In this interview with John Bamidele, Abayomi Oketope, Chairman of the Casino Owners Association of Nigeria delves deep into the casino industry in Nigeria, its regulation, taxes and what Promatic Group has in store for the future
Abayomi Oketope is the CEO of SAX Innovative Network, the Nigerian partner of Promatic Group, a Polish slot machine manufacturing company owning 9jackpot. The company, which is spread over eighteen states in Nigeria is a household name in the casino industry.
In this thrilling interview with John Bamidele, founder/CEO gbc.ng, a leading b2b digital gaming magazine in Lagos Nigeria, Oketope who is also the Chairman Casino Owners Association of Nigeria reveals business activities of Promatic Group and the casino industry in Nigeria in general
Gbc.ng: Promatic has been operating in Nigeria for over fifteen years providing slot machines and other casino services. Tell us what has kept Promatic in the Nigerian casino market for so long.
Yomi: The population of Nigeria is approximately 203 million people. Currently, the birth rate is 24% year on year, and the rapid development of the economy and technology is conducive to running a business. Promatic Group is one of a very few Polish companies that are dynamically developing in this part of the world. Our company has successfully entered the local market due to its advantage in four main areas - operational, organizational, technological and service.
The star of our business operations in Nigeria was not an easy task to complete. Promatic Group had to adjust not only its products, but also the entire business development strategy. While the brand is well-known in Poland, in Nigeria the company had to start everything from scratch. To enable a quick success at the local market, our company aimed to emphasize the strong connection to the market requirements and needed being associated with a local brand identity. Therefore, the 9JACKPOT brand was established and turned out to be a key business decision from the perspective of developing the entire group on the African market. The brand quickly gained the trust of local customers, including through locally tailored visual identification, high quality products and comfortable conditions of use for its customers.
At Promatic we strongly believe that products must always directly respond to our customer’s expectations so the primary focus of our company is always a great product dedicated specifically to the market where it is to appear. Beyond great product offer, Promatic provides its Partners with additional assistance and expertise, ensuring that our Partners can find solutions to meet their specific needs and this strongly translates to our success in Nigeria.
Gbc.ng: What separates your slot machines from other slot machines in the market?
Yomi: Products destined for the African market differ from those present in other locations around the world. Our company policy shares the idea of adjusting the product to specific market requirements so they are durable and reliable even at the extremely specific conditions in which the equipment must function. Our EGM Terminals offered in Nigeria must be much more resistant to high humidity and be highly resistant to mechanical damage. This is related to issues regarding slightly different logistics of the equipment as well as the intensity of its use by the local players.
Our 9JACKPOT brand is also famous for a special jackpot system that is specifically dedicated to Nigerian market and can be accumulated in three stages - single terminals, a group of terminals connected by a network and a global system made up of all terminals of the brand connected in one system. It is an innovative product not only in the Nigerian market, but also in the entire global industry.
Gbc.ng: In terms of market share for slot machines, what market share do you have?
Yomi: Due to specifics of quite complicated legal restrictions and differences between state and national regulations, we do not own the numbers that represent our exact market share of slot machines in Nigeria. Yet, we are undoubtedly the biggest slot machine and slot games provider in Nigeria. At the moment, Promatic (and 9JACKPOT brand) is present in 18 states of Nigeria; Abia, Akwa Ibom, Anambra, Bayelsa, Cross River, Delta, Edo, Enugu, Imo, Lagos, Nasarawa, Ondo, Oyo, Rivers, Ogun, Plateau, Kwara states and the capital - Abuja.
Promatic, together with its official Nigerian contractor Sax Innovative Networks Ltd, has been effectively developing a land-based network of arcades and game centers for the last couple of years. More locations are being opened successively at a very fast pace. Everything is done in compliance with the highest brand standards and the legislative requirements. This perfectly depicts how well our company is able to use many years of experience and quickly adapt to the requirements of a given market.
Gbc.ng: 9jackpot the brand name for your casino is in eighteen states in Nigeria, what attracts players to your casino knowing full well that the market is keenly contested.
Yomi: 9JACKPOT is a brand that is associated with several elements of key importance regarding our business activity in Nigeria. First, it is an operator belonging to the Promatic Group. Although the brand was created for the Nigerian market itself, it uses native Promatic products, i.e. slot games, EGM Terminals and accompanying software dedicated to Nigerian users so players can fully identify and enjoy entertainment on equipment created specifically to fulfill the African market needs.
Establishing the 9JACKPOT brand turned out to be a key business decision from the perspective of the development of the entire group in the region. The brand quickly gained the trust of customers, including through locally tailored visual identification, high quality products and comfortable conditions of use for its customers.
