Bimpe Akingba: Government Agencies Feed on Vulnerability of Sports Betting Industry
In the past two years, Bimpe Akingba has been on top of the multi-faceted issues in the Nigerian gaming industry. Her involvement goes back to 2014 when she was head of legal and compliance at 1960 Bet, the biggest operator in the sports betting sub-sector. Her current designation as Executive Secretary for the Association of Nigerian Bookmakers (ANB), the trade group of sports betting operators, has conferred on her the face of an industry buffeted on all sides by government agencies at the federal, state, and sometimes local levels. Akingba recently welcomed the Gaming Week team to the ANB secretariat for a healthy discourse.
Tell us about goals of Association of Nigerian Bookmakers
The association is the trade group for investors in the sports betting business. Operators might be competitors, or they are competitors. Definitely, there are common issues affecting them, and this brought about the need to set up an association for the purpose of having a common voice, especially regarding issues affecting the industry.
I must commend the operators. In terms of regulation, it hasn’t been an easy ride for them. There is the issue of double taxation and the overlapping regulatory function between the federal regulatory body and the states. That has eaten deep into the profit of the operators and has opened space for some other government agencies to come in and feed on the vulnerability of the industry.
We have seen government agencies that are not part of the regulators come up and pick the operators and accuse them of under-remitting either to the federal of the state governments. On the path of regulation, it is a crossfire for them; but that is why the association is here. One of the main aim of the association is the resolve this double taxation issue. That has been our focus. Sometime in 2020, the association instituted
a legal action on behalf othe operators against the National Lotteries Regulatory Commission (NLRC) and the states lotteries board, asking the court to interpret who has the powers to regulate the industry for the court to actually analyse the industry as it is right now based on the evidence we put forward- that the industry as it is right now; the way it is being taxed does it amount to double taxation? That is something that regulators have been running away from for a long time. None of them actually sees it from the viewpoint of the operators. Our main question to the court was does what the federal and states do amount to double taxation? If the court answers in the affirmative, then is double taxation constitutional? The court answered in the affirmative that taxation of the industry as it is today amounts to double taxation; and that double taxation is unconstitutional.
That is a point that I am happy is out there and the regulators; whether state or federal, whatever seems to be their drive now know that what is currently happening in the industry is an anomaly and it needs to stop.
Once we resolve the issue of regulation and we have a standard, other things will fall in place. That is the major issue.
Because of that issue, regulators now only focus on revenue generation. There are other aspects like responsible gaming which regulators seem not to be focused on. Operators are proactive about it, but they can do more if the regulators paid more attention to it. Right now what is required is for operators to put 18+ on their banners. Those who have retail shops are required to put 18+ on their shops, in their adverts and other communication materials and then ensure that under-aged persons are not placing bets on their platforms and in their shops. Operators have been requesting for identity cards, especially in the online space at the point of onboarding the customer or at the point of claiming your winnings. The point is that nobody can achieve 100% percent compliance on that; especially online, some might present IDs that doesn’t belong to them.
What about steps to sensitise the public on underage gambling?
The association has been working with Gambling Alert, which is a group focused on the ills of gambling addiction. We have partnered with that organisation.
Recently we went to schools, and I was there personally to let them know that gambling is not for children. Your business as a child is to focus on your studies. Gambling is supposed to be fun. It is entertainment. If it leads you to a place where you are stealing to be able to place a bet. That is a problem. Do children have the mental capacity to handle a loss? A young person should be in school, studying their books to achieve whatever it is they want to become in future. It is no way good for an under-aged person, so we went to some schools to enlighten them.
Interestingly from our engagement, it was shocking to me how these students understand some gambling terms. You will know that they are actively participating in it. This is something being done on the side of the operators. Despite the awkward regulatory environment, operators are taking proactive steps to ensure that their activities are conducted in a responsible manner. However, on the part of the regulators, their major focus has been on revenue generation.
What’s the perfect scenario in the gaming industry to end these overlapping regulations?
Collaboration in the regulatory space between the federal agency and the states is the way forward. Especially in the online space, the states cannot claim to be able to properly regulate that. They will need the Federal Government. You are talking about the Internet space, which are regulated by sister agencies of the Federal Government. It is easier for the Federal Government to do that and the NLRC to access these sister agencies and sort of sanitize that space. On the issue of remote operators, it is easier for the NLRC to partner with sister agencies and block those illegal operators. Even in the area of responsible gaming, collaboration is the way forward. A lot has to be done in the responsible gaming space. Another one is advertisement. Nobody is talking about regulation regarding responsible gaming in that space. Should there a time belt that you can advertise on television? It should not be time that you expect children to be awake to be able to view all these things. The adverts should be such they are not attractive to children.
What’s done by the ANB about illegal operators?
The existence of illegal operators in the Nigerian gaming ecosystem is real. What has always been discussed is how to cut the off. There is the attempt to block them and make them come inside to get a licence. This is an understanding we believe the regulators have. Therefore it came as a surprise when the NLRC came up with the Federal Inland Revenue Service (FIRS) that there is the plan to start giving remote operation permit to foreign operators. It was information that came to us a shock. The FG might be looking at it from the point of revenue generation, and this is why there is this back and forth between the federal authorities and the states; because the focus has always been revenue generation.
