From tossing coins to dicing and card games, gambling has a long history in Nigeria. What began as a form of entertainment has now evolved into fraudulent schemes that usually lead to financial losses for individuals.
In today’s digital age, easy accessibility to computers and smartphones has contributed to an increase in gambling addiction among Nigerians, especially the youth. This habit has caused hundreds of students to drop out of school in pursuit of betting as a career.
A 2022 survey conducted by the African Gaming Market Report ranked Nigeria second in Africa. It was revealed that approximately 78% of Nigerian youth participate in gambling, including online sports betting.
OLAITAN GANIU outlines five red flags to identify deceitful Ponzi schemes and gambling platforms.
1. Unrealistic promises of ROI
One of the major red flags of Ponzi schemes is that they usually promise high returns on investment (ROI) within a short period to lure innocent individuals. The recently exposed CBEX offered returns of up to 100 percent within just 30 days. This promise was 70 percent higher than what the Mavrodi Mundial Movement (MMM) offered in Nigeria before it collapsed nearly a decade ago.
So, be cautious of any business that promise you a quick returns of your investments.
2. High pressure to invest
Whether it is forex trading, cryptocurrency, pyramid schemes or sports betting platforms, their mode of operations is similar. They boost your adrenaline by pressuring you to stake your money for a chance at a big jackpot. Once invested, you hold on to the hope of experiencing a winning streak.
A close friend of mine once borrowed money from a loan app to invest in a pyramid scheme. After millions of investment, he was promoted to the top level in the multi-level marketing firm. Excited about the promotion, he quit his job as a banker to join the marketing team. Unfortunately, he ended up losing everything as the pyramid orgranisation defrauded him and left the country.
Always stay healthy as gambling can lead to mental illness, suicide and other serious harms.
3. No tangible product or services rendered
Real investments give you tangible assets while gambling offers you nothing of valueable. Although both come with risks, but it is essential to understand their differences and weigh the level of the risk.
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Be cautious of any business that promise you nothing (goods and services) in returns of your money. Don’t fall for their aggressive social media campaigns and testimonials, most are fake. My one cent, there is no substitute for hard work. Focus on learning a skill, maintaining consistency, and investing in your knowledge. Remember, there are no shortcuts to financial freedom.
4. Targeting low-income or desperate individuals
Ponzi schemes and betting platforms are rapidly increasing in Nigeria. Why? Because gambling activity thrives in low- and middle-income countries.
Millions of people are falling into these traps believing these schemes will elevate them out of poverty.
Some notable Ponzi schemes and betting apps that have been launched in Nigeria over the years include MMM, CBEX, Ultimate Cycler, Twinkas, Giver Forum, Loom Nigeria, Pennywise Wealth Management, MBA Forest, Chinmark Group, Baraza Multipurpose Cooperative Society, Racksterli, 86FB/86Z, Bet9ja, SportyBet, NairaBet, 1xBet, BetKing, BetWay, MerryBet among others.
It’s important to invest wisely or stay away from unregulated gambling products.
5. Lack of legal protection
A lot of gambling providers often claim to be affiliated with international companies as a way to avoid registrations with local financial authorities. In Nigeria, any lottery company that is not registered with the National Lottery Regulatory Commission and its agencies is operating illegally. Investors and gamblers should always investigate these gaming companies for regulatory compliance before staking their money.
The government also needs to protect consumers from unregulated practices. They should be more aggressive with their sanctions and warn citizens about the potential harms associated with gambling products.