It was not going to be another normal English Premier League afternoon on this day in “Jojo’s bar”, a neighbourhood beer parlour where soccer enthusiasts gathered to watch their football teams take on opponents.
Things took an awkward twist when Ibe, a staunch Manchester United fan, was seen cheering a rival team.
Asked why he did not seem keen for United to win, Ibe answered, “I bet on the other team to win the game and if that happens I could win N500,000. I am suspending my emotions for cash this time.”
Taking a cursory look at the people gathered at Jojo’s bar, Ibe was not the only one who had “suspended emotions for cash.” Others also had their money at stake, as they watched on with undivided attention and anxiety.
The uncertain outcome of a football game and risky gambling is putting food on the tables of many Nigerians who are increasingly turning to sport betting and Ponzi schemes like MMM to make ends meet in an increasingly difficult economic environment.
Appetite for sports betting and fraudulent investing scams that promise high rates of return, otherwise called Ponzi schemes, have reached fever-pitch in Nigeria this year, as the country battles with its worst economic crisis since 1991.
Yahaya Maikori, CEO Global gaming said the sports betting industry has tripled in size to N120 billion in 2016, from N40 billion 18 months ago. “The growth is fueled by recession,unemployment and it’s affiliation to sports especially football which is tied to our emotion and love for entertainment through sports” Maikori said by phone.
“Daily bets have surged to N15 billion cumulatively across all the betting companies this year (2016),” said Wale Okin, a representative of Nairabet, the oldest betting agency in Nigeria.
“Many are beginning to see this as a source of daily bread and it is not uncommon to see people appropriating a certain amount for betting daily as the pressure on their wallets mount,” Okin said, adding that “More people will partake if there is no dramatic change in their economic situation.”
Mathew Isaac (not real name), a middle-aged former banker who fell on the wrong side of a retrenchment exercise at his bank, three months ago, told BusinessDay that he has had to resort to sports betting, which he claims fetched him a whopping N250, 000 barely two weeks ago, “and it helped solve some family issues.”
“I staked N10, 000 and got N250, 000 in return and although I never liked betting from the onset, I have less options now that I am out of job,” Isaac said.
University undergraduate, Taiwo Akerele (not real name), also told BusinessDay he now does sport betting and would not quit yet, even though he has never won and has lost N100, 000 in the process.
“A friend of mine won N600, 000 after staking only N100 and this is what is encouraging me not to quit until I get something out,” said Akerele, who is studying Economics at the University of Lagos.
“My monthly allowance has lost value more than three- fold due to inflation and my parents say they cannot afford a raise at this time, given the economic hardship, so I am really hoping to get lucky with sport betting,” Akerele told BusinessDay in an interview.
Asides sport betting, Ponzi schemes like MMM are also gaining popularity among Nigerians, BusinessDay investigations show.
Mavrodi Mondial Movement (MMM) is a Russian Ponzi scheme that assures 30 percent interest on money invested, though on annualised basis, real returns are as high as 900%. Korsi (not real name) told BusinessDay that she invested N17,000 in the scheme and got N30,000 within 30 days, delivering an average return of 76%.
Nigerians are flocking in droves to partake in the scheme. Checks on the MMM website, which seemed to be having problems on November 17, showed that more than 1.6 million Nigerians have registered for the scheme. BusinessDay also found that MMM is now the sixth most visited website in Nigeria, according to Alexa ranking, one spot above Jumia, despite the fact that the online shopping mall is currently offering Black Friday discount sales, which records unusually high traffic.
The Central Bank of Nigeria (CBN) on November 17, denied that it had anything to do with MMM after rumours spread that it had endorsed it.
“Nigerians should ignore reports claiming that we approved financial institutions that do not exist. MMM is illegal and we have nothing to do with it” said Isaac Okorafor, CBN spokesman.
But sources in the financial industry say the operators of MMM are feeding off the ignorance of poor and desperate Nigerians.
“I am embarrassed and a bit ashamed to say that I am also patronising MMM but right now, it is working for me and I need the money,” a Nigerian who had tried her hands on MMM said.
“You see, I am a “smart” girl and I know without a doubt that this scheme has elements of fraud. I mean, how do they magnify money in under a month? Something is not right.
“But all that is water under bridge, I did it, it paid me a higher amount than I put in and I think I will do it again this month,” she said.
Nigerian authorities are likely to start clamping down on the scheme soon, sources tell BusinessDay, as it poses a threat to economic stability.
“Authorities will go after MMM very soon and the whole thing will collapse and thousands of Nigerians may lose their money. I can tell you that talks are already on-going to bring the scheme to book,” a government official said.
MMM’s success in attracting Nigerians is also spurring new schemes. Givers Forum is a new scheme that offers 40 percent interest, 100 basis points higher than MMM’s 30 percent. There are many others all operating under different guises and promising hard pressed Nigerians mouth watering returns, even as financial regulators are looking increasingly helpless to tackle their spread.
Nigeria’s economy fell into recession in the second quarter of 2016, as GDP contracted a further -2.06 percent after recording negative growth of -0.36 percent in the first quarter of 2016, according to the National Bureau of Statistics (NBS).
Unemployment is at a record high of 13.1 percent, while inflation has blasted past the required single digit threshold, climbing to an 11 year high of 18.3 percent in October, 2016. http://www.businessdayonline.com/nigerians-turn-to-sport-betting-mmm-as-recession-bites/lalasticlala, dominique, Mynd44, Seun |
