Gambling generates roughly N250 billion ($600 million) yearly in Nigeria. Until recently, the market has been inadequately controlled, which benefits neither the government nor people who gamble.
With a focus on all forms of gambling in Nigeria, the Nigerian government has recently consolidated existing regulations. Can Nigerian authorities learn from Germany’s new legislation protecting gamblers and generating revenue?
Nigerian Gaming Industry Growth
Online casinos and sports betting companies have increased the popularity of gambling in Nigeria. According to certain estimates, up to 70% of Nigerian adolescents routinely bet on football games.
Money spent on gaming is rising as new operators join the industry. It is quite profitable for betting organizations to anticipate to make roughly three times what they invest. In spite of the legal gambling establishments, most of the money is spent on illicit casinos and bookies.
The current legislation looks to be unsuitable, with varying state and federal gaming rules. Gambling operators pay substantial licensing fees and several taxes to authorities. This situation just encourages illicit activity.
Online gambling, which accounts for a major portion of GGR, is unregulated. Online casinos are officially outlawed in Nigeria, hence there are no local providers. In reality, nothing is done to stop foreign gamblers.
Consequences of Regulator Ina
This has three effects. First, the government receives no revenue from illegal and internet gambling. Globally, gambling is taxed and the proceeds may be used to finance public purposes, but in Nigeria, less than 5% of GGR goes to local causes. Compared to the US, where roughly 30% of gaming money goes to the state, Nigeria is clearly losing out on a critical revenue stream.
The absence of player protection is the second impact of an uncontrolled market. In places with stricter regulations, the emphasis is on preventing problem gambling and helping those who develop it. Consider Nigeria, where many individuals frequently gamble over 10% of their monthly income on sports events, and the need for responsible gambling policies.
Furthermore, internet gamblers are vulnerable to unscrupulous operators in the present climate. In an uncontrolled industry, unauthorized casinos and sportsbooks may easily locate consumers. These sites often cheat players by rigging games or refusing to pay out.
Finally, a lack of regulation encourages money laundering. The Nigerian authorities plainly do not want to promote such unlawful operations, hence actions must be taken to curb them.
New German Laws Show Nigeria the Way
German gamblers enjoyed free access to overseas gambling sites, while local legislation only covered a few land-based casinos and disregarded internet gaming.
The July 2021 amendments were broad and, in some eyes, overly harsh. The Interstate Treaty on Gambling allows businesses to buy a five-year license, the same as Nigerian casinos and betting shops, providing they follow strict requirements. The new structure, according to MrCasinova, has modified the online casinos they evaluated.
These limitations include modest monthly deposit limits, casino bonuses limited to €100 (just about 50,000 naira) per year, and no in-game sports betting. Another example is the requirement that a single spin on a slot machine must last no less than five seconds.
While the responsible gaming regulations have been well welcomed, the increased taxes has not. Germany levies a direct tax of 5.3 percent on each bet. Many other nations do not charge this manner since it encourages players to use black market sites where they do not have to forfeit a percentage of their deposit money whether they win or lose.
For the reasons stated above, it is evident that Nigeria’s gaming regulations need change. An example of a recent effort towards obtaining a central monitoring system to regulate gaming countrywide and legalize iGaming companies was the National Gaming Conference held in Lagos in July of 2019.
If managed properly, gaming can fund state initiatives and employ thousands of Nigerians. The conference focused on building a robust iGaming industry while protecting players and preventing fraud. The Lagos State Lotteries Board has teamed up with renowned online training specialists iGaming Academy. With the relationship, the industry will learn about worldwide compliance requirements, particularly around responsible gaming and anti-money laundering.
Nigerian authorities should also look to Germany and see how their new treaty impacts the industry, both financially and in terms of player safety. Players will have little motivation to patronize locally permitted gaming sites or facilities as long as black market options remain.