Several efforts by the Federal Government of Nigeria or its agencies to establish a fully structured betting company or lotteries commission failed after huge funds were sunk into the projects. At the onset, the investment looked promising but withered within a few years, indicating lack of interest from the target population who were medium income citizens. Government was not able to establish the real reason for the failure. Private business practitioners who wanted to tap from the growing youth population to grow the industry also failed, leaving the sector for street urchins and miscreants who saw betting as home for hooligans. But in the last ten years there has been a resurgence of interest in that very casual investment channel, which Chris Ubah says has indicated an upswing; providing a lot of succour and pains to many Nigerians. For the unemployed and the poor it could be another way of getting the much illusive daily bread in today’s Nigeria. Again, the English Premier League (EPL) and other variants of football competition have ignited the football frenzy.
Nigeria’s betting industry is on the upward swing amidst the ailing state of the country’s economy. For more than one decade now, the government has been struggling to reset the economy, with a view to restoring it to the path of sustainable growth. But curiously, while the economy is defying solutions, one sector that appears to be awash with growth is the gambling business which in the recent years has been recording phenomenal growth, indicating that prospects are positive if the government can put its acts together.
Today in Nigeria, the practice has assumed tremendous dimension. It has become a way of life for the youth who spend their money and time on the business. As pointed out in the recent report by PwC, a globally acclaimed management consulting conglomerate based in Nigeria, “the gaming industry in Nigeria has continued to expand, benefitting from the large and youthful population, improving internet penetration, and the increasing access to internet-enabled devices.” According to a 2015 publication on Football Betting in Nigeria, most bets are placed in bet shops while an increasing number of customers are placing bets online. Our research indicates that there are about 182 million mobile subscribers in 2021, from 153 million in 2016. The expectation is that as the number of internet Subscribers in Nigeria increases, so will the number of gaming users.
Sports betting has slowly emerged as a lucrative segment of gambling, leveraging Nigeria’s huge football culture. Some of the big leagues, such as the English Premier league, and the Spanish La Liga, have millions of fans in Nigeria. Betting provides Nigerians the opportunity to earn from what they love, as reported by PwC, despite the temporary tremor in econo
government should not be oblivious of its negative consequences, which primarily relate to the increase in the number of players who suffer from gaming addiction, PWC said. There is also “the issue of uncontrolled growth of the gambling industry in Nigeria which currently lacks identity (ID) verification. Because of this, a number of gaming portals do not conduct a thorough check of users”. This has led to a growing number of scammers who use the players’ personal data or directly their money. So it is very necessary to strike a balance between reaping the economic rewards and ensuring responsible betting practices. As Nigeria continues to evolve, sports betting will remain a powerful player in shaping its economic landscape.
Currently, in Nigeria, gambling is not well regulated. Although there is a gambling law in place, many illegal casinos operate in the country. The legal land-based casinos are located in the two largest cities. The biggest casino is The Federal Palace Hotel in Lagos. Nigerian law focuses on activities to reduce money laundering and illegal gambling.
However, there are various laws that regulate gambling and gaming licensing at both the federal and state levels. Some of the laws that regulate gaming in Nigeria include the National Lottery Act 2005, National Lottery Regulations 2007 (as amended), Lagos State Lottery Law 2004 and various laws of other states. A sports betting license in Nigeria can be obtained at either the national or state level, depending on the type of business operation an applicant wishes to undertake. An applicant who wishes to operate online throughout Nigeria must obtain a national sports betting license, and if the applicant intends to open betting shops across a certain state, Lagos State for example, apart from the national license is also expected to obtain a gaming license from the Lagos State.
According to Law Allianz, a legal firm that specializes on gaming and betting , there is no obstacle when depositing money to foreign or local bookies, although betting limits exist as defined by respective individual bookmakers. Users deposit money using bank cards, e-wallets such as Skrill or Neteller, and most recently USSD services. There is no legal restriction or service blocking, hence, gambling is defined to include different elements of gaming in each legislation. At the national level, the National Lottery Act, 2005 defines gambling to include “any game, scheme, arrangement, system, plan, promotional competition or device for the distribution of prizes by lot or chance, or as a result of the exercise of skill and chance or based on the outcome of sporting events or any other device which shall be operated according to a licence”.
As an example at state level, the Lagos State Lotteries (Amendment) Law 2008 defines a lottery as “any game, scheme, arrangement, system, plan, or device for distributing prizes by lot or chance and any game, scheme, arrangement, system, plan or device, which the Commissioner may by notice in the Gazette declare to be a lottery”; while the Casino and Gaming Regulatory Authority Law of Lagos State 2007 defines gambling as “the wagering of a stake of money or anything of value on the unknown result of a future event at the risk of losing all or a portion for the sake of a return, irrespective of whether any measure of skill involved or not and encompasses all forms of gaming and betting”.
Therefore, the definition of gambling is specified by the applicable laws of the different jurisdictions.
Land-based gambling in Nigeria is known to mean any gaming premises/operations located in the real world with physical outlets as opposed to solely online presence. This ranges from casino outlets to betting stores/bookmakers. In reality, however, most transactions are web-based, even in the land-based facilities.
Although online gambling is not yet clearly defined in Nigerian legislation, in practice it involves any electronic form of gambling, whether through the internet, telephone, television or radio communication, or any other kind of technology for facilitating communication.
The most common form of remote gambling offered in Nigeria is sports betting, which is also conducted through mobile gaming (via telecommunications networks) and the internet using smartphones.
