Bashir Are: Sanwo-Olu Approved N250m to Develop Software for Gaming

Bashir Abiola Are, reported for duty on October 19, 2019, as Chief Executive Officer of the Lagos State Lotteries and Gaming Authority to regulate gaming. In this interview, he discusses the gaming industry with the GAMING WEEK team

On the enduring between the Federal Government and the states over who has jurisdiction to regulate the gaming industry

Whatever we do, we have to go to the foundation of the Constitution of the Federal Republic of Nigeria. If the constitution is not followed, then we have a problem. The constitution says the House of Assembly of a state shall have the power to make laws for the peace, order and good governance of the state and in part thereof with respect to the following matters, that is to say, any matter not included in the Exclusive List or the Concurrent List. That is the 1999 Constitution as amended.

Again in 2008, there was a landmark judgement by the Federal Court of Appeal that settled this matter. Any other thing besides it is a circumvention of the constitution. In that case, the Federal Court of Appeal held that Pools Betting and. Casino do not appear in either Part 1 Exclusive List or Part 2 Concurrent List of the Second Schedule of the 1999 Constitution as such not being an item in the Exclusive List or on the Concurrent List and not matters incidental or supplementary to any of the parts in the Exclusive Legislative List or even in the Concurrent List, Pools Betting and Casino are residual matters and all residual matters lie within the purview of the state houses of assembly.

Under no circumstances without prejudice should the National Assembly deliberate or enact a law to regulate that concerns gaming, lottery or casino because it is not part of what is stated in the constitution. With this remote gaming or online gaming, it doesn’t remove the fact that the powers to do such reside in the respective houses of assembly.

We have to sit down, meet each other again and then state the law and how each of us will follow the law. Aside from that, as individuals and as public officers, we can also arrange a sort of Memorandum of Understanding within the confines of the constitution to collaborate and work together to grow the industry. 

The FG, through the NLRC, still insists operators must come to it for approval before they set up shop.

It is part of what I call an abuse of the constitution because you can’t give what is not yours. You cannot give out a property of asset that is not yours. Even of they have to do that they still need the permission of the state houses of assembly or the gaming agency from each state. They still need permission to do it on our behalf. They do not have such power under the constitution as of today. I don’t know about tomorrow , the constitution may be amended to allow the Federal Government to do that, but as it is today, they do not have such powers.

The NLRC is not even the FG agency that screens operators in the gaming industry

Don’t let us lump unrelated matters together. EFCC has its mandate. The National Communication Commission has its mandate. The Central Bank of Nigeria has its mandate . I will give you a perfect example. Any business, regardless wether it is gaming or anything uses internet. There are Internet Service Providers that give us these service and each business or entity subscribes to an Internet Service Provider, the fact remains that each ISP has already obtained its licence from the NCC. If they have obtained their licence from NCC to do whatever business, why should another agency lump another thing on top of it? If you are a gaming operator, you have already got a licence from gaming regulatory authorities and you pay for internet service and the ISP has already got a licence from the NCC, what has that got to do with regulation of gaming again? We need to do things methodically. 

That is why Lagos State is working. We always move forward. There is a section of the constitution that says that anything that is outside the constitution to the extent of its inconsistency is null and void ! You cannot circumvent the constitution unless you don’t believe in it. If you go outside the constitution, you are bringing anarchy.

The way this matter of jurisdiction is going, it is going to be decided by the Supreme Court, eventually.

We are at the Supreme Court already. It was adjourned in October 21, 2021. The matter before the Supreme Court is to settle the jurisdiction of gaming, whether the National Lotteries Regulatory Commission (NLRC) has the powers to regulate gaming in Nigeria is at the Supreme Court. We challenge that Act. Most of the states of the federation are party to that matter-16 states have joined the case, including Lagos State and that is Versus the National Assembly and the Attorney General of the Federation.

The NLRC has gone further to propose the issuance of offshore licences to overseas operators that may not have a physical presence in Nigeria

Right now, the lottery association and the bookmakers association and the state gaming regulators and the NLRC are meeting to deliberate on these matters, but the fact remains that the position of the operators as of today is that they are against it. The state gaming regulators are also against it because we believe it is under out our purview constitutionally and you cannot issue remote gaming licences to foreign operators without our consent ; even if you have to do it, you to do it on our behalf. We have to give you permission to do it. As it is, they don’t have such permission. Realistically speaking it is disadvantageous to the states and to the operators.

