How To Start A Sport Betting Business in Nigeria
Sports betting shields a vast horizon of sports and does not concentrate on football alone but as well as other sports including poker, horse racing and dog racing and so on.
Betting served as one of the ways many football lovers have chosen to assist themselves financially by guessing football scores. And this has make so many football lovers in Nigeria to see betting as a lucrative game to invest their time and money on.
Moreover, sport betting is not only for football game alone, people also stake on other kinds of sports as well as virtual games.
Betting sites keep improving in Nigeria due to level at which people find refuge in this game. However, if you want to start a sport betting, you can start as an affiliate to a betting company or you can have your own shop entirely.
Furthermore, starting sport betting business demands for a lot of patience and you would have to get another source of income. This is due to the fact that, at first, you may not be making much profit. But as times goes on, it will start paying well.
More so, you might have heard about so many people making millions from sport betting; and this is actually true. This making of millions from sport betting has motivated so many youths to pay attention to this activities.
It is lucrative business you can start today and make enough money from, what you just have to know is how to start the business and how to run it. Therefore this is what this article will expose you to.
Registration and Licensing of the Business
Before starting any business in Nigeria, you have to register it; and sport betting business is not an exemption. Apart from registering with corporate affairs commission; which is the main agency in which the any business must registered with in Nigeria. You will also need to license your sport betting business with National Lottery Commission. And in the case of Lagos State, there is a board called Lagos State Lotteries Board (LSLB). This board
established by the Lagos State Lotteries Laws Cap L89 2004 Laws of Lagos State and it is responsible for regulating lotteries, sports betting, scratch card & interactive games, casino, gaming machines operations, pools betting, promotional competitions and other gaming activities within Lagos State.
You can also sign up for a franchise with a betting company, this another way of registering your business. Registering as a franchise will give you the authority to use the name, software, logos as well as the franchisor reputation and other things in starting and running your own sport betting business.
Meanwhile, all forms of gambling in Nigeria as well as sports betting is regulated by the National Lottery Regulatory Commission. The lottery was legalized with the National Lottery Act, 2005 and gambling is well-defined by Chapter 22 of the Criminal Code Act enacted in 1990. It is important to note that all forms of gambling are restricted to all citizens of Nigeria below 18 years of age.
Furthermore, the requirement for sport betting permit are analyzed below:-
Stage 1: Application requirement
You must submit a proposal to National Lottery Regulatory Commission (‘The Commission”) with the following information/ documents.
- Completed National Lottery Regulatory Commission application form
- An application letter stating intention of the applicant
- Non-refundable Application and Processing fee of N2, 000,000 (Two Million Naira) payable to the Commission
- General Business Information (a) Incorporation documents: Certificate, MEMART and Application Form 1.1 (or Form CAC2 and CAC7)
(b). Applicant company must have a Minimum share capital of N30, 000,000.00 (Thirty Million Naira)
(c). Evidence of filing annual returns to date with Corporate Affairs Commission
(d). Profile of the Company and each of its Directors
(e) Address of administrative office and locations across Nigeria
(f) Evidence of Domain name registration with .(ng/.com)
(g). Proposed Brand: Evidence of registration with Ministry Of Trade and Investment, Trade name, logo and colours
(h). Evidence of registration with Special Control Unit on Money Laundering.
(i). Name and profiles of all Directors and Key Personnel including Company Secretary, Compliance Officer, Accountant, ICT Manager, Operations Manager, Agency Manager(s) and Customer Care Manager
(j) Qualification and relevant gaming industry experience of Directors or Key Personnel (k) Evidence of tax payment by Directors and Key Management Staff for the preceding year
(l) Copy of Organogram and Proposed Organizational Structure
- Operational Information (a) Details of planned game events (live betting, sports book, virtual games and so on) and comprehensive modalities for each of the game events (b) Proposed distribution channels: retail, web-based, SMS, Mobile app or other channels (c) Operations, Marketing and Distribution Strategy showing expansion plans across Nigeria (d) Betting modalities, Terms & Conditions of participation and game rules
(e) A Sports betting industry analysis including SWOT analysis and competitive advantage of the proposed sports betting scheme.
