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The West African country of Nigeria is the continent’s largest economy, primarily due to its petroleum production and export industries, and is well-known for its long-time love affair with gambling of all kinds. Many in the gambling industry believe that Nigeria has the potential to become the continent’s largest online betting market.
Due to its economic leadership in Africa, what happens
in Naija may
affect the financial state of the rest of the continent. Yet, despite the
apparent success of both online and offline gambling enterprises in Nigeria
(with many benefits to the state), government officials are now looking to
seriously crack down on offshore and unregulated gambling operators.
Cracking down on unregulated
sites
The unprecedented growth of the gambling industry in Nigeria has proved to be
the largest obstacle for authorities to properly govern the actions of the
operators and players within the country.
When in December of 2019, the state of Lagos began granting
licenses for online sports betting, Nigerians were able to start playing at
offshore online casinos for decades without fear of prosecution.
Unfortunately, not all government agencies were kept
apprised of the swift growth in players playing in offshore establishments,
causing a backlash of issues such as capital flight, tax evasion, the
non-disclosure of financial transactions and movements of illicit funds.
The collaboration
Recently, the Nigerian Lottery Regulatory Commission (NLRC) sought out the
country’s Financial Intelligence Unit (NFIU) in order to form a cooperative
task force to restrict Nigerian gamblers from playing on unregulated sites.
Earlier in 2020, the NLRC had partnered with the country’s
Corporate Affairs Commission (CAC) to fight “unscrupulous companies” in the
country’s gambling industry. Although these organizations have previously
worked together to scrutinise operators, they’re now ramping up their efforts.
In a statement, NLRC director-general Lanre Gbajabiamila
said, “Our alliance and mutual cooperation are now more imperative, and as
responsible agencies, it is our duty to keep pace with the dynamic and growing
complexity of the modern lottery industry which features multi-channel
availability, the electronic delivery of play, and complex financial
transactions.”
It will be interesting to see how this new partnership
affects the ongoing reorganization of federal and state cooperation in
regulating this ever-growing and ever-changing industry.
Australia as a case study
We expect that Nigeria will continue its aggressive enforcement against
offshore operators. Nigerian officials, however, should be wary that many
countries have tried this in the past.
Australia is a perfect case-in-point. When the Australian
government regulators decided to crack down, they began by implementing site
blocking at an ISP (internet service provider) level. This did little to stop
the online casinos from simply bypassing the attempted blocks and then it’s
back to business as usual for
the offshore operators.
For this reason, the two federal departments in cooperation
with the state regulators must come up with better ways of combating the
unlicensed operators than have been tried in the past.
Gambling in Nigeria
The state of gambling in Nigeria is a complex beast. There’s no doubt that in
any nation, the gambling industry does provide significant benefits in the form
of jobs, revenue to healthcare and education, and, of course, general
entertainment for the population.
For many years, Nigeria’s offline sports betting and
gambling industry saw significant year-to-year growth, with its online gambling
counterpart gaining strength in the last decade or so with an increase in the
country’s population and widespread access to the internet. In 2018, it was
reported that Nigeria was the second-largest online betting market in Africa,
with gross gaming revenues of $58 million for that year.
The downsides, however, can be just as significant without
proper regulation. Federal and state regulatory agencies have never been on the
same page about current laws, licensing, or legal procedures for dealing with
gambling entities.
Corruption
Public officials in Nigeria do have good reason to fear for the future of
unregulated gambling in their country. Concerns have surfaced recently about
the uses of illicit money generated by illegal gambling in Nigeria. These
include things like money laundering, terrorism financing,
“financial leakages” to the unlicensed sector, and other issues that the new
regulations are aiming to stamp out.
Recently, the NLRC and the NFIU signed a Memorandum of
Understanding that contains their plans to combat these harmful forms of
corruption within the nation.
Ambiguous legal status
Confusingly, gambling is currently both legal and illegal in Nigeria,
complicating the status of regulated and non-regulated operators. Depending on
the type of gambling, the status of the game, operation, or casino could be
deemed legal or outside the law.
It’s not surprising then, that many Nigerian government
officials have called for new laws to clarify the status of gambling operators
in the country. Only time will tell whether the ongoing struggle between
federal agencies and state lottery boards issuing licenses and blacklisting
operators will solve the country’s current problems or only further muddy the
issue going forward.
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