How to Build a Successful iGaming Start-Up: Lessons from a Betting Operator in Kenya

Starting a betting operator company in Kenya sounds exciting, but the reality is far from easy. With most start-ups shutting down within a few years, it takes more than just a good platform to survive.

In this candid piece, Tony Wanyama, CEO of Motorn Sport Limited, shares what it really takes to launch a new iGaming company in Kenya’s competitive market.

Tony Wanyama, CEO of Motorn Sport Limited Speaks

“Deep Dive into i-Gaming, I got a provider from Europe, who has over 25 years experience in iGaming. Their platform has an international footprint  in both regulated and unregulated markets.

We agreed on a predictable business model (“franchise model”) which was revenue share based. We had to handle all the local roles which included and was not limited to ;  Set up of a local call center full with support staff, acquired all the relevant licences (bookmakers and casino) , integrated with a payment provider plus handle all relevant compliance hurdles by the regulator and the tax authority. Exciting times ahead and we were ready to rock and roll ! 

The Product “A perceived Rolls Royce”

We had a heavy feed, we talking over 70,000 live games a month, over 150,000 pre games, over 5,000 casino offerings, 500 live tables and all the interesting offerings from top providers, over 1,800 markets (where top operators had barely 100 markets), boosted odds, combo boost, cash out on live games, cash back, bet builder the works Indeed the future looked bright since we had something more sophisticated than the competition. I was excited to be part of something big from the ground up. 

Benchmarking on Industry numbers

Unsolicited stats of top betting companies showed that top companies made an excess of 25 Million dollars per month in GGR. A clear sign that a sizable market is available for this business. We set our business plan with subtle targets for growth in a 3 year plan.

Crunch Time

I had my head of marketing in place and it was time to execute the Go to Market Strategy. The custodian of the plan was convincing but from where I sat it was not solid enough and was all over, but I still gave the benefit of doubt and the leeway, autonomy and time to execute and actualize their plan.

Sometimes the end justifies the means.  We tried everything for traffic, from spamming unsolicited phone databases, influencers and fake affiliates streamed into the office….It was pure chaos at 1st, but you have to thrive in this ambiguity and make something out of it. 

We reviewed, stepped up and sanctioned paid media ads for prime spots around sports (both national radio and niche/urban stations), including programmatic ads, that sometimes provided unlimited traffic with no conversions (Probably BOTs).

In the 1st month we registered over 10,000 users. We ran first time deposit bonuses, free spins and all sorts of promotions to keep them coming. On review we noticed that only a fraction of the users were active or having FTDs which were dismal.

In this business its like a bucket that is leaking, there was a need to figure out quickly and fast on what works and what does not work in this market without further experimentsIn a few months, there was no traction, we had hired too fast (over 20 staff with hefty salaries beyond market rate), we hired wrong (with zero experience in betting) and the runway shrank so fast, with slow cash flows we were set for failure and imminent shut down if we did not do something to turn the business around.

I had a lot of explanations for the investors and relevant stakeholders in the company who we had promised a hockey stick growth curve. We had to survive the tough ugly parts nobody was talking about.  

Read Also: Are iGaming Affiliates Outperforming Traditional Search Engines?

Lessons

Have a Budget

The first step is always to have a budget and runway to cover your month on month operations and marketing campaign to ensure growth in terms of customer acquisition and FTDs. (The seed capital should cover at least 12 to 24 months.)

Have a proof of concept

Before the big spend I requested one of the media houses for a media partnership, the CEO requested for a POC to prove the product-market fit, and this was also important for us to justify the big spend.

It is also important to highlight your USP.  How a media campaign succeeds depends on many factors. The spots most effective for the campaign (not necessarily water shed hours but around sports section), what other competing brands are running in between, the scripting to highlight your USP, product knowledge especially for the presenter driven mentions, How creative or catchy where emotional messaging and execution of the story tag around your brands for the ads factoring in responsible betting are critical success factors.

We had sleepless nights scripting, curating content, executing in studios and monitoring the effectiveness of the campaign that drives Customer Acquisition and registrations as well as engagement using all social media handles.

The messaging has to be perceived as authentic to win the target audience. It doesn’t matter how many million dollars you burn, but a shitty product will not fly. Case in point one of the biggest media companies is re-engineering its product after month on month losses despite the media spend.  

Have a solid plan

Always have a solid plan, Have a Go to Market Plan and metrics to measure performance in line with operations when running any solid campaign, for both acquisition, conversions, FTDs and retention.

Digital campaigns especially google ads and SEOs made perfect sense in terms of Cost per Acquisition (CPA) at inception. For the top betting companies investing in key CRM tools and a solid retention strategy is key.

Constant communication of product releases and creative promotions to keep your active users on the edge.  At this point you need cash flows for growth month on month, this is where the rubber meets the road in this business.  

Understand your Customers

Important to understand the customer journey and player life cycle, we had such a high bounce rate and it boiled down to UI/UX, what does the customer see on 1st impression (look and feel of the platform), how many clicks before registration and deposit.

