go a long way for them,” Egbas told betting news site SportsBoom.com. 

Recently, we had a conversation with a gaming company called Yanga Games/Technologies Ltd. The Minister of Sports had a conversation with the chairman of the company, Derrick Kantebe and surprisingly, it went a lot better than we anticipated.

One month after the initial meeting,  Derrick had another meeting with the Sports Minister saying: "We make money from sports, no doubt about it and I pay my taxes, so I think we can create a platform where Nigerians can bet on sports in Nigeria and a certain percentage (40%) of the proceeds of that bet that will go to sports development in Nigeria.’

Image Credits: Score Nigeria

They brought that forward as their Corporate Social Responsibility (CSR) in contributing to sports development in Nigeria. I recall that when that agreement was signed at a press conference, it ruffled a lot of feathers in the sports betting industry and that happened because most of the companies knew that this was the right thing to do, but because no one held them accountable, everyone has gotten away with it. Since that agreement was signed with Yanga, we’ve had about 4 companies reach out to the sports ministry, asking how they can collaborate with us to support us. We never would have had that situation if one company didn’t make the first move in deciding the right thing. So, when you look at what the future of the industry is in terms of what the benchmarks are, I think the gaming companies should focus less on profit and think in a direction that’s similar to Yanga Games were thought also goes into investment in the sports talent.    

Another challenge which I didn't mention earlier is that most Nigerians place bets on foreign sports. Could we come to a point where we get 60% of the 115 million Nigerians who go on those platforms to also get involved in sports at home? It will certainly create a market for local sports. Why can’t we have people betting on athletics? This is the innovation I think we need to bring in terms of what works best in the future for the industry.

In terms of benchmarking, hopefully as we go forward with the example that has been set by Yanga Technologies Ltd, we will also witness companies making benchmarks not just on profitability,  but on what they contribute to the growth of the sports industry or the sporting ecosystem in Nigeria, without which they wouldn’t have a business to begin with. 

Potential Conflicts of Interest

Q: You stated that about 4 companies approached the sports ministry for collaboration after Yanga games set the pace. How do you plan to mitigate potential conflicts of interest that might arise, since you also stated that some feathers were ruffled during the signing of the agreement?

Egbas: I don't see any way in which a conflict of interest would arise. Sports in Nigeria is made up of 53 federations; it’s our responsibility to ensure that there won't be a conflict of interest, and we’ll do just that.

Yanga came up with this offer of their own volition and I saw something smart on their part that might have elicited the reactions that followed. Yanga is positioning itself for the future to demonstrate their care for sports development by partnering with the sports ministry. With gestures like this, I foresee this as an advantage when it comes to regulations and tax for Yanga Games.  

They may not be the biggest players in the market now, but they’ve situated their business in a very safe place where they are demonstrating to Nigerians that every time they participate on their platform, a percentage will go to a jersey of a Nigerian, or pay for a competition, etc. I see that as smart.

So, when you see other companies reacting to that, it was an innovative move and if they want to come forward now, I think there is room for us to look at different areas in which people can take up different aspects. Therefore, I don't foresee a conflict-of-interest scenario. The most important thing is that the reorientation needs to happen in the sports betting industry. It's not going to go on forever. The industry can’t declare a market value of $1.5 billion in a year and not expect that people start to take a closer look at it.

So, I think it’s in the interest of these gaming companies to ask themselves questions about how they can plug in and make moves that give them a lasting advantage before such companies eventually get slammed with sanctions. Such actions demonstrate to the government and regulators that they are willing to partner with them to ensure that they add to sports development and contribute meaningfully to the ecosystem.

Leveraging Technology

Q: In what ways can the sports ministry leverage technology and data analytics to maximise the benefits of sports betting while minimising its risks to the sporting ecosystem?

Egbas: One of the biggest problems with why the sports ministry has never really taken off in Nigeria is there is an absence of an industry. Industry means that people in numbers have to be actively engaged. Those numbers must be known, their activities must be quantifiable. Their output must be qualitative and whatever that output is, it has to have market value. People also have to be willing to pay for it on an international or local scale. It also has to be competitive- that’s what makes us an industry.

When you talk about industry, especially looking through the lens of other developed countries, that term is used because those countries are putting in the work to ensure that their systems work. For an extended period in Nigeria, everything has been organic, not planned, and of course, when a process like this is organic, it comes with a lot of chaos. Everyone does their own thing and works in silos.

When John Enoh was appointed as the Minister of Sports, he sat with his team and made it clear what his aspirations were and asked a number of questions. He said:

‘I want to create legacies, I know we’ve had so many sports ministers, but I want to understand why the infrastructure decays so badly. Why would we build a stadium for 13 billion naira and we can’t get a full attendance? Why would a national stadium for example go into such abject decay that it would be sold for scrap at the real estate market? How come athletes perceive that they have more love for their country than it has for them?’

Image Credits: Convert Betting Codes 

These are the kinds of questions that were asked and guess what? We don’t have the data to answer those questions. We can’t see the state of facilities like the stadia in real-time. Another example is the Ministry of Sports Development has 6 or 7 zonal offices across the country. Most times that we have meetings, the ministry must provide flight tickets and transportation for people to come to Abuja or some other location. Those meetings can’t be held via all the technology we have available today. We have another situation where right now the national broadcaster, the Super Eagles are playing a game in a stadium in Abuja and their parents can’t watch them and must resort to using services provided by DSTV,  to watch a game that’s happening in their backyard. 
So, recently the minister decided that the best way to solve this problem is using technology and it will bring Nigeria up to date to a level with some of these nations where these things work well eg. the Norwegian model.

Right now, the Ministry of Sports Development is in the process of calling for pitches and we are at the stage where we have selected 2 companies to work with to create a system, an application, and a platform known as Nigeria Sports Data Aggregator System (NiSDAS). On that system, we have 4 pillars. On the first pillar, we want to know who the athletes are from school age to education level.

As an individual registers, the system gives them an identification number. So, if they’re registering for a competition at the age of 7, they'll have to provide their real age, and we will keep that data throughout the time we manage the individual in question. Now, data is a major challenge, so this will really help.

The second part of that application is to help us with the management and monitoring of sports facilities in real-time. One of the deficits we have in sports in Nigeria is access to facilities. Some facilities lay dormant in various locations and are maintained at a very high cost.  Yet, our athletes who are preparing for the Olympic games don’t have a place to train. So, we need to know where these facilities are.