- Financial Information (a) Proposed investment in the sport betting scheme (b) Source of funding and financing plans: equity, foreign investment, loans and applicable terms of investment (c) Evidence of financial capability to fund the operation of a sports betting scheme including Company’s Bank Statement of the last 2 (Two) years
(d) Five (5) Year financial projection for the betting scheme: profit and loss account showing investment, sales/income, winnings/ prize money, tax obligation, operating expenses, third party suppliers etc.
(e) Details of payment solution provider and proposed integration plan with such providers. Service agreement with provider.
- Technical information
(a) Profile of technical service providers, partners, telecoms providers and suppliers.
- Details of Platform\ gaming application developer
- Details of Odds providers
- Details of Other integration services providers (if applicable)
- Details of Hosting provider (self-hosting or cloud hosting), database/ back up service provider
(a) Details of contact persons for service providers
(b) Copies of executed SLA, Partnership/ Joint Venture agreements with providers and suppliers. All third party Agreements/Contracts will be subject to NLRC approval
(c) Technology documentations detailing the software (Operating systems, Database management systems, core business logic applications), Hardware (servers, routers, switches, firewalls) and other technology implementations (securities, DR etc).
(d) Architectural illustration of technical operation flow for the proposed sports betting scheme
(e) Industry based Certification of the platform (from approved and recognized testing labs) and any other evidence of compliance to industry Standardization.
Finally, at the end of this application process, you will be required to make a presentation to the Commission. Application review takes 10 working days.
Processes Involves in starting Sport Betting Business
In starting a sport betting business, you will need to learn the basic skills or you will work in an existing betting shop for a while so as to gather experience to run your own betting business.
However, when you want to start your sport betting business, you need to apply for a license/permission from National Lottery Regulation Commission. This commission granted three classes of licence and they are:-
- Sports Betting Licence
- Lottery Licence
- Permit for Promotional Competition.
When applying for the licence, you must address your correspondence to Director General of the commission and payment will be made through Remita Platform or bank draft that is payable to National Lottery Regulation Commission.
Moreover, Sport betting licensing process consist of 3 Phases, which are:-
- Application Stage
- Pre-License or Approval in Principle Phase
- Post-License Phase
Basically, the application fee for Sports betting is ₦2,000,000. However, if you are applying for 5 years licence duration, you will pay 50,000,000 as licence fee. Meanwhile, it will take NLRC 21 working days to review your license application and if they don’t need any further information and your application meet their requirements, the licence request will be approved and if otherwise, you may be requested to provide more information.
After your license request have been approved, you will proceed to the licensing process. One of the major activities that happen after your request has been approved is that, you will invited to make a presentation to National Lottery Regulatory commission on how you want to run sport betting scheme. And after you have successfully, do the presentation. Some delegates will come from NLRC to inspect your facilities, server center, providers, head office, your propose model-outlets so as to be sure that you complied with the approved standards.
However, the secret to running sports betting business is to be aware that whether or not a customer wins or loses, the sports betting company always wins. The sports betting business could also be label named, “The House” and this is virtually the major reason why sports betting business has become a source of finance to many in Nigeria today.
When establishing a sports betting business, you should be mindful of making available full time and working internet connections as well as a means to make sure there is an uninterrupted power supply. You will also need lots of television screens where people could check out punters as well as play live bets and more. You will also need to make available a lot of Computers setup for the purpose of the business and a thermal printer somewhere in the corner so that people could get to print out their bet slips.
Meanwhile, if you have not incorporate your company before, you will have to apply for approval to incorporate a betting company in Nigeria. And some of the documents required are:-
- An application letter for approval to register a Company with lottery/ betting/ gaming objectives in Nigeria.
- Copy of the Name reservation approval issued by Corporate Affairs Commission.
- A bank draft in the sum of N10, 000 (Ten Thousand Naira) in the name of National Lottery Regulatory Commission.
Business Plan Preparation
You need business plan to get loan from banks or draw the attention of external investor to your business. Business plan has always been a document that describes how a business will be run for like two or three years of commencing operations. It has a theoretical part and financial part.
The contents of your business plan are:-
- Executive Summary
- Product and Service Offerings
- Vision Statement
- Mission Statement
- Business Structure
Role and Responsibilities
- Chief Executive Officer
- Cashier and so on.
