How much owners of sports and virtuals betting shops of either bet9ja, nairabet, surebet, merrybet or any of the numerous betting companies are interested in turning their franchise into a profitable venture.
In March 2013 I was granted permission to extend the fast growing brand of sports betting, Bet9ja to Oyo state and environs. At that time, KC Gaming Networks, the company behind Bet9ja had in less than 6 months managed to pull off what none of the incubent sports betting companies had been able to
do. They were able to create a platform for the masses.


By building a business around the empowerment of entrepreneurs to be agents of the company, and positioning the product such that it was the most compelling offering available to punters, agent numbers soared and sports betting penetration increased in erstwhile under-served areas.

N.B: This guide applies only to agents of sports betting companies that pay commissions based on sales and not profit, or a combination of both. I particularly think paying commissions on NET profit i.e what is left from sales after winnings are paid, is like a food seller that sells you food and gives you a bowl of potent laxatives to “wash it down”.
So, on to why you are here…
Starting and running an online sports betting business is like running any other business, you need to be able to answer the following questions:

1. How much will it cost me to set up?
2. How much will it cost me to run the business and how do I manage these costs.?
3. How much will I make as commission?
4. How much will I keep as profit?
5. When do I break even?

1. How much will it cost me to set up?
Before you ask yourself this question, you need to understand your environment; the potential number of customers, the level of awareness and the disposable income. An agent in Molete in Ibadan will only put himself under undue pressure by building his shop out like one he saw in FESTAC in Lagos. The potential numbers are more, awareness higher and disposable income larger in the latter than the former.
Also, as a cautionary note, ensure you have a secondary source of income. This is so you can fund the day to day expenses of the business for the months prior to the break-even month.
To start, you will need the following

1. A shop. Take the next few lines as gospel.
   1. Rent a shop ONLY because it is rightly located. This will mean it is in a densely residential area. A mix of 70 residential/30 commercial is just fine.
   2. Be VERY wary of rent. In big cities like Lagos 100K to 150K p.a is good enough, while in areas such as Ibadan, Ado, Ogbomosho, Kubwa, 40 to 80K p.a is just right. Let the “resident” customer density guide your assessment of rent, and not the “passing” customers i.e a major highway junction will not be as lucrative as a minor “agboo-ile” junction.
   3. The shop SHOULD be sizable. A 10ft by 12ft will be too small. Try to go for a 12ft by 15ft or larger. The bigger, the better as your customers will be comfortable while they wait their turns.
   4. If you decide to use an existing business’ shop, ensure the items on sale are not “handy”. I once had an agent who sold shoes and wanted to combine the business of sports betting. He lost 13 shoes (note not pairs i.e different legs) in his first week.
2. 2 Laptop (or desktop) Computers: Desktops are preferable in relatively insecure environments, but tend to require a bigger generator to power. [ 2 Used laptops will go for between 50K and 70K]
3. A 10ft x 6ft x 1ft counter made of wood (preferably of board): Having this helps separate your cashiers (attendants) from your punters (customers). [10K to 20K]
4. Chairs (for cashiers) and benches (for customers). [10,500 to 15,000]
5. Should you be interested in customizing your shop, you can paint it in the colour of the brand you are selling.
6. A generator. Please I urge you not to use I-better-pass-my-neighbor. This generator is notorious for burning adapters. A decent 2.2Kva generator will serve well. [28K to 35K]
7. Internet Modem. I recommend you go with any of the LTE providers, as faster speed equals faster money making. The likes of Spectranet, Smile and Swift will serve well in areas where they have coverage. If you do not fall within these areas, use the 3.5G GSM providers. In order of preference, I recommend Glo, Etisalat, Airtel and MTN…and if those don’t exist, you’ll have to struggle with CDMA 1x from O’net or Visafone or GPRS from the GSM providers. If you use laptops, get a modem that supports Wi-Fi for easy connectivity. [18K to 40K]

You most likely will be given the following items by the company:

1. Thermal receipt printers. New POS-58 or POS-80 units come with a roll of paper.
2. A Banner, to advertise your business to passers-by
3. An account on their platform.

