Multichoice Paid R1.3 billion for 20% Stake in BetKing

South African pay TV company Multichoice has paid R1.3 billion – and may still pay another R500 million more – for a 20% stake in Nigerian sports-bet company BetKing.

The BetKing 20% acquisition was disclosed this week by Multichoice CEO, Calvo Mawela, during a news briefing to discuss MultiChoice’s new deals.

It had bought the shareholding “[i]n order to expand the group’s entertainment ecosystem further”, it said in a brief note in its interim results statement.

The first payment was an “upfront investment”, Multichoice said, valuing BetKing at a minimum of R6.5 billion. The additional payment is dependent on earn-out targets, which it did not disclose, up to the end of 2023.

Though Multichoice described BetKing as “pan-African”, it has major betting operations only in Nigeria, Ethiopia, and as of June this year, Kenya, where it entered into a major soccer sponsorship.

In its home country it has built an agent network it says numbers more than 8,000 in part through a commission structure that offers shop-owners up to 30%, for transactions via equipment it provides, with the promise of payment within 24 hours.

In order to hit the high commission payments, agents must push players towards high-risk bets. Those who do not will earn 1% instead.

Multichoice said its group intends “further expand its entertainment ecosystem and revenue prospects by offering new products and services and by pursuing new growth opportunities.”