The global online gaming industry reached a value of over $196 billion last year. The sub-Saharan African gaming industry is expected to generate over $1 billion for the first time in 2024, according to data from research firm Newzoo with CNBC. A potentially lucrative gaming market has opened up in Nigeria and other parts of Africa. This has drawn the attention of the National Lottery Regulatory Commission, and other stakeholders who see its contribution to job creation, revenue generation and GDP growth. The advocacy now is for responsible gaming, DANIEL ESSIET reports.
The global gaming industry keeps growing year after year, generating bigger revenues, engaging more and more people, adapting to technological changes, and attracting more actors to the ecosystem. According to Statista, the video games market’s revenue is projected to reach $385 billion this year.
To take advantage of opportunities within the sector, last year, Sony acquired Montreal-based Haven Entertainment Studios Inc. known for its team of world-class game developers and well-loved gaming franchises worldwide to enable it to hold a leadership position in the global gaming market .Globally, the gaming industry now offers most of the top earning IT positions, from writers to game designers, animators to programmers, engineers to testers, UI & UX designers, and even analysts and marketing and sales professionals, there’s something for everyone in gaming.
Indeed, the Online gaming is a sector to watch in Nigeria. According to Newzoo, a research firm, Nigeria led the way in total annual gaming revenue, attracting $249 million, followed by South Africa, which generated $236 million in revenue. With a rise in the adoption of smartphones, internet connectivity, and digital transformation, it has metamorphosed into a lucrative industry with a definite impact on the domestic and international economy. In the last five years, Nigeria witnessed a much higher appeal towards online games. This is because of its enormous untapped potential, and harnessing this can yield greater economic benefits.
Minister 0f Special Duties and Inter-Governmental Affairs, Rt. Hon. Zaphaniah Bitrus Jisalo at the opening ceremony of the International Gaming Conference 2023, hosted by the National Lottery Regulatory Commission(NLRC) with the theme, ‘Innovation and Disruption: Core Strategies for Success’ held in Lagos said the event was organised to regulatory concerns and other factors affecting the sector. He reiterated that NLRC is responsible for lottery and online gaming.
His words: “As we may all recall, the National Lottery Regulatory Commission was created by the National Lottery Act 2005 (As Amended). An Act of the National Assembly to enable the Federal Government of Nigeria to properly organize and coordinate the operations of the lottery business in Nigeria that was hitherto an all-comers affair.
Since then, the Commission has been on a steady growth path.”
On the issue of the dichotomy of regulators, he observed: “.The Federal Ministry of Special Duties is aware that the principal cause of friction between the federal and state regulators is revenue. However, we believe that all concerned can find mutual common ground for the good of stakeholders to enhance peace, harmony and progress. Therefore, the ministry suggests a ‘Shared-Value’ engagement to reach an amicable resolution of issues in the gaming sector rather than the ‘Jurisdictional Protection’ approach as the case is now.”
The Director General of the National Lottery Regulatory Commission, Lanre Gbajabiamila, has seen online gaming emerging as a mainstream source of entertainment for young and old people. The sector’s growth has risen with the increase in smartphone usage and internet penetration. His concern is that the industry is facing the lack of awareness and understanding among policymakers and the general public about the industry’s potential. This is because many people still view online gaming as a frivolous activity, without recognizing its potential as an industry that can create jobs and contribute to economic growth while also being one of the most engaging means of entertainment. This was one of the focus areas of the just concluded international gaming conference which was held in Lagos. He sees mobile games becoming more mainstream, with more and more people of all ages and backgrounds playing games on their phones.
Gbajabiamila noted that the government was working on a central monitoring system(CMS) project , for the country’s gaming industry for better performance and enhanced revenue generation.
According to him, the industry needed a reliable national database that provides invaluable insights into the actual gaming population across the country.
Gbajabiamila emphasized the urgency of addressing the issues of money laundering, terrorism financing, and syndicate gaming, all of which are threatening to undermine the potential of the gaming industry in Africa.
According to him, the gaming industry has demonstrated its capacity to drive economic growth, generate employment, attract foreign investments, and promote tourism.
He explained that the growth of the gaming industry comes with risks, such as, money laundering which allows criminals to hide their illegally obtained funds by disguising them as legitimate winnings from gambling activities. He also posited that the industry carries the risk of being exploited for money laundering and financing terrorist activities which necessitates the implementation of stringent regulations to combat money laundering while fostering innovation in the gaming sector.
Gbajabiamila called for collaboration in implementing “Know Your Customer” (KYC) procedures, ensuring the reporting of suspicious transactions, conducting regular audits, and promoting information sharing among regulatory bodies.
Despite rising concerns over gambling addiction, cities such as Lagos and Abuja have generated huge profits from regulations and rates of taxation on gaming profits as the Nigerian market in size has become extraordinarily lucrative for all the investors.
