Tech, Jurisdiction in Focus at Second NLRC’s International Gaming Conference

Speakers at the 2023 National Lottery Regulatory Commission International Gaming Conference examine prevailing trends shaping the sports betting sector, writes Ikenna Bede

The COVID-19 pandemic had a profound impact on various sectors worldwide. In Nigeria, the sports betting sector was no exception. Subsequently, there was an adoption of technology-driven innovation to meet post-pandemic consumer demands. This adaptation for survival resulted in impressive growth, leading to an increased number of gaming operators and an estimated 60 million punters in 2020.

A seismic transition from traditional physical betting to online platforms not only upheld the industry but also ignited remarkable growth. Nonetheless, this shift has inadvertently paved the way for illegal gaming operations, intensified issues with underage betting and gambling addiction, generated friction in tax revenue collection between state and national regulatory bodies, and raised significant concerns about cybersecurity, all of which have hindered the industry’s advancement.

Last year, the World Lottery Association reported an estimated $1.8 trillion loss to illegal lottery operations globally. In 2019, the Director-General of the National Lottery Regulatory Commission (NLRC), Lanre Gbajabiamila, disclosed that Nigeria lost billions of naira to the same practices, with a substantial amount going to “good causes.” These issues and many more birthed by tech advancement informed this year’s theme of the NLRC biennial International Gaming Conference (IGC).  

Staged this year at the Convention Centre of the Eko Hotel and Suites, Victoria Island, Lagos across two days between October 31 and November 1, under the theme ‘Innovation and Disruption: Core Strategies for Success,’ the convener examined prevailing trends shaping the sports betting sector. Chief Executive Officer of the National Lottery Trust Fund, Dr. Bello Maigari, in his goodwill message, underscored the pivotal role of technology in advancing Nigeria’s lottery and gaming industry. He emphasised that by embracing technology platforms that offer transparent data analytics through international collaborations, the government could enhance tax revenue generation from this sector, potentially reaching levels comparable to Germany’s 90 per cent tax contribution. He believes this to be the springboard with which to strengthen the existing efforts of the commission.

“Nigeria, which is not only distinguished by its size but also by its cultural and social complexities, presents a challenging regulatory environment. Adding to this is the overarching regulatory framework where each state in the country can control gaming and betting activities inside its borders. This presents a challenging scenario for the NLRC,” Maigari stated, emphasising the importance of acknowledging the sector’s transformative potential to outgrow these regulatory challenges and pave the way for sustainable growth and innovation in the industry.

Expanding on the role that technology has played in the sector’s growth, Gbajabiamila pointed out the dichotomy that exists between the national and state regulatory bodies. He urged both entities to strive for uniformity in tax revenue collection.

“Technology has fundamentally reshaped how we perceive and engage in the gaming industry. This transformation has brought challenges and opportunities, making it increasingly complex for any state to assert complete regulatory control, especially in light of the growing prevalence of online and remote gaming operators,” Gbajabiamila explained.

He added, “We are at the pivotal juncture, standing at the crossroads of traditional gaming and the rapid evolution of the digital realm. The task of regulating remote gaming has become more intricate than ever before. This digital era has a higher appeal than the traditional instrument employed in the gaming industry, demanding a comprehensive re-evaluation of the regulatory framework and strategies. Amid this transformation, the commitment to address these emerging challenges remains unwavering.

“In light of this, regulatory bodies and stakeholders must adapt to this new landscape to ensure the continued integrity and security of the gaming industry. This adaptability is essential to maintaining public trust and fostering an environment where participants can enjoy gaming without concerns about fraud, money laundering or illicit activity. Uniformity is key for success and growth.”

Despite the upward trajectory of the sports gaming industry, it continues to face disapproval in Nigeria and across Africa due to deeply rooted sociocultural and religious belief systems. In discussing the impact of education in enlightening the public about the sector’s revenue-generation potential, Permanent Secretary of the Ministry of Special Duties and Intergovernmental Affairs Patricia Ibiene highlighted this issue. She urged stakeholders to prioritise information dissemination to urban and rural areas. 

Another aspect Ibiene spotlighted was the role of “good causes.” According to a 2022 report of the WLA, $92 billion in lottery proceeds were channelled to social initiatives. Ibiene believes that increased activity in the sector will bring about increased revenue generation that directly converts to proceeds for “good causes.”

Acknowledging the strides of the NLRC, National Lottery Authority (NLA), Deputy Director-General Anna Miezah, who represented the NLA Ghana boss, Sam Awuku, gave an overview of the gaming landscape in Ghana, disclosing how a “good cause” initiative was set up to provide education, health, youth and sports development, and promote arts and culture in vulnerable communities. 

“Touching more than 350,000 lives, we started this in 2021, and so far, this is how much we have done. The NLA invests in these projects to fulfil a statutory obligation, which is to give back to communities we operate,” Miezah noted. 

With a CAGR of 6.99 per cent, the gaming industry is expected to reach $5.6 billion in 2030, up from $3 billion in 2021, highlighting the promising opportunities ahead despite persistent challenges. The IGC, hosted by the NLRC, serves as a platform for stakeholders to engage, collaborate, and share insights, solidifying the Nigerian sports betting sector’s position as a leader in sub-Saharan Africa with a global perspective to match its international counterparts. This aligns with the sentiments of the Minister of Special Duties, Zephaniah Bitrus Jisalo, who sees IGC as a platform for establishing shared value systems and reaching amicable resolutions.