In part 2 of our deep dive into the African market with Tekkorp’s Conor O’Donovan we take a look at African player trends and why a localised approach is crucial for success.
In terms of African markets, South Africa remains one that holds major potential, however it is still something of a “regulatory minefield”.
The process for gaining a license in South Africa is convoluted and filled with bureaucratic hurdles, warned O’Donovan, who stated that the approach for many has been to acquire a second hand license and enter the space that way.
Generally each gaming operator license is linked to a retail premises so an operator entering South Africa needs to ensure that they have at least one retail space, further adding to the complexity of entering the market.
In order to enter the South African market, you have to have an appetite to invest heavily, otherwise success is so very hard to attain.
The threat of unregulated gaming is fuelled by the growth of crypto engagement, however according to O’Donovan, accessing the mass market requires that operators offer access to mobile money, which also has hurdles.
He did emphasise that although offshore operators have a growing presence in Africa and are tapping into VIP players, this share has a ceiling until they engage this mass market with mobile money payments.
“There are aggregators providing Mobile Money payment services for grey market operators, but this is not strictly legal in the majority of countries, and operators should be cautious as many offer dubious services, and there are many stories of fraud”, O’Donovan stated.
“These companies can get shut down when they are detected by mobile operators or regulators too, so although it is definitely happening, scalability simply isn’t there yet.
“Nonetheless, overtaxation, in particular in the Kenyan market, is something that has led to a growth in black market engagement with VIP players almost being wiped out of the regulated market completely. Kenya for example now has state tax and winnings tax, so players are heavily, heavily taxed – with a growing number of more savvy punters shifting offshore.”
A further consequence of the growth crypto penetration in Africa is that crash games can be a major asset in the igaming portfolio of operators.
“Aviator currently dominates the casino space, Crash is growing but Aviator rules, largely due to the aversion players have to adapting to new products. This is a sentiment that holds true across most global markets I believe.
“I do however predict that the market will diversify in the coming years, as innovators in the igaming space continue magnifying their focus on the African market and engaging players in the region.”
A factor that can lead to games getting richer and more heterogeneous in terms of features and content will be the elevation of handsets and networks. Simplicity remains key though, and over gamification for example can be a major turnoff for players who simply seek to entertain themselves within a busy hectic life, many not having the luxury of time that is available to European players.
“It’s vitally important that teams lean on their African knowledge and ensure a localised approach is taken – a copy and paste approach is very much untenable. A lot of European companies think they have a superior product, but this does not always translate to the African market.
“The need for adaptation is crucial. You have to be sure that you have all the must-haves when it comes to the specific market you are entering.”
In terms of consumer trends in Africa, they have shifted in recent times. Interestingly O’Donovan cited the pandemic and the downturn in live sport as a key trigger for the exponential spike in crash game engagement.
O’Donovan also revealed that the mindset of African players is unique to any other market – they don’t want to leave their money in their account and that’s why instant win games can be so effective for engagement. The appetite for the slow grind is lacking, even in terms of sports betting, players want to deposit just before the game on a Saturday and then withdraw at full time.
