Assessing the Broader Socioeconomic Impact of Sports Betting in Nigeria

Iyke Bede writes that Nigeria needs to continue to embrace sports betting as a form of entertainment, striking a balance that maximises its positive contributions while addressing the challenges that arise as a result

Undoubtedly, sports betting in Nigeria has rapidly emerged as one of the most dynamic sectors significantly contributing to the nation’s economy. This surge in growth is projected to potentially generate between 1.5 to 3 per cent of the country’s gross domestic product (GDP), as highlighted by the National Sports Industry Policy in 2020.

This seeming growth has also highlighted certain grey areas around the laws guiding tax collection in the sector, as can be evidenced in the ongoing jurisdictions war between federal regulatory body- the National Lottery Regulatory Commission (NLRC) and their various state counterparts across the country to determine rightful tax revenue collection channels. 

As of 2020, it was estimated that the sports betting subsector of the gaming ecosystem was worth $2 billion, a figure driven by 60 million Nigerian youths between the ages of 18 and 40, with a daily transaction of $5.5 million. While a good number of those transactions occurred in walk-in shops (estimated at 64 per cent), online transactions at the time represented 34 per cent. Total figures are projected to see a bump with internet penetration rising to 40.72 per cent in 2023 (up from 34.55 per cent in 2020), increased adoption of cashless policies, and the availability of user-friendly mobile apps to place bets.  

Despite the influx of numerous local and international operators, most of them depart after a brief period, driven by various factors. One such reason, as noted by Oyindamola Michaels, the country manager of Parimatch International, is investors’ impatience.

“Most investors springing up and opening are doing so for the wrong reasons. They are not really coming to invest. They are coming to make profits, which is good. But if you do it for the right reasons, you should be able to expand across.” 

However, a few operators have maintained their presence by securing most of the market share. Bet9ja, for instance, records a daily transaction of $400,000. According to the ORBIT Nigeria Smartphone Report this year, the operator also boasts as the third most used app. It records that the SportyBet app has the highest number of online users, followed by BetKing, with 1xBet in fourth place. However, These apps do not represent their huge physical presence across the country. 

Speaking with an industry stakeholder, Yahaya Maikori, a seasoned entertainment lawyer interested in the sports and gaming sector, implied that the spike in revenue generation could also be attributed to the low entry-level required to place a wager. 

“I am sure that there are companies that are doing N1 billion turnover a day, conveniently in 2023. You have to understand that the entry point is very low now. I can bet with N100,” Maikori noted. “The population is about 200 million people. On every street corner you go to, there is a betting company there—low entry level. So, everybody can practically participate in it. So, it’s not unusual; those figures are… I am not confirming, but those figures are easy.”

Cumulatively, the sports betting sector realises $4.7 billion annually in revenue and creates about 10 million jobs; directly through customer service, marketing, and data analysis roles, as well as indirect jobs in the informal sectors providing services for them. Through the various tax levies of existing operators and licence fees accrued from the growing number of licensees, the sector generates revenue for government expenditures, hence its economic importance.  

By ensuring a low entry level, more people can allocate some disposable income for a chance to win big. However, this accessibility raises concerns about its potential impact on spending patterns and other sectors of the economy, as well as the financial literacy of the population, which may lead to gambling addictions. With wager choice influenced by an individual’s skills, knowledge, and luck, potential financial losses lurk — a gateway to gambling addiction to recover losses. 

In tackling gambling addiction, several initiatives like Gamble Alert and Crucial Compliance have been established to mitigate the metastasis of the scourge on online platforms. But with profitability in mind, especially for the less established operators, they bend the rules by allowing underage, vulnerable players with little financial agency to place wagers at their physical store, with some seemingly targeting that age group without fear of facing the consequences. This bold move on their part is influenced by the failure of regulators to hold them accountable.  

Stakeholders also complain about the misplaced priorities of regulators in the space, saying regulators place more emphasis on tax revenue collection than coming up with innovative ways to propel the industry forward and generate more revenue, which, in turn, would benefit host communities through the good cause initiatives, a socioeconomic tool to raise awareness and funds for a specific charitable purpose. This is a position held by Bimpe Akingba, Executive Secretary of the umbrella body of sports betting companies known as the Association of Nigeria Bookmakers (ANB).

In contemporary times when sports betting and sports culture in Nigeria has led to increased fan engagement, it presents a unique problem of questioning the integrity of sports events and potential match-fixing issues that have become a growing concern in international sporting events. Additionally, fandom wars also rears its ugly head now and then when aggrieved fandoms sense injustice.  

Aside from the revenue generated from the sector, some argue that the public’s perception of the industry would be more favourable, provided every unit of the sector plays its part in fair regulation policies and compliance with such regulations, ultimately fostering trust and transparency within and without the community, as could be seen in the recent multilateral agreement between clubs, betting operators and regulators to withdraw gaming sponsorship on the front of matchday shirts for the 2026/2027 Premier League. 

“There are some cultural practices and beliefs that are hindering the growth of this sector, generally. It is both cultural and religious,” said Yomi Oketope, the managing director of Sax Innovative Network Limited.

“When people see you gambling, they see you as irresponsible. The church will say, ‘Look, gambling is bad’.”  

He added, “So, there’s a negative perception of gambling, whereas gambling is a lifestyle. There is no way you want to earn income from tourism that you will not include the gaming sector. Because when the tourists come in, they are looking for the nearest casino because they are used to it. For them, it’s a lifestyle. It’s entertainment. It’s part of hospitality.”

By and large, assessing the broader socioeconomic impact of sports betting in Nigeria is crucial to comprehend the far-reaching impact of this rapidly growing industry. As Nigeria continues to embrace sports betting as a form of entertainment, striking a balance that maximises its positive contributions while addressing the challenges that arise becomes paramount. Nigeria can harness the full potential benefits by adopting evidence-based policies and fostering responsible gambling practices while safeguarding its socio-economic fabric.

QUOTE

Cumulatively, the sports betting sector realises $4.7 billion annually in revenue and creates about 10 million jobs; directly through customer service, marketing, and data analysis roles, as well as indirect jobs in the informal sectors providing services for them. Through the various tax levies of existing operators and licence fees accrued from the growing number of licensees, the sector generates revenue for government expenditures, hence its economic importance.