The FG should look beyond revenue generation to the implication of licencing these operators remotely. The first question is, how do you hope to ensure compliance, since these companies do not have a physical presence in Nigeria? What benefit is it to local operators to have competitors who are not dealing with issues of double taxation? Double taxation is a major problem for local operators. It is a major source of profit drain. There is the issue of repatriation of funds for foreign operators who are locally licensed here. Local operators are generating employment. Why would the FG, in the gaming industry, allow some people outside Nigeria, who are not generating employment to cash in on the industry? Apart from generating employment for Nigerians the locally licensed operators are paying gaming taxes. They are paying company income tax, PAYE; all of these other taxes. Besides direct employment there are other types of employment generated. These people have vendors. In advertising, they are engaging local advertisement agencies.
There are no benefits to allow the illegal operators into the country. In coming up with the remote license suggestion, how does the federal regulator intend to ensure that they carry out an assessment of the operating cost for local operators, so that they can decide on a fair amount to ask from remote license or to make it unattractive to them so that they can seriously consider coming into Nigeria. None of these have been done. Again, the focus is on revenue generation. That can’t be the only reason. Beyond revenue generation is the issue of responsible gaming. How do you even ensure data privacy? How do you know what they are using the data of Nigerian citizens for outside the country.
The tax platform they are proposing to use for remote operators is supposed to be domiciled with the FIRS. Is the FIRS a regulator for the industry? Why is that platform not domiciled with the NLRC that is the regulatory body? Another question is, will this platform not be extended to the local operators?
We all are stakeholders and our interest is to see a standardized gaming industry. We are engaging with the NLRC. We will continue to engage with them. Also the state lottery boards are stake holders. They should make their position clear on this. Nigerian citizens are stake holders. Revenue generation can’t be the only thing we are considering regarding remote license. I believe that the NLRC will keep an open door policy on this and ensure that the position of every stakeholder is taken into consideration before they make their final decision either to go ahead or to suspend.
What’s the relationship between the ANB and other sub-sectoral interest groups in the gaming Industry?
Since I assumed office, which was two years ago, I know that no one can work in isolation, I have been in contact with the lottery association and then the casino association, as well. At the end of the day, whatever it is that we are doing affects all of us as a whole. We have been collaborating. Presentations at the National Assembly, we did together. We presented a unified position. Recently, we had a training for sports betting, casino and lottery operators. We share information and intelligence. We are in good terms. The industry is about all of us.
Having worked for an operator before your current employment, what would you say has been pivotal in both assignments?
I have been with an operator. I joined the gaming Industry in 2014. I was with 1960 Bet, which was the biggest operator at that time. Since then, I would say the sports betting industry has grown tremendously. At that time we could count on our fingers the number of sports betting operators in Nigeria. Now, we have so many foreign companies in the country. It is a good one for us. I was with 1960 Bet as the Head of Legal and Compliance. I joined the ANB in 2020. My services were requested by the trustees of the ANB as one of the early lawyers who worked in the industry. In the course of working as the legal and compliance person in 1960 Bet, I had related with the few owners of the sports betting brands at the time. I wasn’t a stranger to them. I was called upon that they needed somebody to manage the Secretariat. That was the year of COVID-19. Nobody envisaged that kind of challenge. I am not a stranger to the industry. I know about the operations. I know the regulatory issues, legal issues and all of that. This has helped with my smooth operations; the fact that I understand proper operators of the industry by reason of having worked with a leading brand in sports betting. The ANB has engaged in a lot of activities. Members can testify to that because I met on ground six active members. Right now, I have over 30 active members who gladly renew their subscriptions annually. If the association is useless to them, they will not renew their subscription. That is a testament that the association is actually relevant. I can’t take all the glory for that. I have an amazing team. I have received a lot of cooperation from the operators in terms of information, guidance, documents, and connection on how to go about things. There are members who are very helpful regarding that. It has been a collaborative effort to get the ANB working as a trade association. There have been series of directives that we have been able to quash. There was a time the FIRS wanted to collect money on stakes. We had to go all the way to the National Assembly to let them know, it isn’t possible. You want to collect money on a stake people are not even sure if they will win or not? It is against best practices. It can’t work because how do you levy tax on money that the person is most likely going to lose? We hired consultants; tax and legal to push that position. At the end of the day, that directive was suspended . Recently, there have been legislations they attempted to push to bring about cumbersome tax and the association had to explain that these things can’t work. The association has been able to push forward those positions. Some we have won. Others are still ongoing process. Others were not a win for us. The important thing is that at no point should our members feel that we are not committed to their cause. That is our goal and to achieve a standardized gaming industry, where all of them can compete fairly.
Is it a concern to you that operators may have lost money because Nigeria is not at the World Cup? Have you ever placed a bet?
It is disappointing, to say the least. I almost can’t bring myself to watch it. It definitely has been a loss of revenue to operators. I am certain that if Nigeria was participating in the World Cup, the buzz would be everywhere, with everybody talking about it; everybody wishing and hoping that Nigeria will win their matches. There would have been a number of bets placed on Nigeria doing well in their games. I am sure.
Yes. I have placed a bet, not because I want to win but I want to have an idea of how it works, to understand the processes from the side of the players.
QUOTE
Our main question to the court was does what the federal and states do amount to double taxation? If the court answers in the affirmative, then is double taxation constitutional? The court answered in the affirmative that taxation of the industry as it is today amounts to double taxation; and that double taxation is unconstitutional