We have some operators that have invested like some fantastic amounts of money and structured company. They have invested heavily for something like 25 years in the sector. There is a lot of growth in the sector. Now, you want to provide foundation for people who have not invested in the country. That is what the offshore licence is going to do. Do you want the people who have been investing in the country to pack their bags and go? Or do you want them to also change their operations to remote licence? When you do that I can tell you for sure, that at least, there are 150,000 people in employment in the gaming sector in Nigeria, what do you think will happen to them; in terms of employment and investment? You are telling them they don’t have to invest locally; that they can just pay some peanut and make huge amounts of money. There will be capital flight, but no development. All these companies that you want to grant offshore licences to are not based in Nigeria. What we need is a lot of local content so that we can grow the sector within and we can export. Our people are capable when you give them the platform.

In Lagos State alone, Mr Governor authorised N250 million from our Good Cause account to be paid into the Lagos State Science and Innovation Research Council to develop software locally. It is a form of grant to our people. We just signed an MoU with an organization in France to develop e-sports in Lagos. Such grants are being used to develop our people locally. If you are telling them they can work remotely of what advantage is it to our people , to our country?

It is been in Europe because the European Union had a special agreement, so when you get a licence in Malta you can use it in certain countries. That is what we are doing as state gaming regulators. It is in the pipeline. We are giving it to one of the best consulting firms in the world to develop a framework among the states; how we can set the standard, have a uniform licence, and uniform tax regime and we will now see how to share the revenue among ourselves. This is what will be easier for our operations, either local or foreign. The operators have invested huge sums of money. The state gaming regulators are also against offshore licences and the NLRC does not have such powers.

We had an agreement on jurisdiction outside of Nigeria. They are in partnership with us. That we can go after remote operators not licenced by the state regulators. If you look at the involvement of FIRS, it is not within their mandate to collect gaming taxes. It is not within their mandate to issue gaming licences. Why FIRS? Every agency focuses on its mandate strictly to have the desired outcome.

What exactly is the association of state regulators that you lead doing?

They say charity begins at home. We need to put our house in order. In the Association of State Gaming Regulators, we have expended a lot of resources. We have spent money in the past year working on a uniform regime and standard. The moment we have that activated, operators will not have to run Helter and skelter. There will be a platform you can go to apply to one or apply to all. That is what we are targeting for 2023. Also, we are hoping very soon as the Supreme Court declares judgement with regards to our jurisdiction matter. If you read the constitution of Nigeria, you will see that there is no grey area. There are dozens of matters in the last 20 years that the various courts have pronounced that all residual matters lie within the states where they occurred. It’s just in the previous senate, the presidency rejected National Lottery Commission Act 2017, but the Senate did something else overnight. That is why the presidency refused to sign it into law because the matter was pending at the Supreme Court. That is what we are challenging at the Supreme Court.

There’s been a number of judgments, and each party in the matter has won a case. Where does that lead us?

The judgment just came last month, but we have been in court for the past two years. When you are operating in Lagos and you don’t have a licence, it is illegal. The law requires that we give you seven days’ notice for regularise. Being a business-friendly environment and business-friendly government, we even give up to six months to regularise. When we exhaust that method that is when we go to court, there are some matters we took directly to the Lagos High Court because they are operating illegally in Lagos. The timing is just a coincidence.

Isn’t there something in the constitution that the Federal Government is holding on to?

As much as we complain about the 1999 Constitution, you have to give credit to those who wrote it. They are not perfect, and there is no perfect document anywhere; even the American constitution is not perfect. We can continue with the amendment whenever the need arises. Trade and commerce is on the Second Schedule of the Executive Legislative List Part 1. It is item 62. It addresses in particular, trade and commerce between Nigeria and other countries, including the import of commodities into and export of commodities from Nigeria; and trade and commerce between states. Where does gaming come under trade and commerce? This is what the constitution says in black and white. The question is; is gaming a commodity?

There are many cases to prove that the courts have decided that when a matter is residual it is within the purview of the state government and that is why the NLRC is hiding under trade and commerce. They know. The purpose of the trade and commerce law is for commodities and goods. There are other services, too, including registration of the business name. In Lagos, the Land Use Charge constitutionally belongs to the local government. But the local governments came together and formed a partnership with the state government and the state the permission to collect the Land Use Charge on their behalf. The state did not use force to collect the Land Use Charge. The local government gave them the authority to collect on their behalf, ‘be our collection agent.’ You have to follow the rule of law. 

The Ministry of Finance is our parent ministry, but the state house of assembly also oversees us through the Finance Committee and Appropriation Committee and through the Public Accounts Committee.

One of the things the NLRC is saying is that online gaming is within its purview

When you look at our licences, our terms and conditions, our law, it talk about online, offline. Lagos has always been at the forefront. People have different narratives, but as a state from the beginning of time we have always legislated online and retail. The internet is just a highway to convey services. You can bring any product online when you sit down here and order goods from Amazon. You pay tax wherever those goods are going to be delivered. The Nigerian constitution is supreme and its provisions binding on authorities and persons throughout the Federal Republic of Nigeria. The Federal Republic of Nigeria cannot be governed by any person or group of persons or part thereof except through the provisions of the constitution.

