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Sports betting increases M-Pesa volumes

Sports betting increases M-Pesa volumes

M-Pesa volumes for the past one year have grown tremendously pivoted by the rise in sports betting in the country.

In its highlights for the financial year ending March 2016, Safaricom said that M-Pesa revenue grew by 27.2 percent to sh41.5 billion.

Today, there are 30 licensed bookmakers with sports betting licences in Kenya.

Sports betting has exponentially grown since 2013 when the first online sports betting company SportPesa was registered. Statistics released by PriceWaterhouseCoopers (PwC) late last year indicate that the annual gross turnover of sports betting industry in Kenya is $20 million (Sh2.1 billion). The gross revenue is projected to grow to more than $50 million (Sh5.1 billion) in the next three years.

About 10 operators run sports betting using the mobile platforms. They include SportPesa, Betin, Betway, Oxygen 8 (which operates Bet Yetu), Justbet and mCHEZA.

But this growth could have been hindered were it not for moving the M-Pesa servers from Germany to Kenya. Today M-pesa can handle 900 transactions per second, compared with 320 previously.

In a story ran by Bloomberg Safaricom CEO Bob Collymore admits this increase. He says

“We’re seeing tremendous growth. Sports betting are using M-Pesa a lot and had we not done this we would have really struggled to meet capacity there. That sector has now absolutely overtaken everyone else.”

The total M-Pesa transactional value as at 31st March 2016 was sh5.29 trillion.

M-Pesa’s 30 day active users increased to 16.6 million, up by 19.8 percent. There was a 7.43 chargeable transactions per 30 day active users.

Over the past five years, M-Pesa revenues have recorded an average of 21.93 billion.

When it released its financial results, the company stated that

M-Pesa continues to be our key platform to drive financial inclusion. We will drive the growth of savings and loans, grow cashless payments for businesses through M-Pesa and launch new innovative products.

All the local sports betting companies rely on mobile money to bet on games. So far only Safaricom, Orange and Airtel provide the service. But with Safaricom significantly controlling the mobile telephony market, they take the lion’s share of sports betting transactional revenues.

As at December 2015, Safaricom controlled 64.70 of the mobile subscribers market. Safaricom has 24.41 million subscribers, Airtel and YU have a combined 7.24 million, Orange has 4.66 while Finserve has 1.41 million.

The companies makes the money by charging on transactional costs from your account to the sports betting companies. For Safaricom for instance, you are charged sh33 for transfers below sh5000. The amounts increase depending with the risk and appetite of the person betting.


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