In this post we will be looking at how to start a betting business in Nigeria, How the Sports Betting Business Work, financial requirements and licensing procedure.
INTRODUCTION
In Nigeria, Sports Betting Business is one of the businesses raking in millions for a lot of people every day. However, sports betting went mainstream about five years ago and now, there are betting shops on virtually every popular street you visit in our towns, villages, and cities. An interesting fact is that Nigeria is highly populated with many young sport lovers. If you are considering a sports betting business, you must also know that there are different types of sports betting.
There is pool betting, casino games, poker, online betting among others. So, when you start, choose a niche or a combination of some of them. And the best part is that as many as these shops are, you will always find troops of people there trying their luck. Another fact about sports betting business is that more often than not, the betting companies win. The tremendous growth in this industry in the past five years is quite astonishing and there’s no better time for you to have a piece of the pie than now. Actually, sports betting is a game of luck. You win some and you lose some. The possibility of you using as low as N100 or N200 to get thousands of naira is what makes many to keep trying their luck. So, getting customers for your new business is not going to be a difficult thing to crack.
HOW TO START A BETTING BUSINESS IN NIGERIA
It’s not an arguable fact that there is a huge profit in the sports betting business. This is evident in the number of betting shops you find around. As a matter of fact, sports betting is beginning to take over every street and junctions in Nigeria.
Register Your Sports Betting Business With CAC: The first step to structuring your business in Nigeria is to get it registered with Corporate Affairs Commission (CAC). Usually, you can either register your business as a business name or limited liability company.
If you are starting a small business in Nigeria, it is always advisable to register as a business name then later upgrade to a limited liability company as you grow. But sports betting is not one of the businesses you can register as a business name. With your registration certificate, you will be able to open a corporate account for your sports betting company, and also get your Tax Payers ID.
Get The Required Licenses: Gaming business is one of the highly regulated businesses in Nigeria and it’ll be in your best interest to acquire the licenses before starting. There are several regulators in Nigeria to get approval from. The main ones are:
- The Nigerian Investment Promotion Commission (NIPC)
- The National Office for Technology Acquisition and Promotion (NOTAP)
- Special Control Unit against Money Laundering (SCUML).
- Capital Importation Certificate
- A Tax Identification Number and register for Value Added Tax (VAT) from Federal Inland Revenue Service (FIRS).
Furthermore, you are required to visit the National Lottery Commissions of Nigeria to apply and obtain a license. But if you are starting as an agent under a registered and licensed company, you wouldn’t need to get all the licenses.
Register Under a Betting Company: This is for those who do not have the monetary capacity to establish their own sports betting company. Registering under an established betting company as a franchise will reduce your startup cost. A franchise gives you the privilege to ride on the established reputation of the company. You can use their name, logo, and betting software. If you choose this option, all you need to do is pay a franchise fee.
Get A Betting Shop: Having a physical location is one of the requirements before you can be issued a license to operate a sports betting company in Nigeria. So, rent a suitable office where you will carry out your business transactions. In addition, people will find it difficult to trust you with their money if you don’t have a physical location. Renting an office facility is not limited to bookmakers or promoters (pool), it applies to agents as well. It’s also advisable that you get a large office that can accommodate a large number of persons.
Get The Necessary Equipment: After securing a shop, purchase the necessary equipment needed to start. The basic equipment is: computer systems, UPS, printers, TV sets, furniture, and monitor. All these equipment is relevant to the success of your sporting business. Actually, you don’t need to get new sets of equipment when starting. But if you can afford new ones, get them as they last better and comes with a warranty. In addition, you should also factor in internet cost in your expenses.
Get Professional Betting Software: This is about the most important decision you will take in your sports betting business. The betting software is where all the business transactions will be carried out and regulated. Hence, take your time to select a good software provider. Check reviews before settling for one.
Open An Official Website: Having a website is very important for your sports betting business because that is the channel, you’ll use to announce the various winners daily. Also, your website is the number one place people can visit to see the operations of your sports betting company.
Choose A Payment Service Provider: Sports betting business is an online business and there’s need for an online payment gateway that’ll ease payment transactions. Sports betting is made easy when punters can easily make payment with their cards and get the transactions done within a short time. Importantly, ensure your payment gateway is secured because an unsecured payment gateway is prone to attacks and drives away potential customers.
Expand To Other Locations: If you are starting this business from scratch, you cannot make much profit if you only have one location. To grow and fully tap into the opportunities in sports betting business, open branches all over the country to reach a wider audience.
Promote Your Sports Betting Business: If you are conversant with the sports betting industry, you will agree with me that the competition is stiff. Therefore, if you want to penetrate the business as a newbie, you will need to engage in aggressive promotions. Your marketing strategy must be strong and consistent. You will need a lot of money to run the type of campaign that will make an impact. One of the ways to promote your sports betting business is to run a TV/Radio advertisement. Also take advantage of social media, handbills, posters, newspapers, and online advertisement.
HOW THE SPORTS BETTING BUSINESS WORK
Basically, the person placing the bet is called a punter. The punter predicts the outcome of a particular match with a certain amount of money. If after the match, the prediction comes out right, the sports betting company pays the punter an agreed amount of money but if otherwise, the punter loses his money. As said earlier, it’s a win or lose game. Sports betting is a game of luck. The National Lottery Regulatory Commission (NLRC) regulates the operations of lottery businesses by issuing licenses and permits; setting standards, guidelines and rules; and promoting transparency and integrity in the operations of lottery businesses in Nigeria.
FINANCIAL REQUIREMENTS
- A company with a Minimum Share Capital of N30,000,000 (Thirty Million Naira): Don’t be alarmed, the shareholders are not required to make financial contributions up to the full amount.
- Application Fee: N2,000,000 (Two Million Naira).
- Permit Fee: N100,000,000 (One Hundred Million Naira). Where the company is a member of the Association of Nigerian Bookmakers, a 50% (N50,000,000) concession is granted.
- Bank Guarantee of at least N25,000,000 (Twenty-Five Million Naira).
LICENSING PROCEDURE
Application Stage: A proposal is to be submitted to NLRC together with the necessary documents including:
- a completed NLRC application form;
- an application letter stating the intention of operating a sports betting company;
- a non-refundable application fee of N2,000,000;
- company incorporation documents;
- evidence of trademark registration; and
- evidence of registration with the Special Control Unit on Money Laundering.