As we speak there are still operators who prefer to work with the NLRC

Most of the successful ones come to Lagos. Some of those who go to the NLRC to obtain a licence that allows them to operate in other states of the federation can’t come to Lagos. As far as we are concerned in Lagos, they are illegal operators because they have to conform to the laws of the land. The constitution of Nigeria gave the Lagos State House of Assembly the power to enact lottery law. We harmonized our law in 2021. There are different laws in Lagos State. There is one for casino. There is one for Pools Betting. We will harmonize everything under one umbrella. The purpose is not for online. The purpose is the harmonize all the laws to make it easier. We are approaching Ease-of-Doing-Business for operators or whoever needs to know anything about gaming and lottery. They can just get the document and have all that is needed. That is the purpose. 

Does this struggle for jurisdiction allow you to look into other areas of your mandate?

There are two things that are very important to the agency. One is Responsible Gambling. The other one is Good Cause. We set aside some monies to correct vices in the state as a sort of intervention. When it comes to responsible gambling, there is a billboard that we do and a lot of advocacy. Each year, we evaluate our campaign and advocacy. We review the outcome. The reason you are not seeing a billboard in recent times is because we have targeted the problem, which is underage gambling. We have a non-profit organization that we sponsor that goes to the target group directly to deliver some programmers about underage gambling and gambling addiction, especially in secondary schools. Number Two, if you take BRT buses, there is free WiFi. When you connect to this free WiFi before you can be allowed to use the internet, our advocacy will come up. There is a video, and you have to watch that video before you can use the WiFi, talking about underage gambling and gambling addiction. We did it for six months and we saw the impact. Some young people take buses with their parents. Students ride on these buses so we targeted areas where the messages will go directly to them. In the next few weeks, we are signing a one-year contract on those BRT buses so that they can see the messages very well and feel them. Everybody uses social media now. They use the internet. Because it is free it is a way for us to target them directly. As part of our good causes, we intervened in the management of emergencies in the state, especially as regards fire emanating from burst pipelines, so we bought specialised fire trucks and donated them to the Lagos State Fire Service. In the same vein, we had a meeting with the Lagos State Fire Service and we compared the population of Lagos with the population of Ghana, and we saw a lot of deficiencies. In the last 24 months, the Lagos State Lotteries and Gaming Authority has sponsored and built and equipped fire stations in the state at Ajegunle and Oniru. In the area of education, across the state, we have constructed and renovated eight schools. We have helped five Lagos residents pay for a kidney transplant because the cost is enormous. In terms of alcohol addiction, we also sponsor some non-profit organisation to carry our advocacy. For children with disability, we have sponsored their institutions to have equipment for them. There is a guy in Canada studying Aviation Management. We sponsored him because those courses are not readily available in Nigeria. Regardless of your tribe or nationality, we serve every resident of Lagos State. If you can prove that you are a resident of Lagos, then we will process your application. You have to understand that the good causes levy that we collect is to correct the vices of alcohol and gambling. If you don’t have a reserve fund for that, it may take a longer time to intervene. That is why our funds must be readily available for intervention at any point in time. If there is a disaster or any unforeseen circumstances we are to intervene almost immediately. That is our purpose

Can you let us into some of the things you are doing about responsible gaming?

We have created a department in this agency dedicated solely to responsible gaming, the aspect of underage gambling. We also have even for adults – gambling addiction, rehabilitation and correction therapy. We are working on an arrangement in partnership with Lagos State University and the University of Lagos to create an institute where we can have gambling addiction treatment and research. Gaming is supposed to be entertainment and leisure. Where it is not regulated, it will collapse. In fact, serious operators do not operate where it is not regulated. For them to make sure that their investment is recoverable because it is a long-term investment so they want to make sure that any environment they want to operate in is regulated. If it is not regulated, they won’t come there. They want to make sure that the environment is sanitized enough for serious or responsible operators to come in. Even globally, there are international gambling addiction centres, so we are partnering with them. We want to plug into all these bodies and laws so that we can be on par with the European Union and North America.

QUOTE

You want to provide the foundation for people who have not invested in the country. That is what the offshore licence is going to do. Do you want the people who have been investing in the country to pack their bags and go? Or do you want them also to change their operations to a remote licence? When you do that I can tell you for sure, that at least, there are 150,000 people in employment in the gaming sector in Nigeria. What do you think will happen to them; in terms of employment and investment? You are telling them they don’t have to invest locally; that they can just pay some peanut and make huge amounts of money. There will be capital flight, but no development