Big Money or Big Illusion?: The Tough Business of Running a Gaming Operation in Nigeria

People see the numbers—millions of punters placing bets, billions circulating through gaming platforms—and assume the industry is thriving. Regulators see the same figures and clamp down with taxes and tighter controls. But behind the flashy numbers, how much of this money actually stays in the hands of operators? Managing Partner at WYS Solicitors Olafadeke Akeju, a legal advisor with deep experience in Nigeria’s gaming regulatory sector, breaks down the financial realities operators face and the challenges threatening the industry’s survival in a conversation with Nseobong Okon-Ekong and Iyke Bede

As already established, sports betting and casinos have seen tremendous growth and acceptance among Nigerians. With over 50 per cent of adults having placed a bet at least once, the industry presents a picture of high-volume transactions powered by a teeming youth population and technology—what some argue is the key attraction for investors in Nigeria.

However, others, like Akeju, maintain that profit margins are thin, with only a few operators achieving double-digit returns.

“Very few operators are actually profitable in the real sense of the word. But because, you know, a business that money comes in every day—every day—is passing through the system, there’s always money in the account. But are you profitable at the end of the day? That’s the question,” she says.

Akeju’s perspective comes from years of navigating the space between regulators and operators, helping set up gaming businesses in Nigeria through WYS Solicitors. While the sector is regulated, she notes a critical gap—there are no structured systems guiding potential investors, leaving many to make costly miscalculations. Another major challenge is the industry’s high operational costs.

“The reason why you find a large turnover of businesses in the industry is because most people come in, thinking it’s a money-spinner, without understanding the business side of gaming,” says Akeju. “They see transactions moving through bank accounts, but they don’t see the operational costs, regulatory fees, and compliance costs.”

On the regulatory side, the framework presents a double-edged sword—operators face mounting taxes, including the recent proposal of a withholding tax on winnings.

However, a recent landmark Supreme Court ruling resolved a protracted 16-year battle between national and state regulators over taxation, ultimately granting jurisdiction to the states. While this decision clarifies taxation for operators, state-level regulations are expected to close ranks and present a unified structure. This may be one of the strong advantages of the umbrella body of state regulators- the Federation of State Gaming Regulators of Nigeria. 

With these new developments, Akeju believes the industry is now entering a more structured regulatory era, offering operators clarity while still presenting new challenges.

“The industry is at a point where, now that we have settled that regulatory matter, each state now needs to decide how it wants the lottery to be run within its ecosystem. Then you have the issue of those who are online,” Akeju explains. “I can get a licence from Lagos and still take your bets in Ebonyi, in Cross River, in Delta, wherever, in Sokoto, and all of that. That’s what I mean by we are at the era of regulation.”

For operators to stay in business, Akeju maintains that compliance is non-negotiable. She warns that the cost of flouting regulations far exceeds that of following proper channels. Some operators choose to sidestep compliance, but in many cases, those who face penalties don’t even realise they have broken the rules.

And while gaming platforms experience a huge influx of cash, Akeju advises stakeholders to carefully track where these funds are going before assuming profitability. She highlights a critical financial drain—foreign exchange (FX) dependency on technology services.

“There’s money in gaming. If they look at the bank accounts, it confirms because money is dropping every second. People are crediting their account,” she points out. “But then, it is also going out. You’re also paying for technology. We don’t have the technology locally.”

This FX dependency has sparked new efforts to localise sportsbook providers, with a few companies now offering services in naira instead of dollars or euros—a shift that could ease cost pressures.

“Most operators pay in USD or in euros. Now you have a few, about two or three, who are saying, I’ll take naira, and I’ll provide the same service. I will go, will pay, I will sort it out. But you pay me in naira. That makes it better for more and more people to come into the business,” Akeju notes. “Because the reason why you find a large, for lack of a better word, turnover of businesses in the industry is because most people come in—the fluctuation in exchange rates impacts their business.”

The gaming industry in Nigeria is a paradox—visibly cash-rich yet financially precarious. While billions flow through betting platforms daily, only a handful of operators truly turn a profit. The illusion of easy money continues to draw new entrants, many of whom underestimate the operational and regulatory costs that quickly erode their margins.

As Akeju highlights, compliance is no longer optional but a necessity for sustainability. The Supreme Court ruling may have brought clarity to taxation, but state-level inconsistencies and foreign exchange dependencies remain significant hurdles. However, the emergence of local sportsbook providers, like the Austin Udu-led Sportsbook Engine, accepting Naira signals a potential shift toward reducing FX exposure and strengthening industry resilience.

Ultimately, success in Nigeria’s gaming sector requires more than just deep pockets—it demands strategic foresight, regulatory adaptability, and an understanding of the real costs behind high transaction volumes. For those who can navigate these complexities, the rewards may be substantial. But for many, the promise of big money remains just that—an illusion.