- SWOT Analysis
- Market Analysis
- Market Trend
- Target Market
- Competitive Advantage
- Sales and Marketing Strategy
- Sources of Income
- Sales Forecast
- Pricing Strategy
- Payment Options
- Publicity and Advertising Strategy
- Financial Projections and Costing
Sustainability and Expansion
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Sales and Profitability
Basically as a sport betting agent, you can make money in two ways:-
- Fixing commissions on sales your generate
- The total of money that people loose will be yours
However, if you starting business as an affiliate partner, you need to know different companies pay different commission to their agents and this will be on the basis of sales and profits you made. Some gives 10% while some give 50% profit.
Marketing and Promotion of the Business
In Nigeria for any business to thrive so well, you need to market and do a proper promotion activities. Apart carrying out market research, which is very important. You also need to know the game that people in that vicinity like watching.
Therefore, in marketing your sport betting business and making people to know that, you are now present in the area. You will need to show a live game for free for a while. So that, while people are watching the free march, they can as well decided to bet to back up their interest in the team that is playing.
In promoting your business, you can print a small hand paper and be giving people that came to watch the free live march you are showing. You can give them more than one, so that they can help in giving their friends too.
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Having Strong Online Presence
Having online presence is very important in running a sport betting business. Because, without connecting online, you cannot play bet for your customers. Every activities to be carry out in a sport betting shop evolve around internet.
It’s on internet that you are go stake the game for them and it’s also online that you are going to make the payment for staking the game.
Funding and investing the Business
In funding sport business, you may use your persona funds to start. You can start with at least ₦200,000 or a little more. This your personal funds will cover the acquisition of equipment needed in the sporting shop as well as the initial capital and registration of the business.
However with time, you can expand on the fund or go higher and invest a huge sum of money. Furthermore, for you to get more funds to your sporting business, you will need a well-articulated business plan in which investor or banks will need to have a copy before they can decide on supporting your business with loan.
This implies that, both bank and external investor can help in bringing more funds to your sport betting business.
Equipment/Machinery and Tools Needed For the Sport Betting Business
The basic equipments needed for the sport betting business are:-
- A Shop: – You need to rent a shop in a strategic place. Because where you shop is located have an important role to play in the sales you will make in your business. For example, you can rent a shop inside corner or on 3 or 4th floor of a building; people will not want to pass the stress of entering corner or climbing so many floors to get to your shop. Therefore, you need a shop in an open place or a shop besides the major road.
- Computers:- You need a computer system in your shop. This computer can be a laptop or But most times, the preferable computer is a desktop because of its wideness and the inability of customers to move it around. Meanwhile, the computers you will have in ‘ your shop will be based on the number of cashier you want to have to start with. Also, it is believed that, your computer system must have a large RAM so as to be able to work well.
- UPS (Uninterrupted Power supply):- This is needed in a situation whereby Electric went off suddenly and you are not able to go out and on your generator. This equipment will keep your computer working for at most 35 minutes before it went off. Although, you can ignore this equipments, if you are not capable of buying it.
- Chairs and Tables:- This is needed in your shop for your customers to sit down and also for you to sit down and operate the system. Most times, the chairs you will use will be a tall one that will make it easier for you to be in the same level with the computer on the
- Modem: – This is an internet connection that you will need to connect to the website of the betting business you are dealing with. You need to choose a good internet provider that is working very well in your location. It may be Glo, Mtn, Airtel or 9mobile.
- A good generator: You need a generator set because Nigeria electricity provider are not So, anytime they cease the light, you will put on your generator set to attend your customers.
- Printers: This will be used to print out the betting paper. This betting paper shows the game that your customers played in case they win, they will come back with it in the second day.
Location of the Business
Location is one of the aspect of any business that must not be taken with levity, and sport betting business is not an exemption. Even though, sport betting is a good business that has gain lot of ground in Nigeria, still the sales you will made and your profitability will based on where your business is located. Therefore, you have to locate your sport betting shop in a well opened area and as well an easily accessible building.
Finally, you need to know that the world of sports betting business has been a multi-billion investment in which any country can think of. Both the Old and young ones now put interest in playing the game, especially football lovers.
About the Writer
Olusipe Abiodun Yinka is an Audit Associate in Bulls Capital Limited. He has a National Diploma in Accounting from Abraham Adesanya Polytechnic as well as a Degree in Accounting from Alex Ekwueme Federal University, Ebonyi State. He is a creative copywriter and a Trendsetter. Apart from writing, Olusipe is also an entertainer.
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