INSIGHT IGAMING COMPLIANCE AFRICA
How bright is the future for iGaming across Africa?
iGaming continues to grow in popularity across the continent. However, the recent decision by two of the provincial Gaming Boards in South Africa to allow online fixed odds contingencies in their jurisdictions has led to huge growth in this market, and we are seeing more and more manufacturers who are looking to test and certify their games for these jurisdictions.
Sports are a pillar of many African nations, but is online casino entertainment gradually becoming more familiar to a variety of markets across the continent?
As you rightly say, sports betting remains the primary mode of gambling across Africa, but we are seeing an increase in online casino style games in certain markets. For example, operators in some markets such as Kenya are reporting an increase in the number of female players who register predominantly to play online games.
Also, we have seen many games localised to particular markets in terms of demographics and technology constraints. Te South African online market has exploded with most players in this jurisdiction playing online fixed odds games rather than sports betting.
Local infrastructure in Africa represents the major barrier to progress for most operators. Tey may have favourable regulatory regimes but, unless operators can reach consumers, their offerings may have limited impact. Are mobile telecoms and internet penetration the most glaring concerns for B2C operators?
Yes. Internet penetration, the cost of smart phones, and the cost of data remain an inhibiting factor in growing this market. However, many operators have localised their products and put strategies in place to alleviate these issues and yet provide a fun and interactive experience for the player.
As an example, some operators offer a USSD based platform to allow for sports betting and numbers style games on older style handsets, while others have agreements with the telco operators and provide free data to players on their websites.
From a supplier perspective, utilising a quick and agile platform is key as operators need to remain on their feet in these markets. What is the right balance of technological talent and proactive stakeholders for a compliance team?
Te African market is certainly different from other markets across the Americas and Europe, and whilst there are some local manufacturers producing excellent games and content, the
Devon Dalbock General Manager GLI Africa
“Local infrastructure in Africa
represents the major barrier to progress for most operators. They may have favourable
regulatory regimes but, unless operators can reach
consumers, their offerings
may have limited impact. Are mobile telecoms and internet penetration the most glaring concerns for B2C operators? Yes. Internet penetration, the
cost of smart phones, and the cost of data remain an
inhibiting factor in growing this market. However, many
operators have localised their products and put strategies in place to alleviate these issues.” Devon Dalbock, GLI Africa
majority of suppliers to this market are Europe based.
And as you say, agility is key. Unfortunately, we have seen a few of these suppliers not able to quickly adapt their offering to the local market, and this almost always impacts on the operator’s market share.
A proactive team that understands the player, the regulatory requirements, and the technology is certainly key to success in these markets.
Tanzania is one of only a few African nations to have embraced the licensing and regulation of gaming for some time. Operating here isn’t without its challenges, however, with the regulator insisting operators implement software that tracks transactions so they may be verified later. What's your take?
Tis is not unique to Tanzania. Many jurisdictions across Africa, and worldwide, are implementing or have implemented Central Monitoring Systems in order to monitor and track gaming across the various modes.
Often, the CMS is implemented primarily to monitor and verify taxation but can also be used to track and monitor transactions in respect of anti-money laundering legislation and responsible gaming programmes.
Finally, away from Africa you spoke at length about India in our last interview. Have there been any developments - is there an increasing understanding about how regulators can take advantage of online gaming rather than seeing profits go offshore? How closely has GLI and you personally been monitoring and exploring the Indian opportunity?
India remains a huge opportunity where the online real money gaming (RMG) market is estimated to grow to around $5bn by 2025. Tere already four unicorn, or billion dollar, start-up gaming companies in India. With a population of 1.3 billion people, an internet penetration of over 47 per cent, and a highly advanced digital payment sector, this market is set to boom over the coming years.
Te challenge remains around regulation. Te Indian government recently set up an inter- ministerial committee to work on regulations for the online gaming industry, and the Ministry of Electronic and Information Technology released draft regulation for online gaming in early January.
Whilst this is a welcome step in the right direction, the draft regulations do not clarify the government’s position on games of skill vs. games of chance, nor do they clarify the technical standards against which online games must comply
To date, only online games of skill have been allowed in most states, with the exception of two states who also allow online games of chance. Te draft regulations call for the establishment of self-regulatory organisations to register and monitor the activities and games of their members, and whilst they do call for RNG and “No Bot” certification, its not clear against which requirements these elements should be tested.
Te issue of taxation also remains unresolved. Te current GST rate for online gaming is 18 per cent, however a Group of Ministers (GoM) setup by the Finance Ministry in 2022 recommended a GST rate of 28 per cent on online gaming deposits. Te GoM has yet to reach a consensus regarding the final tax rate, while the GST Council deferred its decision again in its last meeting.
We have certainly been working closely with all stakeholders to ensure a regulated, yet robust market . Tis includes government ministries and departments, existing self- regulatory bodies, and operators.
WIRE / PULSE / INSIGHT / REPORTS P89
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