South Africa - the State of Play

SPORTS BETTING in South Africa has been riding a significant growth trajectory for the past ten years. This is across both retail and online.

While the product mix has changed a bit, it’s impossible to not notice the relentless growth of bookmakers across the region.

Indeed, the shift of the gambling Rand from land-based casinos to sportsbooks is changing the landscape of the market in South Africa and beyond.

Those that have embraced online and mobile early are the ones enjoying the greatest growth, but there are still opportunities for those a little late to the digital party.

Operators already live are continuing to find new segments of players to engage and some are even expanding their brands and products outside of the country.

Of course, as the market becomes increasingly competitive, we are seeing operators look to new and unique ways of acquiring customers.

For many, this has seen them add different forms of gambling including fixed-odds numbers, RNG casino games and virtual sports.

Others are seeking to differentiate through payments, bonusing and marketing activity.

The pandemic has further accelerated the pace of this change; retail operators have had to ramp up their transition to online to mitigate the impact of retail closures.

Online gambling now accounts for 23% of total GGR with the number only set to rise.

But retail is a significant opportunity for acquiring customers and pushing them to online play - its potential as an online acquisition channel must not be overlooked.

To date, the biggest names in African online gambling tend to have a heavy retail presence which they are leveraging to drive players online.

There are several benefits to this. In the early days of any market trust remains a barrier and consumers look for brands they are familiar with.

Another is that the cost of transitioning a retail player to online can be much lower than having to acquire an online player directly for the very first time.

This is partly because players across Africa are promiscuous; most hold several accounts and will decide where to play simply based on the best bonus being offered.

While operators may initially be happy to bonus their way to market share and loyalty, ultimately this is a race to the bottom.

Those that can drive retail players online will be in the best position when it comes to achieving the highest customer lifetime value.

South Africa and the wider African market have a unique set of challenges for operators to face - a copy and paste strategy from other markets will not work here.

For example, there are regular power outages that cause issues for retail operators and disrupt mobile networks - this makes it hard to deliver a seamless customer experience.

Mobile and technology advances differ from region to region. In some markets, this means launching with a stripped back product and service offering.

Payments are another challenge - mobile money is central to the African betting market so operators must offer options such as M-Pesa, MoMo, Airtel, Orange Money and Tigo.

The African markets where these options are available, including South Africa, Tanzania, Uganda and Kenya, enjoy much higher gambling activity.

Regulatory intervention is another hurdle. Laws are added and amended all the time and many present complexities when it comes to taxes, data protection, etc.

For operators and technology providers, this means taking a localised approach to each African market to ensure compliance but also to deliver the best player experience.

Despite these challenges, Africa offers plenty of untapped potential with retail sports betting GGR estimated to top $1.6bn and online sports betting GGR $521m by 2025.

This is certainly the case in South Africa which currently accounts for 48% of the entire African market (based on GGR).

Having a digital presence is an absolute must. Of course, the online product must be of the highest possible standard while customer support needs to be flawless.

Mobile is the platform for play in Africa, so particular attention needs to be paid to creating a superior mobile experience. This takes in product (markets, odds, bet-types), payments, bonuses and customer support.

An online marketing strategy is important, but operators with a retail presence must use this to drive online acquisition.

Capture players at the retail level and then delight them with new mobile betting products; this can include freeplay games as well as realmoney wagering opportunities.

Freeplay is incredibly powerful in new markets as it helps to engage, educate and acclimate players to real-money betting.

Loyalty schemes will be crucial, too. Of course, they need to be omni-channel if operators are to maximise the value of retail players online and online players in retail.

Many tout the US as being the biggest online gambling opportunity in the world right now, and that it most certainly is.

But Africa and South Africa in particular are still significant markets.

They are not without challenges, but those that can crack the code when it comes to transitioning retail players to online will reap the rewards.