Chief Executive Officer, the National Lottery Trust Fund, Dr Bello Maigari ,noted that the gaming sector in Nigeria is experiencing strong growth, ,adding that there’s a tremendous appetite for not just investing in the sector but also for investors to start enterprises .
He stressed the need to closely monitor the market dynamics and remain informed about the gaming industry’s current state.
He highlighted growth projections, stating that the demand for content, games, and immersive experiences is rising rapidly.
The Executive Secretary of the National Lottery Trust Fund, Dr Bello Maigari, said with a population of over 200 million people and the largest betting market in Africa, Nigeria was making giant strides in the world of online sports betting.
According to Maigari, the revenue from the online market alone is projected to reach over 256 million dollars this year.
“It is expected to experience an annual growth rate of nearly 10 per cent to reach more than 366 million dollars by 2027.
“Currently, there are over 65 million Nigerians actively engaging in gaming activity, spending at least 15 dollars on the average every day.
“This surge in digitalisation and the globalisation of the industry will both bring opportunities and challenges for the economic development of our nation,” he said.
Maigari noted that on one hand, gaming allowed Nigerians to access a wide range of entertainment options and at the same time contribute to job creation and economic growth.
Speaking on it the disadvantages, he said the industry raised concerns about revenue leakage, potential exploitation of citizens, hence the need for effective regulation.
On ways to resolve the challenges, Maigari said adoption of relevant technologies was essential for regulatory bodies to monitor and ensure fairness and integrity of gaming and betting operations.
Maigari explained that the industry also needed Artificial Intelligence to harness, detect and prevent fraudulent industry reports.
For some experts the industry has been overstating the potential benefits. For them while the estimated economic impact is too optimistic, while the negative impact – including gambling addiction – has been understated.
Speaking during the session on responsible gaming, Principal Investigator, Massachusetts Gaming Commission (MGC-SEIGMA), Prof Rachel Volberg called for a consistent standard of responsible gaming measures across the board that will benefit consumers around the country. She reiterated that the industry should adopt a shared responsibility approach to addressing problem gaming. The U.S. gaming industry commits more than $300 million to responsible gaming annually, supporting education, training and rehabilitation programs across the country, according to the American Gaming Association
In the US, she indicated that compulsive gambling disorders have continued to be one of the biggest concerns. One of the biggest problems, according to her, was that people have refused to acknowledge that there’s any potential for addictive gambling behavior among citizens. She expressed concerns that problem gambling was causing devastating impact across the global industry .She urged the government to commence studies about gamblers’ activities to spot problems and offer help.
She said the industry should undertake prevention and education efforts for those at highest risk for gambling problems.
Both the regulators and operators of online gaming operators agree to the suggestion for an industry-led responsible gaming standard. Other provisions were for a shared responsibility approach to addressing problem gaming and a commitment to employee training and continuously monitoring operators’ respective responsible gaming programmes and initiatives to ensure their compliance with applicable standards. The online video game industry has seen a surge of fraudulent and money laundering activity in recent years. According to stakeholders, due to its lack of enforcement of targeted laws and regulations the game industry fosters an environment for criminal financial activity. One concern of the Managing Partner,Hastrup Solicitors, Mr. Segun Adeyemi was money laundering and terrorism financing taking the swell of the gaming industry.
He and a number of stakeholders emphasized the need to implement fraud detection and prevention systems to detect and prevent suspicious transactions. To further combat money laundering in the gaming industry, the stakeholders want the industry and the government to introduce a unified KYC manual. The conference featured several panels to discuss issues in the industry, including creating rules and regulations on anti-money laundering (AML) standards that are enforceable and viable.
With the gaming industry in constant growth, the Director, Special Control Unit against Money Laundering (SCUML) Economic and Financial Crimes Commission (EFCC), Daniel Isei called on
d law enforcement agencies and operators to work together, combining technology and regulations, to identify, track and prevent financial crimes from occurring. According to him, the stakeholders will play a crucial role in information sharing, and advancing regulatory efforts to combat money laundering, gambling-related crimes, and other illicit activities within the gaming industry.
Head of Communications, Nigerian Financial Intelligence Unit(NFIU), Lucy Onwuka indicated that enthroning responsible gaming required a consistent standard of measures across the participating operators that will benefit consumers around the country.
Legal, Enforcement and Regulations Lead, Nigeria Data Protection Bureau, Babatunde Bamigboye stressed the need for a strong data premise to support responsible gaming regimes. For him, having the industry come together for a unified approach and standards will advance the course of the industry.
Managing Partner, WYS Solicitors Olafadeke Akeju wants a concerted effort to reposition the gaming industry for better performance.
For analysts, Nigeria was on the verge of becoming a big gaming market. The biggest concern on the horizon is whether people will be ready to adopt responsible gaming strategies.