Gbc.ng: For your casino to have that kind of spread, customers must have had a good customer experience which brings them back. What are your products offering that Nigerian casino players love?
Yomi: We always put customers first. Unlike many other suppliers, Promatic Group provides its services comprehensively, which heavily impacts the end-user experience. Having a trained team on site, we are able to react quickly and help both our business partners and regular game centres’ visitors in any challenging situations or large projects. sOur desire to create the best gaming experience is at heart of everything we do at Promatic Group. There are two priorities if it comes to making this vision a reality: the great products, and looking after our customers constantly!
Our comprehensive industry knowledge gained over the years allow us to use multitude of communication techniques, promotional actions and loyalty programmes that now translates into a new vision: to create a world of best entertainment with great user experience and multi product features as its main advantage. As a result, we offer a wide range of great products that enhance the players’ gambling experience.
The wide range of Promatic services also includes comprehensive servicing. We were able to start up our local business structures and provide the required technical assistance in a very short time. In this way, we strongly stand out from other global brands that are not able to guarantee such a quick response through a numerous network of dependencies and poorly built local structures.
Finally, to achieve competitive advantage Promatic is constantly optimizing its products and products of its contractors for the Nigerian user, all led by the innovative and previously mentioned 9JAKCPOT system.
Gbc.ng: In building these products, what are the main things you take into cognizance?
Yomi: Currently, Promatic Group is a comprehensive supplier of products and services tailored to the expectations of our customers with the main goal to achieve a competitive advantage by combining innovative software solutions with high quality products. Our products are well-recognized in Europe, Africa and Latin America due to the fact that when it comes to creating our products, we are extremely flexible and always adjust our offer to the individual requirements of our partners and a given region.
Our gaming machines are fully customisable products. It is our business partner who determines the configuration in which the final versions are released. On top of that, we provide full technical support and adapt products to the market in which our products are to appear. For our products, the quality is always the key. Our desire to create the best quality products has been the main goal of Promatic Group from the very beginning of our business activity. We are extremely engaged in creating new, original slot games, and we trust that our passion and experience always meets the highest expectations of both players and operators.
Our wide industry experience and know-how developed over the last two decades allow us to educate and develop the industry in Nigeria, which we predict in the next few years will grow by several dozen percent annually. The company also strives to continuously optimize processes and raise the standards of its services. This also applies to the products themselves available within the entire group. Combined with high flexibility, they position themselves as a reliable business partner for all Nigerian entertainment industry players.
Gbc.ng: Promatic owns the slot machines and software in 9jackpot. Tell us more about your business relationship with Promatic.
Yomi: 9JACKPOT is a brand that is associated with several elements of Promatic Group business activity in Nigeria. First, it is an operator belonging to the Promatic Group. Although the brand was created for the Nigerian market, it uses native Promatic products, i.e. gaming EGM terminals and the collection of our slot games.
However, 9jackpot is probably most famous as our Global Nigerian Jackpot System with up to 2 million NGN to be won. Benefiting from years of experience in building elaborate Jackpot systems, we have created 9JACKPOT, dedicated to the Nigerian market only. 9Jackpot is a customizable Jackpot system for our Multigame Collections that Nigerian players absolutely love!
On site, Promatic creates local structures that include managerial staff and showroom service - 9jackpot team. The company passes on all its know-how gained over the years of experience, so as to contribute to the development of local business as much as possible.
Gbc.ng: How have you been able to sustain your operation despite Covid-19?
Yomi: Last year wasn’t an easy one for the gambling industry and the pandemic situations caused by Sars-Cov2 also affected Nigeria. The situation has put the country in an economic lockdown. We had to adapt to this new reality, adjusting our business strategy in the region at a very large scale. However, we were far from being idle at the time and devoted a lot of effort and time to strategic, creative planning and we entirely focused on expanding the network of new locations under the Nigerian 9JACKPOT brand.
We luckily managed to conduct some renovation works in our key own- and partner locations, increasing the standard of our premises and the quality of services provided. As an operator, we were also able to cope with many anti-covid restrictions imposed by the Nigerian government. However, it is important to highlight that Promatic quickly and eagerly adapted to a number of restrictions as the company's philosophy includes care for its players, customers and local business partners.
Gbc.ng: As a major player and an investor in the Nigerian casino industry for over two decades now, what is your assessment of the industry?
