Yogonet interview with Tumaini Mlay, Market Analyst at Shikana Law Group

"Improvement in payment methods has played a significant role in Tanzania's iGaming growth"

"We expect the segment of online casinos will continue to grow as more operators start to integrate online casinos into their platforms as we have seen happening from December to date," Tumaini Mlay tells Yogonet.
2020-08-31
Reading time 3:07 min
A market report released by the Group found that sports betting, retail casinos and SMS lottery had the largest market shares in terms of gaming gross gaming revenues for the financial year 2018/19 in Tanzania. Online casinos had the highest growth rate, and revenue sales more than doubled. The analyst tells Yogonet iGaming operators have integrated mobile money services on their platforms, which has greatly facilitated online payment transactions.

You have done some research on gaming in East Africa. What are your findings?

Shikana Law Group has prepared a market report on the gaming industry in Tanzania that we expect will be available by mid-September. The report examines key factors driving the expansion of the gaming industry in Tanzania, key market trends, and identifies leading market players, provides insights to consumer preferences and market forecast. Those interested in reading the report can sign up at shikanalawgroup.co.tz to be notified when the report is released. 

To briefly highlight a few findings in the report: Sports betting, retail casinos and SMS lottery were the gaming activities that had the largest market shares in terms of gross gaming revenues for the financial year 2018/19. Virtual games are increasingly popular among customers that want faster payouts; these games have become a popular source of entertainment both online and at retail outlets. Online casinos had the highest growth rate for the financial year 2018/19 and revenue sales more than doubled during the period. We expect this segment of iGaming will continue to grow as more operators start to integrate online casinos into their platforms as we have seen happening from December to date.

What in your assessment is driving the growth of iGaming in Tanzania?

Some of the factors that are driving the growth of iGaming include mobile money payments, love for sports, DSTV, high mobile and internet penetration rates, a favorable business environment and overall macroeconomic conditions. There is a strong correlation between mobile ownership and internet penetration in the country as 96 percent of internet users access the internet through their mobile phones. In the same vein, mobile money services have enabled iGaming consumers to transact online payments, which would have otherwise been impossible without the use of mobile phones. There are currently more than 45 million mobile network subscribers and this number is expected to increase by 10 million in 2025, expanding the consumer base for gaming operators. Additionally, Tanzania has a young population that is projected to reach 89 million by 2035, with 63 percent of the population under the age of 25 which is essential for sports-related gaming activities such as sports betting, which primarily attract the younger generation.

Your research has shown that iGaming is growing in Tanzania by leaps and bounds. Aside from football, which other sport is also driving the growth?

Aside from football, basketball, volleyball, tennis, table tennis and ice hockey are also quite popular. However, football remains by far the most popular gaming sport. Other gaming segments that are spurring iGaming growth include virtual games and slots.

With iGaming growing in Tanzania, how have improvements in payments contributed to the growth?

Improvement in payment methods has played a significant role in the growth of iGaming in Tanzania. Traditionally, Tanzanian consumers made retail-based gaming payment transactions via debit or credit cards, or via cash payments withdrawn from the bank or ATM. However, cash is still the dominant payment method for daily transactions and the percentage of users that own bank accounts, not to mention debit/credit cards is still low compared to high income economies. For instance, according to the 2017 Global Findex survey, 93 percent of adults in high income economies held private accounts at financial institutions, compared to 58 percent of adults in developing economies. Within sub-Saharan Africa, the figure was much lower: only 33 percent of the adult population held an account at a formal financial institution. For this reason, alternative payment methods have become popular– notably, mobile money services that are implemented with mobile networks operators that allow users to send and receive payments using their mobile phones. iGaming operators in Tanzania have integrated mobile money services on their platforms as an accepted payment option and this has greatly facilitated online payment transactions.

Mobile phone users have surged in Tanzania with over 45 million handset users. What percentage of youths in the country own mobile phones?

A national representative survey conducted by FinScope in 2017, indicated that 52 percent of 16 – 24-year-olds owned a mobile phone. The proliferation of cheaper mobile phones that are widely available across the country and the cost of service are strong factors that are leading to increased levels of mobile ownership by the youth in Tanzania.

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