Multichoice Turns to Betting Division for Growth Amid Decline in DSTV Customers

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Multichoice
Multichoice

Multichoice, the pay-TV operator, has seen significant growth in its betting business in Nigeria, despite a decline in subscribers for its main services, DStv and GOtv.

The company reported a 37% increase in users for its betting platform, KingMakers, for the financial year ending March 31, 2024.

The financial results released recently highlighted this shift, showing an 18% drop in DStv and GOtv subscribers, attributed to economic hardships and three price hikes in the past year. This suggests that more Nigerians are turning to betting as a way to cope with inflation, seeking to multiply their limited funds through gambling.

The company’s online gaming segment provided some relief, with a 26% year-on-year revenue increase from Nigeria in constant currency. However, due to the weaker naira, the reported revenue of $147 million was 26% lower than in FY23.

“KingMakers reported strong growth in the online business in Nigeria, with monthly active users up 37% YoY and online gross gaming revenues up 26% YoY in constant currency,” the company stated. Despite the currency challenges, the business reported a positive EBITDA of $2 million and a retained cash balance of $113 million to fund its growth initiatives.

Overall, Multichoice reported a loss of 4.148 billion rands ($224.87 million) for the year ended March 2024, up from a loss of 2.9 billion rands ($157.21 million) the previous year. The company attributed this to foreign exchange losses in Nigeria, Kenya, Zambia, and Angola.

Multichoice ventured into the betting market in Nigeria by acquiring a 20% stake in BetKing, now KingMakers, for R1.3 billion in 2020. It increased its stake to 49% in 2021 for $281.5 million, making its total investment in KingMakers R5.9 billion. The company aims to leverage its extensive sports coverage to boost the betting business.

Internal data from KingMakers revealed that 77% of DStv subscribers are active bettors or engage in match predictions, offering a substantial customer base for the betting product. According to a KPMG report, Africa’s gambling market was predicted to reach $37 billion by 2022, with sports betting driving most of the growth. The Gross Gaming Revenue (GRR) for sports betting in Africa is expected to rise by 17% by 2027, with online betting revenues growing from $2.9 billion to $5.5 billion.

Multichoice acknowledged the sports betting industry’s impressive growth projections as a key factor behind its acquisition strategy.

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