These easy steps needed tweaking to a few clicks to registration and deposit. The key events from sports should be placed well from the top left corner flowing to the right, for ease of  navigation. A very light and fast product is key especially in this market where average to medium phones in terms of capacity is what most users and punters have.

Localization is key

Without the need to copy what works in Europe or LATAM, local nuances are key.  The average punter in Kenya bets small, micro amounts as small as Kshs 10. (Equivalent to US $ 0.077 cents) but in masses.

The average monthly bet based on statistics is between Kshs 5,000 and Kshs 8,000 based on stats from top brands. This involves the local culture, where we have patriotic vs aspirational punters. Most of the brands doing well have a local name affiliation, pitting the consumers more in the way they respond to foreign brand names vis a vis the local ones.

Definine your local market and competition

The Kenyan market is driven by small key market segments, (commonly referred to as the “kadogo economy”) which has seen the success of key models such as safaricom who have reached a critical mass.

It is however important to define your minimum deposit hence reflects on the customer service to user ratio hence customer experience and customer satisfaction. Your product and service level offerings are key differentiators. 

Avoid Heavy Spending on ATL

Avoid heavy spending on ATL mostly radio,TV and billboards from the onset, unless you have the budget to go heavy from the word go. In an overcrowded market the burn rate for the brand, including the differentiators can be high with no guaranteed ARR. Once cash flow improves it’s important to allocate a reasonable percentage back to marketing initiatives. 

Study the consumer trends

There has been a shift from punters playing sportsbook and more or less player fatigue on jackpots running for months and years with no realistic wins for the Grand prize, to where now punters prefer venturing more on crash games such as aviator. The urban punter is also very niche driven and focuses on casino games mostly tournaments such as pragmatic.

While the Kenyan punter is crazy about sports, he/she is an average and not sophisticated bettor compared to other markets like in Europe. He most likely has a limited level of education, for example the trend for normal football games is double chance, 1 x 2 . It was quite exciting for above average bettors who knew how to use betbuilder and combo boost to build their own and bet as they wish, including placing bets on other markets. 

In the first few weeks of product launch, we gathered adequate feedback from focus groups to understand brand perception and reception in the market. 

Trust is key

The idea behind sponsorship of a top football team not only wins the community but boosts confidence of the punters when they watch the branding on live matches. Instant payout is key for unlimited amounts especially for your VVIPs. 

Having solid CSR pillars not only for developing the communities, plus being keen in promoting responsible betting is key in gaining public trust for operators. Major brands have purely survived out of painting the picture that they are larger than life. 

Hiring and continuous training of staff is key

Not only do you need to equip the staff with the right tools but provision of the right working environment is essential for success of a key brand. The calendars running on schedule week on week for different campaigns would not run effectively when any team members were demotivated or absent from their schedule.

This is one of the critical success factors in developing a winning brand. The attitude and bring out the best in GenZ staff requires proper HR mechanisms for effectiveness.

The industry churn rate for HR in iGaming is quite high from other typical business environments. We did a lot of informal channels of communication away from office, tried to have a google like kind of work environment, offered flexibility for remote working for those who set up stable internet with static IP etc. It takes some extra effort to keep them motivated.

Product development is continuous

Constant reviews and surveys to customers especially complaints help you develop the brand with the customer in mind. It is important to understand that a common punter will play on 3 or 4 different platforms.

The need for gamification through loyalty, constant rewards, story maps, badges, tournaments and missions, prize and promotions are KEY in keeping your customers active and engaged. Personification and Segmentation is crucial.

Adoption is crucial

We learned and adopted fast. On days of heavy campaigns and spending, we had to adopt unorthodox tactics to achieve our targets in terms of registration. Some of it included bypassing some protocols where necessary.

However, to adhere to set rules, terms and conditions, it was a prerequisite to provide the relevant KYC documents and verification of account details before any withdrawals were made.

There were many other hidden rules in the game.With the regulator recently enforcing strict regulation on advertising, we are bound to see other more creative ways like the use of affiliates in promoting gaming.

This is as Kenya grapples to move away from the 1966 gaming bill to a new act currently undergoing the motions in parliament before it is effected. There are quite some punitive clauses for operators who will not adhere with the new regulations for those who have reviewed the draft.

Failure is not fatal 

There are brutal lessons in every start up, the success depends on the right execution and the right mix of a lot of aspects to make it work. Sometimes the biggest lessons are just when you take a fall, lift yourself up, roll your sleeves and get going. No success will teach you that.

It’s about surviving these tough ugly parts no one talks about.Once we got over this stage and had some traction, we had to pivot and scale. In this rapidly changing environment we just implemented crypto and are looking to implement AI as a tool to optimize operational efficiency.

We hope to curve our niche and have sights on 7 other countries within Africa.The Kenyan market has seen the entry and exit of huge brands like Betway, Betin, Betking, Sportybet amongst others.

There exists over 225 book makers licence where probably 50 brands have complete platforms with a number of stand alone crash games in this segment. There has recently been an effected by the regulator to crack down on illegal sites. 

My Life Philosophy

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.Theodore Roosevelt