There are aspects of gambling that are legal in Nigeria. The Nigerian Lottery was legalised in 2005, and the wider gambling landscape is dealt with under Chapter 22 of the Criminal Code Act enacted in 1990. This law defines which aspects of gambling are legal, including land-based casinos, sports betting, and the lottery.
It does not deal with online gambling. Therefore, there is no determination as to whether this sector is legal or not; it’s a grey area. If there was a regulation of online casinos in Nigeria, it could bring benefits similar to those in the United Kingdom (UK) and the United States of America (USA). Let’s examine this situation in more detail, starting with the problems that the lack of regulation in Nigerian online casinos brings.
The issue of a non-transparent online casino legal situation in Nigeria
You only need to look at the situation with online sports betting in Nigeria to know that there is an appetite for gambling online. In 2019, a report by Research and Markets valued the overall sports betting industry in the country at around $2 billion dollars. Further to this, of the total Nigerian population of 219,921,954, estimates suggest that close to 60 million people bet on sports online.
Currently, a “Finance Bill” is awaiting presidential assent that will amend section 15 of the Companies Income Tax Act (CITA). The amendment will lead to taxation on the lottery and gaming industry and will clarify the taxation situation in this area.
However, given that online casinos in Nigeria are not currently regulated, this taxation legislation will not apply to them. This is an issue given that the government would find this additional revenue useful. A regulated online casino industry could also provide additional jobs in Nigeria, and boost the already healthy economy in a country which has the highest GDP in Africa.
Comparing the legality of online casinos in Nigeria with the UK and US
To get a better idea of how Nigeria could benefit from the resolution of the online casino regulation issue, it’s interesting to look at markets in other countries, such as the UK and the US. For example, the UK has a large regulated online casino industry that creates welcome taxation revenue for the government. This taxation is levied on a gross gambling yield (GGY) of £3.2 billion for remote gambling overall. Levels of taxation range from 15% to 50%, depending on the level of GGY.
Players at online casinos in the UK can choose to play at sites that are licensed to operate in the country. These casinos that have UK Gambling Commission (UKGC) licenses are registered with GAMSTOP. The GAMSTOP organisation allows players to self-exclude themselves from all UK licensed casinos at the same time. These casinos and betting sites employ many of the estimated 46 thousand people who work in the UK betting industry overall, providing a welcome boost to the UK economy. In addition, many players choose to play at UK casinos not on GAMSTOP that are licensed elsewhere.
The position in the US is more similar to Nigeria’s than that in the UK in that sports betting is more widely regulated than online casinos. The landscape in the US perhaps shows how Nigeria could begin to progress to a widely licensed market like that in the UK by at least opening up the idea of regulating online casinos.
The difference is that the US does not regulate on a federal (countrywide) level in the way that Nigeria would. Instead, regulation in the US is at the state level, with only five states having regulated online casinos and one having regulated online poker. This compares with 36 states that have legal online sports betting. Of the states that have legal online casinos, New Jersey is the most advanced with its provision, and the industry aims to make $2.3 Billion a Month by 2025. These significant earnings are a further indication of what could be achieved with a regulated online casino market in Nigeria.