n recent years, Africa has gradually turned into one of the most attractive regions for the future of iGaming. Many African countries are enjoying steady economic growth. While the pandemic caused the first GDP contraction in the region in a quarter-century, local economies are quickly bouncing back and expected to record a 3.4% growth in 2021.
The main factor contributing to the region's attractiveness for iGaming operators is the accelerating rate of mobile internet penetration, which is finally making African countries viable for investments in the sector. While sportsbooks are relatively established and raking in considerable numbers, the market is still mostly untapped for online casinos, mainly due to the higher internet data consumption associated with it. Online casino gaming is expected to become more and more accessible as the region's telecommunication infrastructure gets better and the local population's disposable income increases.
In this article, we'll focus specifically on the online gambling licenses available in some of the most attractive African markets – Nigeria, South Africa, Kenya, Tanzania, and Uganda. However, to get started, we'll cover some jurisdictions that attract plenty of investor curiosity but are unfortunately closed.
As is the case in most of the majority-Muslim world, most forms of gambling are illegal for citizens of North African countries. Some of the countries in the region – namely Morocco, Tunisia, and Egypt – allow land-based casinos located within hotels to incentivize tourism, where only foreign citizens are allowed to play. Tunisia and Morocco both run state-owned sports betting companies, Promosport and MDJS, established with the purpose of financing the local sports communities. Meanwhile, Egypt and Morocco's online gambling markets remain de facto unregulated, leaving the door open to foreign operators targeting local players; however, no local license is available.
Many Sub-Saharan African countries don't formally regulate online gambling, so no local licensing process exists. Foreign operators are free to offer their services to local players in these jurisdictions, but it isn't currently possible to obtain country-specific licenses.
Some countries, like Kenya, Uganda, and Zambia, only regulate land-based gambling, and authorities issue licenses that are in theory specific to land-based operators; however, they also offer these same licenses to online operators.
This creates quite a bit of confusion: in Zambia, for example, unlicensed gambling establishments are banned in principle; however, it's not clear whether this applies to online sportsbooks and casinos. Some operators choose to get a local land-based license to offer online services. On the other hand, many major international brands do not accept players from the country to avoid any controversy.
The cases of Kenya and Uganda are equally peculiar. The local regulatory authorities (respectively, the Betting Control and Licensing Board and the National Gaming Board) issue their licenses to both land-based and online operators, even if online gambling is not formally regulated. It is unclear whether a local permit is actually required to operate online in these countries; still, holding one before starting a business is undoubtedly the safest way to proceed.
Kenyan licenses have different costs for local and foreign applicants. A bookmaker license will cost a local about €2,800; meanwhile, a foreigner will have to part with just over €6,250. On top of this, annual fees are fixed at about €850 in both cases. As for a casino license, the cost is €32,800 for locals and €38,600 for foreigners, plus €4,050 in annual fees for both.
In Uganda, locally owned sportsbooks can obtain a license for about €2,300; the fee doubles for foreign-owned companies. For casinos, the costs are respectively €4,600 and €11,700.
Companies must also have a sizable minimum capital (about €60,000) and submit a security guarantee after obtaining the license: €46,000 for bookmakers, €117,000 for casinos.
Nigeria is by far the largest country in Africa and is home to a flourishing online gambling market. The lack of federal-level regulations generated friction between the National Lottery Regulatory Commission (NLRC) and the Lagos State Lotteries Board (LSLB). Each of these entities issues its own licenses.
The application fee for online gambling licenses issued by the NLRC amounts to just over €4,000. Yearly fees amount to about €10,000 plus 5% of the turnover.
The LSLB offers licenses for online lotteries and bookmakers. For both, the application fee is €1,000. Bookmakers are then charged about €100,000 during the first year and €20,000 for renewals, plus 2.5% of revenues.
In South Africa, online gambling is limited to sports betting, whereas online casinos are banned. Licenses are issued locally by provincial authorities (PLAs); the Western Cape Gambling and Racing Board (WCGRB) is the PLA most widely used by operators.
The application fee for a bookmaker license issued by the WCGRB runs at about €750, and the same amount is charged in yearly fees.
While these numbers seem particularly low, prospective operators have to keep in mind that, to obtain a license, they must pass a probity investigation, which itself can command much higher fees.
Tanzania is a fully regulated market of great interest for operators. The Gaming Board of Tanzania issues licenses for both online casinos and online sportsbooks. In both cases, fees amount to just over €500 per month; holders of a bookmaker's license also incur a 6% levy on all stakes. In order to get a permit, operators are required to make significant investments in the country – $300,000 for local companies, $500,000 for foreign-based or foreign-owned ones.
If you are still curious and want to learn more about the emerging African markets, you can check our in-depth analysis of the continent in this article. You can also download our webinar on the topic, originally streamed in April 2021.
Trying to figure out the best investment opportunity when regulations are constantly changing can be tricky, and this is particularly true for the African markets. Here at Slotegrator, we can offer you jurisdictional counseling – a service designed to guide you in choosing the market that best fits your necessities and acquire all the necessary licenses. To know more about it, get in touch with our sales team and book a free consultation.