Of course, you get the last 3 items after you must have paid the signup fee [ 50K to 500K]. I’ve been informed some (new) companies will give you these items for free.
Conservatively, you will require between 250, 000 to 400, 000 to setup, depending on your location.
To summarize this section, I strongly suggest that you prepare to setup at least 2 shops in order to benefit from economies of scale.

Running an online sports and virtuals betting shop can be tasking yet rewarding. 

2. How Much Will it cost me to run the business and how do I manage these costs?
   There are some costs that you cannot do without, while some others can be managed. Find a breakdown of some of the costs you will need to incur on a monthly basis per shop
   1. Fuel: To run your generator, you need to fuel it. Depending on the situation of the public power in your area, you either may not have to use generator at all – in some areas, they have constant power only during the day, or you may have to run on generator for most of the day – majority of cities, town and villages in Nigeria. For this you may spend between 5000 and 20,000 Naira per month
   2. Internet: This business requires being online. Besides just being online, you need to purchase service from a good provider, otherwise all your effort to satisfy your customers will be frustrated. This will cost you between 2500 and 10,000 Naira per month
   3. PHCN: Well, either you use it or you don’t, you get billed – and you have to pay. So set aside between 500 and 4000 Naira per month; because if you are on post-paid, your bill will never be proportionate to your consumption.
   4. Salary: This is one area where one can easily get it wrong. First, do not pay your “sales people” a fixed amount. Since you get paid commission, which is performance based, you need to also ensure that your sales people are rewarded based on performance. I recommend a mix of salary + commission (e.g 1 – 2% of sales).
   1. Other Miscellaneous costs: These include dues, service charge, generator maintenance e.t.c.
   You can manage your expense on powering your business by purchasing a UPS or Inverter to be used in-between power outages. You will need to monitor your Internet usage to ensure that your staffs are not watching Nigerian movies on YouTube in their free hours. Also you need to protect your WiFi access so your carelessness does not turn it to “free-to-air”. As for salaries, employ the best hands and be prepared to compensate them when business is booming.
3. How much will I make as commission?
   This depends on the company you opt for. Commission will be calculated as a percentage of either gross sales or gross profit. Usually, you will be offered between 5 and 10% of gross sales or 30 and 50% of gross profit. In addition, your commission may be subject to profit/loss sharing, and some companies offer a mix of both gross sales and gross profit. As a business person, your aim is to maximize every opportunity after careful analysis has been done. By this I mean you may mix and match offers, based on factors such as competition, level of awareness, proximity to the city, timing, risk appetite e.t.c. Generally, stay away from offers that involve a profit/loss sharing, no matter how juicy the percentage may look.
4. How much will I keep as profit?
   This is not difficult to derive. Whatever is left from your commission after you have paid all your expenses will be your profit. To increase your profit, you can either do two things, 1. Reduce your cost or 2. Increase your commission by increasing sales or profit. On the average your target profit should be between 30 and 60% of your gross commission. The higher, the better.
5. When do I break even?
   Again, like every other business, you do not break even the instant you start. Factors that affect this are numerous, but the bottom-line is the volume of sales that is achievable. The more revenue that can be generated by your shop, the faster you will break even. Plan your business such that you break even in 3 to 5 months. I will like to restate the need for you to have a secondary source of income or savings while your new business stabilizes. You will need this to keep the business rolling while it matures.

It is easy to benefit from economies of scale in this business. Once you are able to set up your 3rd, 4th…shop, so long as they are within the same geographical area, you can share internet plans among the shops, rotate staff based on shop demand, reduce the impact of cashier departures amongst many others.
In conclusion, there are few businesses that offer the mileage, coverage and rewards that online sports betting offers, and I hope in your search for a guide, you have found this post helpful.

Do you have any question? Drop your comment below.