Nigeria Gambling Regulation

B. Atanasov
Boris Atanasov is an iGaming writer with over four years’ experience, creating engaging content on slots, video poker, roulette, and blackjack.
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Gambling Regulation Home to 212.3 million people, the Federal Republic of Nigeria is a West African country that borders Cameroon, Benin, Niger, and Chad. It consists of 36 states plus the Federal Capital Territory, where the national capital, Abuja, is located. The country’s modern history began in 1914 after the unification of the British Protectorates of Southern and Northern Nigeria.

Nigeria officially gained independence from Great Britain in October 1960 and then endured three years of civil war, corruption, and social unrest from 1967 to 1970. The country did not achieve a stable democracy until the late 1990s. It held its first relatively free and fair democratic elections in March 2015, when a majority of Nigerians voted for Muhammadu Buhari.

Gambling may not be the first thing that comes to mind when people think of Nigeria. Nevertheless, the country is home to a promising and rapidly growing industry that includes legal land-based casino gambling, sports wagering, and lotteries. Nigeria has one of the most competitive gaming markets on the African continent, a status many industry analysts attribute to increasing internet penetration across the country.

Laws That Govern Gambling in Nigeria

Several pieces of legislation have shaped the Nigerian gambling market we know today, starting with the 1977 Gaming Machines Prohibition Act. This Act prohibits the import, operation, and ownership of gambling machines.

1977 Gaming Machines Prohibition Act
Unlawful Gambling under the Nigerian Criminal Code
The National Lottery Act of 2005

Taxes and Licensing Conditions in Nigeria

1 National Lottery Regulation

The 2007 National Lottery Regulations set out in detail all the requirements that licensed lottery operators must meet. Licensees must provide the local regulator with extensive data on accounting, security, and internal control systems. Each licensed operator should also aim to develop and maintain a diverse range of games to maximize the profits generated by the National Lottery.

2Licensing Conditions

Operators must provide detailed information about their games, including their rules, format, payout structure, and the channels through which they are delivered to players (i.e., online or offline). The National Lottery logo must be clearly visible on all authorized lottery tickets, as must the minimum age requirement for purchasing them.

Article 10 of the National Lottery Regulation Act states that licenses are normally valid for ten years unless revoked or suspended by regulators. A license can last up to fifteen years at most.

Permits can be renewed provided that operators submit their renewal applications three months before the licenses expire. The country does not limit the number of available permits. Licenses granted by state authorities at the regional level are typically valid for one to five years and are also subject to renewal.

It is important to note that the National Lottery Regulatory Commission (NLRC) does not issue casino gaming licenses. Instead, regional gambling authorities provide various licenses, including those for casino gaming. For instance, in the state of Lagos operators can obtain permits for online sports wagering, scratchcards, pool wagering, and interactive games.

License application fees vary by state jurisdiction, ranging from ₦50,000 to ₦2.5 million.

3Tax Rates in Nigeria

Licensed gaming operators must pay taxes on their revenue in jurisdictions with regulated gambling industries. Nigeria is no exception, taxing authorized gambling businesses based on their gross revenue. Federal tax rates vary by product type. Lottery operators must contribute 20% of their gross gaming revenue (GGR). Regional taxes also apply, but they differ across Nigerian states. Lagos, for instance, imposes a 2.5% regional tax on operators’ GGR.

Operators that offer legal sports wagering must pay 1% of their monthly turnover to the Nigerian regulator, while another 2% goes to the National Lottery Trust Fund. If operators use short-code services to provide sports betting, they must pay 2% and 3% of monthly turnover to the regulator and the Trust Fund, respectively.

In 2019, the Federal Inland Revenue Service (FIRS) announced plans to impose a 5% value-added tax (VAT) on all internet gambling transactions. The proposal sparked outrage among Nigerian operators, who argued that it could destroy the local industry and drive players toward unlicensed sites.

Online Gambling in Nigeria

Online Gambling When it comes to online gambling, Nigerian law lacks a specific regulatory framework for this segment. Despite the absence of concrete written regulations, operators can obtain permits to offer several forms of online gambling. Permit types vary across Nigeria: some states require dedicated licenses, while others issue generic licenses that cover both land-based and remote operations.

Licensed lottery operators may offer their products online, provided they meet certain conditions stipulated by the corresponding regulator. For instance, the regulator in Lagos is the local State Lotteries Board, while in Anambra it is the State Gaming Commission. Online sports betting, fantasy sports, and lotteries are allowed in Nigeria. The National Lottery Regulatory Commission (NLRC) maintains a registry of all approved gaming operators in the country.

Nigerian law does not define online gambling precisely, but the term is generally used for gambling conducted through any electronic channel, including television, telephone, the internet, mobile applications, or radio communication.

Operators are expected to provide Nigerian players with adequate channels for customer support and dispute resolution. They must register their software with the Nigerian Office of Technology Acquisition and Protection (NOTAP).

As of the time of publication, the country lacks technical measures to protect Nigerians from unauthorized remote businesses. Locally licensed operators insist on laws that restrict unlicensed firms from servicing customers based in the country. The NLRC took steps in this direction in September 2020, when it requested cooperation from the Nigerian Financial Intelligence Unit (NFIU) in the fight against illegal remote gaming operators.

Responsible Gambling and AML Policies in Nigeria

The country currently lacks specific responsible gambling policies applicable to licensed operators that serve local players. Generally, operators must ensure they conduct their gambling operations with fairness and social responsibility. However, no specific tools enable players to manage and monitor their gaming activities.

Before accessing any betting products, customers must confirm they are at least 18 years old. Studies have shown that although many Nigerians view gambling as risky, they also regard it as a quick way to earn money.

Underage Gambling in Nigeria
Anti-Money Laundering Policies

Policies on Gambling Advertising in Nigeria

Policies on Gambling Advertising Like other aspects of Nigeria’s regulatory framework, gambling advertisements are overseen at both the federal and regional levels. When marketing their products and services, licensed operators must stick to the guidelines of several federal entities, starting with the Advertising Practitioners Council of Nigeria (APCON).

Gambling companies must also consider the guidelines of the Nigeria Broadcasting Commission, the Federal Competition and Consumer Protection Commission, and Nigeria’s Communications Commission. Under the 2005 National Lottery Act, each operator must submit a draft code of practice to the gambling regulator (NLRC). The NLRC must approve the draft, which should outline the company’s marketing and public relations policies.

Gambling-related ads must not appear near schools, universities, or other centers of education. Radio or television ads should not be broadcast at times when young children are likely to watch, which applies to most of the day. Marketing materials should never target vulnerable individuals (for example, problem gamblers), children, or adolescents. Sanctions for breaching the advertising regulations can include bans on offending ads, hefty fines, license suspension, or complete revocation, depending on the severity of the violation.

Conclusion

Conclusion The growing use of mobile devices and rising internet penetration have been game-changers for Nigerian gambling enthusiasts. Online sports betting enjoys tremendous popularity among Nigerians, with approximately 60 million residents aged 18 to 40 betting actively. The country has legal online lotteries and sportsbooks that operate with authorization from the NLRC.

Nigerian players are welcome at many offshore gambling sites that gladly cater to their every need with versatile gaming libraries and different payment methods. Industry experts believe that the local gambling industry will witness further growth in the future, especially if the authorities enforce more specific regulations for the online segment.

Stricter supervision and clear-cut regulatory requirements could not only attract more Nigerians to online gambling but also generate additional tax revenue for the country and encourage economic growth.