- Africa’s gaming market is estimated at $1.9 billion this year and will hit $3.33 billion by 2028.
- With increased connectivity, Africa’s online gaming industry is firmly on a growth trajectory.
- The pandemic slashed global revenues from the casino industry 31 per cent in 2020 compared to 2019.
It may be late in joining the casino industry but Africa’s online gaming industry is certainly making up for lost time. And it is doing so online. Currently, Africa gaming market is estimated at $1.9 billion. It is expected to reach $3.33 billion by 2028, growing at a compound annual growth rate of 11.62 per cent.
The pandemic caused a 31 per cent decrease in global casino sector income in 2020 compared to the previous year. Projections show worldwide casino hotel market will rise by an average of 4 per cent starting in 2020. As it did with the hospitality and tourism industries, the COVID-19 pandemic hit the sector hard. Global casino hotel market relied on customer footfall to casino premises.
Pandemic hit casino gaming industry hard
With the need for social distancing, and travel curbs, the pandemic severely affected the casino gaming industry. The casino industry, however, is benefitting greatly from the shift to internet commerce. Online gaming is growing in Africa at an unprecedented rate due to the region’s rapid smartphone usage. Exponential expansion in internet connectivity is powering the growth.
Africa’s youth are a sizable market for the gaming industry due to the continent’s high youth unemployment rate. There are countless gaming establishments popping up, and you cannot turn on a radio station without hearing practically constant betting alternatives. Government revenue from the gaming sector is rapidly expanding.
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“The enhancement of mobile technology and its associated use cases have unleashed technological evolution in the region. The surge in overall smartphone usage leading to internet adoption has further leveraged the rise in the adoption of everyday use cases such as gaming,” reads the report in part.
In the Middle East and Africa, as well, the overall number of 5G subscribers may reach 60 million by 2024, accounting for around 3 percent of all mobile subscriptions in the region, according to an Ericsson Mobility Report.
The online gaming sector in Africa will undoubtedly expand even more and more quickly as a result of this improved connectivity.
Market growth of gaming industry
As of last year, an estimated 13 per cent of internet users worldwide were from Africa powered by internet penetration of just about 40 per cent. The rise in the number of internet users in Africa will significantly augment the market growth of the gaming industry.
The industry’s phenomenal growth and anticipated future expansion are currently influencing technological advancement. Businesses have already begun to invest in creating mobile devices specifically for gaming or at the very least with built-in gaming functions that supposedly use less bandwidth.
According to the source, MediaTek declared plans to release a ‘future-ready smartphone’ specifically for the South African market last year. The MediaTek Helio G95, along with several different generations of the processor, will be released, according to the company. These products are targeted at the premium 4G gaming smartphone segment.
With companies like Elon Musk’s Starlink already knocking on East Africa’s doors, the growth of internet accessibility in Africa is also being driven by the increase in online gaming and its inspired new technology development.
“Last year, the average data traffic per active smartphone amounted to 2.89GB per month. This overall rise in the average data traffic per active smartphone will exponentially drive the market’s growth,” researchers noted.
Global casino hotel market
Online gambling is catching up to lost time despite the difficulties the global casino hotel sector suffered during the pandemic. Increase in online gambling is a challenge for casino hotels because they have already made significant investments in physical infrastructure.
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“The market is expected to benefit from the growing popularity of online gambling and the continued expansion of the gaming industry in emerging markets,” the report reassures stakeholders.
In Tanzania, the government reports that gaming revenue increased by six percent to $57.8 million during the just-ended financial year. According to the Gaming Board of Tanzania, revenue increased to $57.8 million in 2021/22 from $54.5 million prior.
Today, online sports betting makes up 45 per cent of the South African gambling market, “a starkly different picture to just 10 years ago when casinos held 80 per cent of market share,” attests the South Africa National Gambling Board.
Online and physical gaming shops
However, despite the revenue potential of both online and physical gaming shops and stalls in Africa, many countries are seeing the need to step in to control the segment. In Uganda, a parliamentary committee is pushing for a total ban in daytime betting.
In Kenya, tough tax measures have been deployed to control the number of youth participating full-time in gaming. Kenya has imposed taxes on all bets, both wins and losses.
Right along with the increased taxation, major gambling companies such as SportPesa have seen their businesses ruffled. In April 2021, Kenya revoked SportPesa licence over allegations of tax evasion. As a result, a recent government survey reported that thanks to these measures, “gambling as a good source of income fell by half from 2019 to 2021, from 22.7 per cent to 11.2 per cent,” reports the AP.
However, in Tanzania, the government has reduced gaming taxes. A major gaming platform in Tanzania is Betway. Local media quotes the platform’s Tanzania Country Operations Manager Mr Jimmy Masaoe saying; “the government has reduced winning tax to 10 percent from 15 percent which has attracted people to stop using offshore sites which were depriving the companies’ income.”
