Top Factors Driving Africa’s iGaming Growth

  • A pair of dice and chips used at a casino
    A pair of dice and chips used at a casino
    pixabay.com
  • The worldwide growth of the iGaming market has not skipped Africa as well, and the industry keeps rising on this continent. African market opportunities are vast for iGaming companies, and the gambling sector is flourishing in several countries.

    Leading operators keep expanding in this lucrative region, and their number continuously increases. Of course, a series of factors contributed to Africa’s iGaming industry growth and development. In this article, we will explore different trends that make the African gambling market so attractive.

    Major Factors of Africa's iGaming Market Growth and Development

    Online sportsbooks and casinos in Africa are more popular than ever, and they attract a vast number of customers. The industry experiences steep growth, and different factors served as a catalyst for that huge development.

    Major reasons why the iGaming industry in Africa has changed so drastically include: technological disruption transformed the market, especially the mobile penetration and fast internet connection, sustained economic growth in the region, gambling legislation and an increase in the young population.

    The combination of these factors had an immense impact on Africa’s iGaming sector, making it one of the most prosperous regions for this industry in the world. The climate for the gambling industry got much improved, and it started attracting the biggest names in this sector.

    Therefore, we are not surprised to see many globally reputable operators opening their businesses in different African regions. And if you search for the best casino sites Kenya has to offer, check the online casinos presented here. Now, we are going to take a bit deeper dive into the major factors of Africa’s iGaming market development and growth.

    How the Technology Transformed the Market?

    Technology keeps evolving over time.
    Technology keeps evolving over time.
    File

    iGaming is one of the industries that benefited from technological advancement the most. Things have massively changed in the past years, and Africa experiences a digital revolution.

    What marks out of it is the accessibility and affordability of new technologies. It makes a perfect combination with the increased demand and investments in the emerging technology keep growing in Africa. Countries like South Africa, Egypt, Kenya, Nigeria, and Morocco are the top Foreign Direct Investment destinations in this continent.

    Africa’s Internet network infrastructure got significantly improved during the past several years. Nowadays, most countries are on 4G, while a couple of them deployed the Fifth Generation already.

    The average mobile internet speed has ramped up lately, and Tunisia has the fastest network speed with almost 20Mbps. Other North African countries, Egypt and Morocco, are right behind on the list of countries with the fasted mobile internet speed.

    On the other hand, South Africa and Lesotho have already rolled out 5G. The Fifth Generation is the future of mobile communication, and it can significantly improve the iGaming industry as well. Nigeria should be the next country to launch 5G, and having in mind how much the gambling industry is developed there, we can expect it to continue growing.

    Besides faster internet connection, more African people use smartphones. It is another factor related to technological improvement that skyrocketed the sector, knowing that the iGaming industry is vastly present online. This way, online casinos and sportsbooks customers can enjoy a better gaming experience, as they can place their bets or launch games on their mobile devices.

    Consequently, a bigger user base of smartphones led to the increased number of players at online casinos. It is estimated that the increase of smartphone users will be measured in millions in the years to come.

    The Impact of the Economy Growth

    African economies are on the rise in the last decade, and those trends reflect on the iGaming industry as well. Except for 2020, when the growth was slowed down a bit, Africa’s economy seems to get back on track.

    The GDP growth in Western and Central Africa was around one percent in the last year, and experts predict its increase to 2.1 percent in 2021. That figure should continue growing and reach three percent by the end of 2022. Some optimistic estimations say that the GDP can get to the three percent rate no later than the end of 2021.

    The sub-Sarahan countries saw their middle classes strengthened due to the rising disposable income. It means that people can afford to spend more money on different leisure and entertainment activities, and gambling is definitely one of them.

    This was a positive signal for domestic and worldwide operators to start exploring the African market, as it became one of the most exciting regions for iGaming investments in the world. As the communication infrastructure keeps improving in the region, we can see the gambling market continue expanding if these economic trends continue as per estimations.

    Legislation Benefits

    Despite technological advancements and economic growth, the development of the iGaming industry in Africa wouldn’t be possible without clear regulations.

    According to the gambling legislation status, we can divide African countries into three major groups: states with a fully or partially regulated market, countries with no regulations in the gambling sector and states where online gambling and sports betting is officially illegal

    Obviously, for the first group of countries, the full or partial legislation opened the doors to significant investments into the iGaming sector. Their revenue got increased, especially thanks to the tax income. The revenue increase also speeded up the economic growth, and the domestic iGaming operators also got the opportunity to enter the market.

    South Africa’s example of success, which was initiated by the adoption of gambling laws, inspired other countries to follow the same way. Nowadays, real money land-based casinos are available in South Africa, and estimations say its gross gaming income will rise to $2.3 billion (Ksh230 billion) by 2023. The gambling industry flourished in other countries, too, including Kenya, Nigeria, Tanzania, Gnaha, and Uganda.

    On the other hand, countries from the other two groups cannot count on the benefits of the iGaming sector legislation. Due to their unregulated markets, they miss out on the opportunity to increase their revenue, while the offshore operators exploit that situation to capitalize on players from these countries.

    Bigger Playground for the iGaming Companies

    Another promising factor that can secure Africa’s iGaming industry to develop steadily is the population structure in this region. Africa is currently the only region in the world with an increasing youth population. Estimates say that Africa’s youth population will increase by 50 percent by 2050.

    Considering that the current population structure is also pretty young, with over 50percent of people younger than 25, it represents an excellent platform for the iGaming industry.

    Since youth dominate the iGaming sector’s targeted audience, we can expect it to keep developing. Younger generations are more prone to adopting new technological achievements and pursuing entertaining content, and the gambling industry could keep benefiting thanks to these trends.

    Besides the increase of the industry consumers’ audience, these trends attracted many game developers to start their operations in Africa. They switched from part-time to full-time roles, thanks to the expansion of iGaming companies in the region. This also impacted the economy, as the gaming industry growth brought many jobs to the African people.

    Current Status in the Gaming Industry in Africa?

    An image of gaming
    A video gamer playing on his Personal Computer.
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    Considering the sub-Sahara countries, South Africa dominates the gambling industry. The two main niches keep developing – iGaming and eSports. Due to the investments in the country’s infrastructure, mobile gaming has been particularly on the rise.

    Increased coverage and high-speed internet made online casinos more available to players. Besides the land-based venues, numerous online casinos are available for South African players.

    On the other hand, sports betting is the most dominant form of gambling in East Africa, Nigeria, and Ghana. People from these countries are huge sports fans, especially football.

    It is estimated that every third Nigerian place daily bets and sports bettors in Nigeria spend around $2 billion on their wagers annually. Sports betting generates around a quarter of the total iGaming industry revenue, while the popularity of other gambling forms keeps increasing.

    What Can We Expect in the Future?

    According to different parameters and estimations, Africa’s iGaming sector will continue its development. More operators will keep searching for their space on the gambling market in this region.

    However, there is still a lot of work to be done on the legislation part. Countries that still haven’t regulated the industry are slowing down the iGaming growth in the region and create a space for a gray market.

    Further research indicates that the number of Africans enjoying gambling activities will double in the next ten years. North Africa countries hide a significant potential, and projections say that the industry will generate more than $90 billion (Ksh9 trillion) annually in those countries.

    Conclusion

    Africa’s iGaming market entered an irreversible process, and all participants – including players, companies, and developers – should benefit from these trends.

    The current projections are encouraging, and Africa should remain one of the hottest regions for the iGaming sector development. Of course, there is still a lot of space for improvements, especially on the legislation matters, and if those get handled promptly, the industry could skyrocket.

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