The National Lottery Act, 2005 states that an offence is committed when any person forges any lottery ticket or causes any ticket to be forged; knowingly attempts to sell any forged or stolen ticket; alters any number or figure or falsifies or otherwise disfigures any ticket with the intent to defraud; with the intent to defraud takes, or converts to his own use any proceed from a lottery operated by the licensee; or knowingly sells to any person under the age of 18 years any ticket in a lottery operated by a licensee. Whoever is found guilty of an offence shall be liable on conviction to a fine or imprisonment, or both.
The huge Nigerian interest in various games, especially football has indicated a rising investment in the game as more people pay more money for betting and gamming while making more money from same on dail
activities in the country since 2016.
Over the years, several indicators have been seen to have induced the growth of the Nigerian gaming industry, according to a report. Because of its marketing niche, sport betting has become a mainstream phenomenon in Nigeria. On account of this, numerous operators now offer diverse sports betting online opportunities, from football and basketball to tennis and boxing, all accessible with unprecedented convenience. With an estimated 60 million Nigerians actively involved in sports betting, and over 50 betting sites operating in the country, sports betting is experiencing a massive surge in Nigeria, and it is consequently, having a huge impact on the economy.
Reports reveal that Nigeria has become the second largest online gambling market in Africa, behind South Africa, with a Gross Gaming Revenue (GGR) of $58 million in 2018. According to projection by top accounting and auditing firm, PwC, GGR will rise by 16% over a five-year period. Nigeria is one of the most competitive markets in gambling in Africa. The size of the population and internet exposure of the residents creates the right conditions for online gambling companies to operate in. Some of the legal operators are AfriBet, Bet9ja, Naijabet, Sportynet, iBet, Betway, Nairabet, BetLion, Blackbet, Betking, 1XBET, Premier bet, BetPawa, Cloud Bet.
The economic benefit of increased gambling business in Nigeria cannot be denied. Reports say that the industry has been growing at a rapid pace, bringing in revenue to the nation’s budget. These funds are spent on the development of the healthcare system, education, and so on. Also, as the industry grows, it provides jobs for a vast number of Nigerians, from odds compilers to customer support staff. Nigeria is said to belong to the sub-Saharan African region, which is the leading market on the continent, with a total gambling industry GGR of around $2 billion and an Internet penetration of 54%.
The advent of globalisation made possible by the emergence of ICT revolution which has led to the introduction of online sports betting platforms has revolutionized the industry in Nigeria. This has made betting business more accessible to a wider audience, breaking down geographical barriers and allowing individuals to participate from the comfort of their homes. The convenience and ease of use of these platforms have fuelled their rapid adoption.
The sector is helping in the promotion of financial inclusion effort of the government. Individuals are empowered to save, invest, and contribute to economic growth. This has been made possible by the integration of digital payment methods. With this development, individuals who were previously excluded from the formal financial system can now participate in the economy. Additionally, online sports betting industry has also fostered entrepreneurship. Now, many Nigerians have taken advantage of this booming sector by becoming affiliates, agents, or starting their own betting businesses. This entrepreneurial spirit contributes to a more dynamic and diverse economy.
Available statistics shows that Nigerians spend about $5 million a day on gambling. There is also the forecast that the annual turnover of rates can be about $2 billion, a part of which goes to offshore sites. Bonuses on these platforms are bigger which make addition benefits for Nigerian players and gives more pleasure to the game. Recent forecasts say that gross gambling revenue in Nigeria has to grow by more than 16% in 2023.
In 2020, the Federal Inland Revenue Service (FIRS) announced plans to impose a 7.5% value-added tax (VAT) on betting activities in the country. This basically means that if the plan sails through, bettors will have to pay an extra 7.5% for every stake. For every N100 they stake, they will pay an extra N7.50, adding up to N107.5. There have been few changes that are bound to have far reaching effects on the sector. The plan was vehemently opposed by the operators under their umbrella body Association of Nigerian Bookmakers, which stated the impracticability of the introduction of a 7.5% VAT on sports betting. The betting operators cited examples when people bet about 100,000 Naira to win 105,000 Naira and wondered how practical that would be if the punter had to pay 7,500 Naira as VAT to get winnings of 5,000 Naira.
It is believed that the plan has been temporarily suspended after operators kicked against it. It is feared that the implementation of this tax or any other additional taxes is bound to discourage players from patronising licensed operators and will probably drive the industry underground.
Several of the sub-nationals, in a bid to increase their internally generated revenue, are reviewing their laws for the purpose of setting up their own regulatory bodies or for the purpose of empowering the tax offices to perform such functions. The effect of the flurry of regulatory activities by the sub-nationals is that most of the country will eventually be regulated.
But while the gambling industry is adding values to the economy, the bases. Considering the rising level of unemployment in the system, many Nigerian youths have considered betting as full time job provided they can make enough money that will enable them to have a bet once in a short while or on daily basis. Many wage earners in city centers like Lagos, Abuja, Port Harcourt, Aba, Owerri, Benin, Kano spend the entire day’s earnings on betting and go on to even borrow money to make new stakes. As a matter of fact, it is not all losses for bettors as life has been moving on for them.
The last continental football finals in Abidjan conducted by CAF raised the impression that betting was at the center of its popularity as betting companies indicated that the future of the game can be better. More Africans in the developed cities and growing suburbs are making more money from betting as the habit grows in leaps and bounds. In Nigeria in particular students run shanties where football betting is conducted as agents of the established and registered outfits in the much bigger cities. Popular names like Naijabet, Betnaija, Nairabet, Betking etc are spots in every university campuses in Nigeria. It is as popular as barbing salons, also run by students, as sources of residual income while in school.
