How the Legalisation of iGaming Benefits the Nigerian Economy

Nigeria is the most populated nation in Africa, with a population of over 213 million. It has the biggest gaming market in Africa             because of its enormous populous, but the industry remains uncontrolled despite the legalisation of wagering in some parts [2005].

The absence of efficient federal regulation in Nigeria results in the economy not reaping the benefits of collecting license fees and generating employment opportunities as expected.

Today, we will analyse the legal status of gambling in Nigeria, particularly focusing on the unregulated online casino industry and how a shift towards legalisation would heavily benefit the economy.

A Confusing Legal Landscape

The National Lottery Regulatory Commission (NLRC) is the main regulatory body overseeing the Nigerian gambling sector. The NLRC was founded in 2005 to oversee all lottery and gaming activities in Nigeria.

The main objectives are to advocate for industry transparency, honesty, and fairness. The regulation distinguishes between skill-based games, which are legal, and chance-based games, which are illegal. Lotteries, brick-and-mortar casinos, and sports betting are forms of legal gambling, but roulette, dice games, and card games that do not need skill are not permitted.

The law does not include specific regulations for internet gambling, and the legal age for gambling in Nigeria is 18 years.

Missed Profits

You can estimate the amount of money involved by examining Nigeria’s regulated sports betting industry.

In 2019, Research and Markets estimated the total value of the sports sector in the nation to be around $2 billion. The “Finance Bill” seeking presidential approval modifies section 15 of the Companies Income Tax Act (CITA). This amendment involves taxing lottery and gaming enterprises and clarifying the industry’s tax status.

If this amendment is enacted and internet casinos are regulated, they may be taxed, generating substantial revenues for the government.

The Benefits of iGaming Legalisation in Nigeria

Nigeria’s Federal and State governments may increase income by using efficient techniques and taking advantage of possibilities in the gaming business. The government might require operators wanting to provide gaming and gambling services in a certain area to pay licensing fees.

The fee-sharing arrangement can be mutually determined by regulators at a fair rate to effectively boost revenue without the inconvenience of multiple permits, as seen between the National Lottery Regulatory Commission and certain state government gaming regulatory authorities recently.

Taxation

Taxing casino operators is a common way to generate income. State governments have the authority to impose taxes on many components of gaming activities, including total gaming income, wins, and particular game types. Maintaining a balance between income generation and preserving the industry’s appeal to operators is crucial.

State governments have the authority to levy regulatory fees on gaming operators to fund the expenses related to regulating and supervising the business. The levies may be determined according to the scale and extent of the activity. They may be gathered at regular intervals to assist in continuous regulatory tasks. Collaborations between state and federal gaming agencies may occur without hindrance from the Joint Tax Board and the Federal Inland Revenue Service.

Partnerships

A reform in the legal framework could see the Nigerian government have the authority to form agreements with licensed gambling firms. These partnerships may include revenue-sharing contracts in which a portion of the operator’s income is assigned to the state government. This strategy enables the government to profit directly from the success of the gaming business while also drawing domestic and international visitors to a state.

Officials may enhance tourism earnings by creating gambling and entertainment facilities tailored to visitors. Investing in infrastructure and expert insights into diverse casino sites, hospitality, and marketing may establish a state as a prominent gaming and tourist hub.

Tackling Responsible Gaming

Regulators have the authority to impose fees on gaming operators explicitly allocated for responsible gambling programs, particularly at the state level. This money may be used to raise awareness about problem gambling, support treatment programs, finance research and education on responsible gambling practices, and fund the typical charitable contributions controlled by the National Lottery Trust Fund at the federal level. It creates income and demonstrates a dedication to consumer protection and social progress.

Online Betting Is Already Huge for Nigeria’s GDP

Online wagering contributes significantly to Nigeria’s economy. It considerably enhances the national GDP, and projections validate this expansion. The following are the essential factors to contemplate:

Recent studies predict that the online wagering industry will generate $641.20 million by 2024, which will have a significant economic impact.

As a result, employment opportunities have increased in this industry. A multitude of Nigerian citizens secure stable employment as these platforms proliferate. Employment opportunity expansion accompanies the broader economic recovery.

Significant tax revenue is an additional benefit. The substantial financing stratum augments government resources, facilitating enhancements to national infrastructure and various sectors. Approximations indicate that the wagering industry will generate an average revenue per user (ARPU) of $342.40 by 2024.

Additionally, this endeavour expands market participation. As per projections, the number of users is anticipated to surpass 2.5 million by 2028, which is a compelling indication of the widespread involvement of society in the online wagering industry.

Such a large user base signifies enhanced market engagement and improved economic connections. Increased participation positively correlates with the country’s gross domestic product (GDP).

If such impressive numbers and economic growth have been achieved via online wagering, it’s apparent that a complete legalisation of iGaming in Nigeria would further boost the economy to new heights.

Final Thoughts

The Nigerian gambling industry is growing quickly due to technological advancements and increasing demand. New rules and regulations may be established or modified to address new challenges and technological advancements.

Business owners, stakeholders, and consumers must keep up-to-date with industry laws and regulations to ensure long-term sustainability and consumer safety. Implementing stringent standards that balance sector growth and consumer protection is essential. Important challenges that need to be addressed include enhancing enforcement protocols, combating the proliferation of unlicensed operators, and promoting safe gaming conduct.

In conclusion, the Nigerian betting industry can become a prominent example of Africa’s successful and well-managed gaming economy via proactive and collaborative approaches