Nigerians spend $5.5 million daily on betting as young people struggle to make ends meet in poor economy
The Nigerian economy is facing a critical challenge as citizens collectively stake an estimated $5.5 million daily on betting, a staggering figure that highlights a national preference for high-risk, quick-money ventures over the formal capital market.
This trend, coupled with a massive surge in cryptocurrency trading, is starving the nation of crucial funds needed to build key infrastructure, according to Emomotimi Agama, the Director-General of the Securities and Exchange Commission (SEC).
Agama warned in an emailed statement seen by Bloomberg that this massive diversion of funds is a major impediment to economic growth and capital formation.
The $5.5 million daily gambling spend is staked by more than a fourth of the country’s nearly 240 million people, sharply contrasting with the fewer than three million Nigerians who invest in the capital market.
The preference for betting is fueled by Nigeria’s severe economic headwinds—double-digit inflation, a nearly 70% depreciation of the Naira since May 2023, and widespread poverty—pushing many to seek rapid financial returns. This has created a highly lucrative environment for betting companies.
Betting is not new in Nigeria; it dates back to the colonial days. Premier Lotto, founded by Kessington Adebukunola Adebutu in 2001, was the first indigenous gaming company in Africa’s largest economy.
Sports betting gained momentum in 2009 with the establishment of Nairabet, and other platforms like SportyBet, Bet9ja, and 1xBet soon followed. Major betting operators like Bet9ja and SportyBet command significant market share, with Bet9ja’s annual revenue estimated to be between $500 million and $750 million.
While figures for SportyBet are less consistent, the Nigerian sports betting industry as a whole is estimated to generate over $2 billion annually, highlighting the enormous scale of capital being channelled away from productive investment.
Compounding the problem is the popularity of cryptocurrencies among young Nigerians. Agama noted that more than $50 billion worth of crypto transactions were conducted between July 2023 and June 2024.
“Youths roam the streets of major cities in the country trying to earn a living. Social investment programmes where the government pays youths between N20,000 and N30,000 have been short-lived so they have turned to sports betting as a temporary fix,” Yelwa Mohammed, a professor of financial economics at the University of Abuja, told The Africa Report in 2023.
“It is a way of earning income that has become popular over the past three to four years. Although it is not a sustainable source of income, it is safer than getting engaged in criminal activities.”
The result of this investment imbalance is a severely underdeveloped capital market. Agama pointed out that the value of listed assets-to-Gross Domestic Product (GDP) in Nigeria is only 30%, a figure dwarfed by South Africa’s, which is more than three times its GDP.
This low local investor participation makes it difficult to plug the nation’s annual infrastructure gap, which is estimated at a colossal $150 billion. “An appetite for risk clearly exists, but not the trust or access to channel that energy into the productive sector,” Agama stated.
To address this, President Bola Tinubu enacted a new investment and securities law earlier this year, bringing digital assets like crypto under regulation.
The SEC also plans to create new products and deploy technology to attract investment, aiming to redirect the public’s existing risk appetite toward formal, productive economic sectors.
