Africa’s emerging gambling industry has experienced a surge in interest both within and beyond the continent. Though rewarding, investing opportunities in this industry comes with its peculiar challenges and navigating the intricacies are critical to success. Each of the 54 countries on the continent has its own peculiar complexities, however, there are factors that cut across the gambling industry on the Continent.
1. Regulatory Framework
An understanding of the existing regulatory landscape in the country of interest is paramount. Comprehensive due diligence must be carried out to understand the legislation, regulation and indeed, the practices governing the country. An investor must identify the legal requirement, licencing procedure, foreign investment regulations and compliance principles applicable to each target market. A comparison of target markets may also be necessary to determine which best suits an investor’s appetite.
2. Comparative Analysis
The African continent has considerable cultural, ethnical and language diversity that necessitates comparison of target countries to assess demand, competition and untapped opportunities.
No doubt, the population of the continent is a key attraction for gaming investors; yet it is imperative to understand the demography, culture, peculiarities, level of infrastructural development, technology prevalence and outlook to gambling of each market. This will help investors identify niche markets, opportunities and to develop strategies that optimise such opportunities.
3. Operational Risks and Financial Viability
Prospective investors must identify operational risks and have in place mitigating strategies. The African gaming industry is primarily dependent on service and support from more advanced jurisdiction hence factors of political stability, economic outlook, currency fluctuation, technology transfer policy, taxation regimes and associated risks must be identified, analysed and contingency plans made to manage its effect on business.
4. Assess and Access to Technology
As technology plays an integral role in the gaming industry, an assessment of the technology infrastructure development of the target country/ markets is imperative. Appraisal of available technology, mobile penetration, internet availability and accessibility, payment services gateways and ancillary infrastructure is germane. No doubt, technological advancement is prevalent on the continent; however, it is imperative for a successful venture to understand the phases and reliability of available infrastructure.
Investors desirous of introducing platforms and software developed for advanced market to Africa should embark on an assessment of the suitability and compatibility of such software, product or platform for the market.
5. Product Preference and Gaming appetite:
Investors should not make assumptions about the gambling habits and product preference of the target market as existing legislation, demographics, cultural and socio-economic considerations play integral part in target market preferences. Investors must align product offering to the preference of its target market to succeed on the Continent.
More importantly, the regulation of various gambling activities (from lottery, casino, sports betting, virtual games to the emerging eGaming) differs for each country. Investors must be enlightened to the nuances and intricacies of each target market to ensure a successful venture.
6. Responsible Gaming Practices
As the government and audiences in more African markets get enlightened about what obtains in advanced gambling markets, there is increasing demand to embed responsible gaming principles in gambling systems. Investors that adopt business strategy, tools and measures that promote responsible gaming such as due diligence on players, limit setting, self-exclusion addiction prevention, returns to players and AML measures are positioned to excel as reputable brands on the continent.
A successful venture into Africa’s gambling industry and the opportunities it offers requires a deliberate approach, appetite and strategy dependent on robust knowledge of target markets. A uniform approach to the continent is unlikely to succeed if it does not accommodate the peculiarities of each market.
Engaging legal professionals with expertise in Africa gaming and gambling laws is a necessity to gain invaluable insight into the nuances of target markets, navigation of the regulatory landscape, technology requirements, operational consideration. This will ensure informed decision making and adoption of a sustainable strategy on the evolving gambling industry.