How FG can harness lottery revenue for development

FG, Federal Government, harness,lottery revenue, development
Stakeholders at the International Gaming Conference 2023 in Lagos

By Funmilola Gboteku

Time was when gambling was viewed as a nefarious activity, not only in Nigeria but all over the world. But not anymore.

The stigma associated with gambling, considered the favourite pastime of the nouveau riche, and men of the underworld, has now been completely eroded.

Thanks to technology, gambling now has new appellations – gaming, betting, lottery – putting a shine, or if you like, a stamp of legitimacy on it.

In recent times, gaming and online betting have become popular in Nigeria, with over 65 million young and old Nigerians actively engaging in it, spending at least 15 dollars daily on the average.

Recent statistics even claimed that more than 50 per cent of the country’s adult population engages in sports wagering activities. 

This has led to a proliferation of betting sites with over 100 betting sites said to be operating in the country.

Some of the popular sports betting sites are: Betway, Bet9JA, 1xBet, 22Bet, BETWGB, SportyBet, Premier Lotto (Baba Ijebu), NairaBet, BetKing and Lucky9ja Lotto.

Nigeria’s growth in the lottery business has been remarkable, and with a population of over 200 million, the country is considered the largest betting market in Africa.

But the question agitating the minds of Nigerians is whether or not sports betting is making the desired impact on the economy?

Global trends have shown that if properly regulated, the lottery industry has the potential to generate sizeable tax revenue for the federal government.

The revenue from the global online gaming market is projected to reach over 256 million dollars this year; it is also expected to experience an annual growth rate of nearly 10 per cent to reach more than 366 million dollars by 2027.

However, in spite of the huge number of Nigerians engaged in betting, the federal government generated less than N1billion revenue from the gaming industry in 2019.

Stakeholders in the gaming sector believe that Nigeria has the potential to earn a large chunk of the huge profits generated in the gaming sector.

Hence, the stakeholders have advised the federal government to create a framework to encourage the betting industry to contribute taxes to the country’s coffers.

For two days, Oct. 31 to Nov. 1, the stakeholders converged on Lagos to brainstorm on best strategies and solutions for the success of the Nigerian gaming industry.  

According to the stakeholders, the best strategies and solutions could be achieved through data protection in the gaming industry, addressing challenges inhibiting industry growth from stakeholders’ perspective, partnerships as well as overcoming stigmatisation in gaming.


Opening the Second International Gaming Conference on Oct. 31, the Minister of Special Duties and Intergovernmental Affairs, Hon. Zephaniah Jisalo, said efforts were underway to support the National Lottery Regulatory Commission (NLRC) to generate over N2 billion yearly as revenue from licences, other businesses in the lottery and gaming sector.

Jisalo explained that this would help the government raise more money to finance infrastructure development and boost economic growth.

On disputes threatening the growth of the industry, he said the ministry was not oblivious of the hitches in revenue collection in the gaming industry.

“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 a common ground for the good of stakeholders to enhance peace, harmony and progress,” he said.

Speaking on the growth of the industry, Mr Lanre Gbajabiamila, Director-General of NLRC, said the gaming industry was of vital concern to the government and key to its revenue enhancement.

“The gaming sector holds the key to economic growth and is a potent tool for addressing the pressing issues of unemployment and low per capita income. Nigeria has so much untapped potential, and its most precious resource is its population,” he said.

Gbajabiamila noted that the gaming industry had become more dynamic with technology, which he said created a digital era and fundamentally reshaped how people engaged and perceived the gaming industry.

According to him, this transformation has brought challenges and opportunities, making it increasingly complex for any state to assert complete regulatory control, especially in the light of the growing prevalence of online and remote gaming operators.

Speaking on new initiatives to promote the sector, he said the Commission would partner with operators in the gaming industry to build a world class online lottery university.

Gbajabiamila said the university would cater to operators and regulators by enabling them to stay in tune with evolving technology trends, development and best practices in the gaming industry.

He added that it would avail regulators the opportunity to combat sports betting harms through comprehensive education, active monitoring and data-driven research.

On blocking leakages and ensuring transparency in the gaming sector, He said: “The central monitoring system (CMS) will help us stop losing billions of money and know what each state is contributing to the main revenue.

“We hear of several billions of Naira flying up and down in the news about the money generated in the gaming industry, these are unverified news; only CMS can give us accurate data.

“The CMS will give us the real breakdown of all the transactions in its accurate figure, and will also help us to fight under-age gaming.”

He was emphatic that the industry had grown so much that the federal government and states must collaborate. 

On fraud and unwholesome practices, the NLRC D-G said the commission would need the support of other financial monitoring commissions to help.

Hammering on the importance of taxing the gaming and betting industry, Bello Maigari, executive secretary of the National Lottery Trust Fund (NLTF), suggested that the federal government should create a framework that would encourage the sector to contribute taxes.

Maigari said: “Moreover, leveraging the gaming and betting industry as a tax contributor can help create a level playing field for both local and international operators.

“By establishing clear and equitable tax regulations, we can encourage foreign players to operate within our regulatory framework, ensuring that we benefit from their presence whilst safeguarding our citizens.”

Experts also canvassed data protection laws to safe quad the sector. For instance, Dr Vincent Olatunji, National Commissioner, Nigeria Data Protection Commission (NDPC), noted that data breaches could lead to reputation damage which could make operators lose players’ trust and bring about negative media coverage.

According to him, violation of data protection laws may lead to severe penalties.

“The gaming industry is thriving, with data-driven experiences becoming the norm. Players’ data is a valuable asset and also a responsibility.

“Striking a balance between innovation and data security is crucial.

“It is essential to collectively commit to best practices in data protection within the gaming industry,” Olatunji added.

In his address titled: “Effective Regulation – A Key to Industry Growth through Efficient Stakeholder Management,” Aminu Maida, the Executive Chairman of Nigerian Communication Commission, said effective regulation played a pivotal role in fostering the growth and success of the gaming industry.

“Lottery industry is not an exception, having long been recognised as a source of entertainment, revenue, and a means to support numerous social and public initiatives.

“However, to truly harness their potential and ensure their sustainability, we must recognise the importance of robust and well-thought-out regulation,” Maida stated.


Lottery as a vehicle for scaling down unemployment and powering IGR

Maida added that effective regulation would ensure that the national lottery remained a trusted and transparent institution.

“Lotteries are designed for entertainment, but when not properly regulated, they can become addictive and detrimental to individuals and society. Effective regulation can implement responsible gambling measures.

“However, it’s essential to strike a balance between regulation and fostering industry growth. Overly burdensome or poorly designed regulations can stifle innovation and economic development,” he explained.

Prof. Rachel Volberg, Principal Investigator, Massachusetts Gaming Commission, who spoke on responsible gaming, harped on the need for credibility so that people would not be affected negatively.

“I’m more interested in how lotteries and gaming can reduce and minimise over involvement. It has to be done carefully so that it doesn’t affect people negatively,” she said.

She also stressed the need for players dealing with addiction to seek professional help or advice from a counselor.

In conclusion the stakeholders noted that in order to reposition the gaming and lottery industry for optimal growth, it was essential to santise the sector and put in place measures that would enhance the ease of doing business.

According to them, it is also necessary to adapt to evolving technological trends in the gaming industry, maintain public trust and foster an environment where participants can enjoy gaming without concerns about fraud, money laundering, or other illicit activities.


News Agency of Nigeria (NAN)