Urbwise had a chance to sit down with mCheza Chief Executive Officer Peter Karimi to discuss a number of issues affecting the betting firm as well as what he thought the industry’s future would look like.
A fairly recent market research report from PricewaterhouseCoopers (PwC) placed the value of Kenya’s betting market at approximately Ksh. 1.98 billion in 2014 and projected that the combined value of the industry in South Africa, Kenya and Nigeria would grow to Ksh. 37 billion by 2018.
While Mr. Karimi prefers to describe mCheza as an entertainment company since it offers more than just sports betting, he agrees that the there has been and continues to be a substantial growth in the industry which his firm has been keen to tap into.
In fact, since mCheza’s official launch back in December 2015, the firm has expanded operations in East Africa with a new branch in Tanzania and near-term plans of going into three other markets in the region.
One important driving factor attributed to the growing popularity of sports betting in the country has been the penetration of affordable smartphones as he explains. Initially, mCheza’s application was purely an SMS based platform whose main intention was to appeal to Kenyans without access to smartphones. The limitation to this platform was that players were limited to pre-match bets only.
However, as smartphone costs rapidly declined and became more accessible, the next frontier became data and mCheza went online with a new platform. Although the firm didn’t have all the right products at the onset, the app’s users gave plenty of actionable feedback that was instrumental in shaping the next iteration of the platform.
In the beginning of January this year, mCheza rolled out a massive upgrade which Karimi says would help the brand maintain its competitive edge. “In keeping with our promise to offer an exciting gaming experience, we shall be upgrading our platform so as to not only remain competitive, but also provide our customers with a unique gaming experience,” said Karimi.
The platform’s upgrade saw the introduction of new additional features like betting on virtual league games which has become extremely popular in Kenya. This is because it offers an advantage over the regular games in that users don’t have to wait 90 minutes for a single game and can play with much better win rates. In addition to this, users are now able to make deposits and withdrawals without having to leave the app or website thanks to M-Pesa integration.
Furthermore, the firm now offers more than 400 leagues, rugby and athletics games so players can place a bet any time of the day. Players can also bet on politics, T.V shows (i.e. who will take the iron throne), mixed martial arts and even online games like World of Warcraft.
According to Karimi, one of the major opportunities he sees for mCheza going forward involves making the user experience faster. “Africa hasn’t been able to enjoy a fast experience as far as depositing, withdrawing, placing bets, issuing payouts and mCheza can fill this gap,” he says.
The company continues to innovate and has been exploring the use of virtual reality in its casino games for users with the right accessories and also has plans of launching a revamped jackpot product with new bonuses for existing and new users. It is also branching out to traditional arcade games trying to shift the experience from offline which would require significant infrastructure to online.
First, apart from the recently imposed tax on betting companies, Karimi considers illegal, unlicensed, undocumented and unregulated betting machines commonly found in estates or kiosks as the major challenge facing the industry since the payout is fixed and the chances of winning are near zero.
The proliferation of these machines has created a negative perception of the broader industry with people lumping them together with legitimate betting outfits which poses a huge reputational risk.
Secondly, it appears that a number of people are not clear on the difference between sports betting which requires some level of skill and lotteries which are purely based on luck. Lastly, misleading marketing campaigns and advertisements from some betting companies could end up hurting the industry’s credibility.
When asked what most Kenyan’s preferred wagering on mCheza’s platform, Karimi revealed that football games took the top spot. He attributes this to what he calls the symmetry of information in that people betting on these games have access to the same kind information. For instance, in a match between Kenya and Brazil the outcome is somewhat easy to predict which illustrates this concept.
Even with the current taxation issues in play, Karimi doesn’t expect this to dampen the growth prospects of the betting industry and expects mCheza’s growth to continue being fueled and driven by the gaming business.