Yomi: We are very proud that we were able to become a key player of the gambling industry in Nigeria. We all know that gambling as a part of national industry, if properly handled, constitutes a money spinning venture to the Government. Yet, for a company like Promatic, the legal and regulatory control of gambling in Nigeria may often appear complicated and grossly inadequate to changing market requirements and industry trends, The traditional method of gambling in Nigeria requires licensing provisions at different regions-level and vary for various parts of businesses that sometimes seem to be very conflicting. The nascent internet and mobile technologies have also provided new methods of gambling which create a tensed atmosphere for the control of gambling activities especially due to the seamless operations of these technologies.
We believe that there are some legislative changes or improvements required that industry leaders are seeking to take cognizance of the special challenges occasioned by the innovative form and existing trends in gambling.
Gbc.ng: You are the chairman of Casino owners in Nigeria, what are the major issues faced by your members and how have you been able to address them.
Yomi: We can categorise the major issues under the following headings:
Regulatory – we have to contend with different regulatory environments from State to State, there is no uniform regulation and every state and in some cases, even Local Government determines the regulatory framework for operators differently. There is also the misconception that the Gaming business/ Casino is a money spinning business hence it attracts different layers of government scrutiny and interventions for the purpose of taxes and levies. A unified system of regulation and gambling taxes will encourage more investment in the business.
Taxes – The industry contends with a myriad of taxes levied primarily by State regulatory authorities, state taxes and local governments through levies, penalties, fines etc. The most obnoxious tax is the intention of the Federal Inland Revenue to charge Value Added Tax on Stake, this is not done anywhere. There is a need for a deeper understanding of the business by tax authorities to enable them to charge taxes that are equitable to the industry. There is a local government in Lagos state that is charging operators in its jurisdiction what it calls Entertainment tax to the whopping sum in excess of seven million Naira per annum ! This particular tax cannot be found under the list of approved taxes and levies chargeable by local governments yet they use threats of force or lock down of office to intimidate operators.
Security – Operators in the industry must provide their own armed security and a retinue of Bouncers to guarantee the security of customers and staff at a stiff cost.
Pandemic & Protests – The lock down occasioned by Covid-19 and End Sars protests affected our members as we were unable to operate for almost half the year in 2020 yet there was little or no rebate or subsidy from the government.
Crowding – there is the issue of Casinos crowding at very short distances to each other thus leading to unhealthy competition for a small pool of customers.
Cultural environment – Unlike in Europe, Asia and Americas where Gaming is accepted as a social activity for relaxation, in Nigeria, Gaming is seen as antisocial and anti- religion to be discouraged and even out rightly banned. However, some progressive states led by Lagos state are blazing the trail in realizing the potentials of gaming as a tool in driving employment, tourism and hospitality. These states have robust and dynamic regulatory boards that regulate the industry and promote responsible gaming.
Gbc.ng: Talking in terms of regulation now, the lopsidedness in gambling regulation in Nigeria is really affecting the industry, don't you think we need a unified regulatory regime.
Yomi: It is worth repeating that a new gambling regulation in Nigeria with unified regulatory environments from State to State is needed and expected by the industry leaders. Again, a unified system of regulation and gambling taxes will encourage more investment in the business and the industry will be better served under a unified regulatory regime rather than an operator dealing with thirty six different states and rules.
Gbc.ng: Operators in the country are complaining of high taxes as this is affecting their operations. Believe its time a take a critical look of the gambling tax in Nigeria considering the harsh economic condition they are operating in.
Yomi: The Gambling industry is a business like any other business and is subject to all taxes payable by all companies like Company Income Tax, Education Tax, VAT on vatable goods and services like sale of drinks. We are also subject to state taxes like PAYE, Development Levies etc , Radio/Tv, Liquor license, Signages fees etc imposed by local governments. Outside of these taxes, there are specific taxes unique to Casinos and Gaming like License fees, Machine taxes, Good causes etc . The most dangerous of all these taxes is the attempt by FIRS to subject Stakes to VAT, if this attempt succeeds, the Gaming business will shrink and eventually die. In a lighter mood, we have a state in the North Central that is even attempting to subject Punters winnings to income tax! So, who pays the Punters for his losses?
Gbc.ng: What's your advice for foreigners and locals alike wanting to operate a casino in Nigeria?
Yomi: Always put customers first. This, along with great local partnerships guarantees that businesses new to the market can build a long-term unique and suitable cooperation. This enables finding and implementing the best system solutions for the business, easy adaptation of your business to changing market requirements, local market experience and expertise on how to constantly grow your business
My final advice for foreigners and locals alike wanting to operate a casino in Nigeria is to do proper business feasibility, due diligence and have enough Capital for investment, the business is not for the short term, only the long distance runners get rewarded.
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