Over the past few years, Nigeria has experienced accelerated growth in the gaming and betting industry. This growth is basically driven by increasing internet and mobile penetration and the availability of digital payments options offered by fintech. All these have made it simpler for more individuals to access gaming and betting, propelling the growth of the industry at a fast pace.

How to Start a Gaming and Betting Business in Nigeria

The first step in the process of establishing a gaming and betting firm in Nigeria is to have the firm registered with the Corporate Affairs Commission (CAC). The minimum share capital varies depending on the type of gaming activity:

• Sports Lotteries – A minimum of ₦30 million in share capital
• Non-Sport Lotteries – A minimum of ₦5 million in share capital

Following company registration, companies are required to be licensed by the National Lottery Regulatory Commission (NLRC). The 10-year duration is the lifespan of the license, unless suspended or revoked. Companies wishing to operate within Lagos State must also possess a special license issued by the Lagos State Lotteries Board (LSLB).

Regulatory Agencies for Gaming and Betting in Nigeria

Nigerian gaming and betting activities are regulated by several agencies at the federal and state level, including:

• National Lottery Regulatory Commission (NLRC) – The regulatory body regulates gaming and betting activities across the nation.
• Lagos State Lotteries Board (LSLB) – Regulates gaming activities in Lagos State.
• Other State Lottery Boards – Certain states have their own regulating bodies for gaming and betting activities.

Important Legislations Regulating Gaming and Betting in Nigeria

The sector is regulated by a variety of legal instruments, including:

• National Lottery Act, 2005
• National Lottery Regulations, 2007 (as amended)
• Lagos State Lotteries Law, 2004 (for Lagos State)
• Varying lottery laws enacted by other states.

Types of Licenses Granted by the NLRC

The NLRC grants different types of licenses based on the nature of gaming operations:

1. Lottery License
2. Sports Betting License
3. Promotional Lottery License – Applies to lotteries based on SMS/USSD, interactive schemes, scratch cards, internet-based lotteries, and other types as may be established by the NLRC.

 

Cost of Obtaining Gaming and Betting Licenses

The charges for application to the NLRC for gaming permits are as below:

• Lottery License – ₦2,000,000
• Sports Betting Permit – ₦2,000,000
• Other Permits – Different fees depending on the type of lottery (e.g., SMS/USSD, interactive schemes, scratch cards, web-based operations). These are subject to document review by the NLRC.

 

Application Process for Gaming and Betting Licenses

Obtaining a gaming license is a formal three-stage approval process:

Phase 1: Application Stage

1. Submit formally a letter of application to the NLRC, along with a properly achieved application form, business proposal, and payment receipt of the application fee.
2. Submit properly achieved forms with a Director and Company Secretary’s signatures, and all supporting documents.

Phase 2: Approval in Principle

1. The NLRC shall act on the application within 21 business days. If additional information and documents are required, the period of consideration may be extended.
2. The applicants will be notified of their application status (approval or disapproval). Those who are approved will proceed to the next step.
3. Approved applicants will be invited by the NLRC to submit an outline of proposed gaming operations.
4. NLRC will visit the applicant’s facilities, the server center, headquarters, and model outlets in order to verify compliance with regulations.
5. The Approval in Principle (AIP) is valid for 90 days, within which the applicants have to comply with all conditions necessary for full licensing.

Phase 3: Final Licensing

1. The applicant has to comply with all approval conditions within 90 days.
2. The NLRC may ask for additional documents, request further inspections, and require payment of full statutory fees.
3. Successful applicants have to sign the Terms & Conditions of operation.
4. Upon the end of the process, information of the applicant shall be exhibited on the NLRC website as a licensed operator.

 

How to Obtain a Sports Betting License in Lagos State

Online sports betting business is regulated in Lagos State by the Lagos State Lotteries Board (LSLB). The process, even though similar to that of the NLRC, is more streamlined.

 

Principal Requirements for an Online Sports Betting License in Lagos

Companies that want to operate in Lagos must:

• Be registered in Nigeria with a minimum share capital of ₦20 million.
• Submit an application letter and the following:

1. Receipt of payment of non-refundable application fee of ₦500,000
2. Incorporation documents
3. A detailed business proposal, including company structure, market research, financial projections, and directors’ profiles.

LSLB typically requires 10 to 15 business days to consider applications. Where they are approved, the applicant would be invited for presentation and thereafter granted an Approval-in-Principle (AIP).

Cost and Licensing Time in Lagos

• Approval-in-Principle (AIP) Fee – ₦50,000,000 (payable on satisfaction of all conditions).
• Business Name: Final License Validity – 5 years, renewable every five years at a fee of ₦10,000,000.

Regulatory Compliance in the Gaming and Betting Industry

The licensed operators are subject to various regulatory demands, including:

• Monthly Tax Payments – Operators pay 3% of their monthly sales turnover, where 1% goes to the NLRC and 2% to the National Lottery Trust Fund.
• Submission of Monthly Reports – Licensees are supposed to submit reports on operations and finances before the 10th of each month.
• Annual Compliance Reports – Annual reports should be submitted by the operators to the NLRC by June 30 of every year. Financial accounts should also be externally audited within six months after the end of each financial year.
• Use of Modern Technology – Operators should incorporate modern technology to facilitate transparency and efficiency.
• Fraud Prevention & Reporting – The license holders should watch out for fraud and report any suspicious behavior to the NLRC.
• Strict Compliance with Authorized Schemes – Any deviation from an authorized lottery or betting scheme should be approved by the NLRC beforehand.

Restrictions and Prohibitions

• Political office holders in Nigeria are not allowed to have any financial interest in a lottery or betting license.
• Operators are required to inform the NLRC of any modification of their business form, ownership, or intended operations, particularly when the license is due for renewal. This could lead to license cancellation.

 

Nigeria’s gaming and betting sector continues to boom despite challenges, one of which is regulatory, with the conflict of federal and state licensing being prominent among them. The cost, high as it is, and complicated approval procedure might also keep out new players and foreign investors.But with the efforts of the government to make policies friendly to businesses, improved licensing procedures and regulatory openness are not far away.

 

Do you wish to set up a gaming and betting firm in Nigeria? Our team of Lawyers can guide you through the process of licensing and regulation. Contact us for guidance.