South Africa: Betting Trends And Opportunities
| By Aaron Noy
Africa’s most mature regulated online betting market continues to grow, with more than 30 local and international bookmakers now staking their claim. Roy Coughlan looks at how operators can capitalise on this growing demand
Over the last decade, South Africa has established itself as the biggest gambling country on the African continent, according to figures from PricewaterhouseCoopers. In terms of revenue the rainbow nation is ahead of Nigeria and Kenya, with the market continuing to show yearly growth. According to a statement released by the National Gambling Board (NGB) in June 2019, the South African gambling industry is growing at a predicted compounded rate of more than 5%. This will see it worth R35bn (€2bn) by 2021! While casino and lottery dominate the share of gambling industry sectors, sports betting is responsible for 21% of gross gaming revenue in the country. Recent football tournaments, including last year’s World Cup, have helped boost these figures, but sports betting promises further opportunities for expansion.
The market’s potential is clear to see. Google Trends shows how interest in sports-specific betting terms has increased since 2014 (see fig 1 above). Many new operators have since arrived, with an influx of local and international players beginning to stake their claims. There are currently 43 active Western Cape-licensed bookmakers (retail and online). Traditional retailers are mobilising their online offerings and new online-only brands are offering the South African public a smooth and easy way to place their bets. The question is, what is the market betting on? Unsurprisingly, global sports such as football and horse racing are taking the lion’s share of the money, followed by rugby, cricket and tennis (see fig 2 below). Golf, basketball and MMA are also popular, albeit to a lesser degree (figure 3 below). The main opportunities for growth lie in tournaments and events. Operators should focus on capturing the attention of those South African punters who are looking for markets, or educating them on promotions around events that there is measurable search interest in.
STAND-OUT SPORTING OPPORTUNITIES IN SOUTH AFRICAHORSE RACING Each year, Google query volume spikes for the Durban July, South Africa’s answer to the Melbourne Cup or Kentucky Derby. Tailoring campaigns around the Durban serves as an opportunity to attract the serious punter as well as the casual bettor. MMA AND BOXING (LOCAL AND INTERNATIONAL) Combat sports are on the rise and hence popularity in homegrown fighters and local promotions is soaring. With South African MMA fighters signing up to fight in the UFC and the country’s boxing talent increasingly venturing abroad, there exists ample opportunity for operators to promote their markets and offer specials on one of the more favourable sports to bet on. RUGBY WORLD CUP The Springboks are hoping to put the last World Cup behind them and make an impression in Japan. They’re a team in transition and most local punters will likely be betting with their hearts. Rugby punters will be attractive to operators both in terms of volume and value. The net gaming revenue from rugby bettors is typically higher than from football punters. ESPORTS The global rise of esports has been accompanied by a new segment of savvy and well-informed punters. The market might be small in South Africa, but it is growing at a rapid pace. The latest Fortnite World Cup Finals drew more than two million viewers through Twitch, and with the game boasting one of the highest payouts for an individual sport, it’s time for SA bookmakers to take notice. Satellite television company DStv now has a dedicated channel for esports – a sign if ever there was that the hype is real. From an operator’s perspective, the growth of the market means it is imperative to stay ahead of the technological trends and provide cutting-edge products. This brings with it the challenge of acquiring customers to grow player books. Most bookmakers with land-based offerings or retail outlets are focused on making sure the shops are making money. This provides a gap for web-based brands to focus on sharpening acquisition sources to promote the brand and actively acquire customers. The following acquisition sources and opportunities should be considered: GOOGLE ADS This is likely the best option for any gambling operator, provided they can show an up-to-date licence to gain whitelisting. Buying search traffic through Google is cost effective and allows an operator’s marketing team or agency to have full autonomy over how much budget can be spent and how ads are customised. It also provides an opportunity to measure performance against KPIs and goals. Note that Google restricts the promotion of gambling-related content, so the channel can be used only for the prospecting of new customers. Google policies do not allow for the retargeting of existing customers. FACEBOOK/INSTAGRAM Leveraging off Facebook audience data is by far its greatest selling point as an advertising platform. A great way to engage your target customers is by creating custom audiences who are likely to interact with your offers and messaging and ultimately place a bet. Creative ad options are quite vast but usually video gets the best results. A word of caution: Facebook licencing is notoriously slow and turnaround on applications can take two months. TWITTER Twitter is a great channel to use to get in front of an audience seeking information, opinion and counsel on all things sportsrelated. Consider a Twitter user on a Saturday morning, scrolling through their Twitter feed, searching for an update on his or her team’s line-up for the 3pm kickoff. It’s a perfect time to drop in a targeted free-bets ad on the EPL. Twitter allows for several targeting methods and leverages off its audience data so that brands can engage with the right customers. SNAPCHAT Snapchat is especially interesting as the channel is usually aimed at a younger demographic. Indeed, questions have been asked as to whether it should be used for the promotion of products and services aimed at the over-18 market. Industry heavyweights such as Betfair and Paddy Power have used the channel, though, so it’s surely a chance to target an important, complex audience. Building a community on Snapchat and curating new and fresh content organically is another opportunity.
REDDIT According to SimilarWeb, Reddit is the 18th most popular website in the world. The Reddit community has an intense appetite for news, content and information, something that is particularly evident when it comes to sporting activity. This provides a hub of potential customers, who are all looking for opinions, sports streams and news stories. South African sites can publish promoted gambling content and should look to test and learn. YOUTUBE Gambling advertising on television is under constant threat of being outlawed or, at the very least, being restricted to after the watershed. Not being able to promote brand awareness during primetime television and major sports fixtures is an issue faced by many operators worldwide, and YouTube is becoming a much more viable alternative for many enlightened operators. It offers opportunities to target sportspecific channels and highlights videos, and Google audience data will help immensely in refining the viewership that is right for the brand. PARTNERSHIPS AND INFLUENCERS A relatively new marketing tactic is for brands to align themselves with individuals or companies who can then promote the brand’s products and services to their followers. These can be powerful allies where the right partnerships can be immensely successful. Gambling brands should look to these as allies in the quest for acquisition, as fruitful partnerships with a growing influencer can quickly blossom into a powerful voice for a brand. Sadly, difficulties with red tape, licensing and support from the above suppliers is all too common – particularly with Facebook. Operators will need to show patience for their adverts to see the light of day. This is the time for South African operators traditionally focused on brick-and-mortar operations to test and learn the online mediums at their disposal. Being bold and outlining test marketing budgets for specific channels can help unearth powerful opportunities for acquiring a new generation of sports bettors.