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Nigerian online gambling: a growth chart amid regulatory challenges

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Nigeria is one of the fastest-growing online gambling markets in the world. With a young population, H2 Gambling capital predicts that it will reach a gross gaming revenue of EUR675.1m by 2025 (PS576.8m/$717.2m). How is Nigeria achieving success despite a legal fight over regulations?

First, you should be aware of the Nigerian population, the largest in Africa, with over 200,000,000 inhabitants. A report by The Economist predicts that this population will grow to 400 millions in 2050. This would make Nigeria the world’s third-most populous nation, overtaking the US.

Nigeria has a very young population. According to the World Factbook, 41% of the people are between the ages of 14 and 19, with an average of 19 years old.

Taken into consideration, it is easy to understand why the excitement about how Nigerian gaming can expand with its growing population and challenge South Africa as the leader of the African gambling industry.


Nigeria’s “huge potential”

akingba pointed out that the online gambling industry in nigeria is a growing market.

Nigerian gambling has a young population that is very interested in sports. International brands like Betway and Betano have now entered the market.

Olabimpe is an experienced legal professional with a wealth of gaming experience. She served as executive secretary of Association of Nigerian Bookmakers from January 2020 to February 2024.

Akingba has been excited about the rapid growth of the Nigerian gaming market. This is especially true in the online sector, where the recent increase in Internet penetration gave it a major boost.

Akingba is confident that the Nigerian gaming industry will continue to grow. He said: “We are aware of Nigeria’s huge gambling potential.

The growth in technology has greatly contributed to the development and success of the Nigerian gaming industry. We see that there is a great deal of competition within the gaming industry.


The ongoing regulatory battle could slow down growth

It’s important to note that there will still be obstacles to gambling in Nigeria. The current regulatory system is perhaps the biggest obstacle, as it has both federal and state regulators.

The National Lottery Regulatory Commission regulates federal gambling, although some states refuse to recognize federal licenses issued by the NLRC.

The Supreme Court of Nigeria has heard a long-running dispute involving the NLRC, state regulators and whether operators licensed by the federal government must obtain licenses from state governments. It’s not clear when the ruling will come.

Opeyemi osilojo sees the regulatory issues as a major challenge to the growth of the Nigerian gambling market. He spent nearly three years at Parimatch in the Nigerian gambling industry. Osilojo says that the US is the best example of a “clear” and transparent regulatory system for the operators. States are allowed to set their own rules without any federal oversight.

Osilojo explains, “Each state is free to set its own rules for gambling.” The federal government wants to regulate this space as well, because it generates revenue.

The only thing that is possible at the moment is to reach a workable agreement, so the industry does not collapse. This will allow both the states and federal government to benefit from this thriving business. The case in court is still pending on the issue of how to pay for licensing and other things like that.


The importance of Harmonisation

Currently all operators are required to obtain a license from the NLRC in Nigeria, even though Nigerian laws do not mention online gambling. Operators who have federal licenses to offer land-based gambling may need to obtain a state licensing, while companies licensed with the NLRC can operate online without a licence from a specific state.

Akingba’s key solution is to increase collaboration between federal and state regulators, so that they can work together to allow Nigerian gaming to reach its enormous potential.

Akingba says that the way to move forward is through harmonisation, as federal and state regulators are dependent on each other. Collaboration is needed to regulate the industry properly.

The burden on gaming operators is to comply with the multiple licensing requirements for Federal and State.

The challenge is also financial, as the state and national licenses are subjected to monthly gambling tax and licence renewal fees. This is the reason why more operators choose to do their business online, and deal only with the regulator at the national level.


Lagos is the center of gambling in Nigeria

Lagos, Nigeria’s largest city has a population of over 20 million. Lagos State Lotteries and Gaming Authority, its regulator (LSLGA), is at the center of the conflict between federal and state regulators.

Bashir Are is the chief executive of the LSLGA and hopes that the Supreme Court’s case will be settled by 2024. Are, despite the court case that is ongoing, believes Nigerian gaming will continue to grow thanks to the young population and advances in technology such as fintech.

Are does not categorically state that Nigerian gaming is larger than South Africa, but he thinks it will surpass the market at some point. At one time, South Africa accounted for almost half of all African gambling.

Are is convinced that the LSLGA’s regulatory system meets European standards, and highlights its collaboration with Malta Gaming Authority (MGA) as well as regulators in Cyprus as the UK.

Are says that Lagos is the benchmark. It’s open and transparent. Lagos is a great place to start a business.

Lagos is its own country, with high-educated people and abundant internet. Lagos is also Africa’s entertainment capital, making it a very promising place, particularly with its first esports stadium in West Africa.


BetKing is one of the leading

BetKing Nigeria is a subsidiary of KingMakers – a betting and entertainment company that operates in other African nations such as Ghana, Kenya and others.

Early April BetKing made an announcement with Genius Sports about its deal to provide in-play sports content for Nigerians, including football and basketball.

Onu Abraham, corporate communications manager for KingMakers sees BetKing among the top three gambling companies in Nigeria.

Abraham believes that BetKing’s innovative offerings will help it further cement its position at the forefront of Nigeria’s gambling industry. He said: “BetKing stays competitive in Nigeria through innovation and improving customer experience.

The company has partnered recently with platforms such as PalmPay and Paga to improve the consumer’s experience and smoother transaction. They have a strong focus on responsible gaming and work with local sport groups to further strengthen their market position.


Will Casino Stop Stagnation in Nigeria?

BetKing’s innovation should continue to grow the Nigerian gambling market. Osilojo believed that the industry was at risk of stagnation, as operators were largely using the same product offering.

betking is looking to innovate to consolidate its place in the nigerian market

Osilojo says, “It’ll keep growing.” “I also think that one of the biggest things was a stagnation with innovation. Everyone was selling basically the same thing. Your unique selling proposition will not be odds but rather how quickly you can pay.

There was no customisation in the product range. “Everyone was selling the exact same product, which in and of itself didn’t give any interesting information to customers.”

Osilojo believes that casino can help to prevent stagnation. He cites the growth of this sector in the Covid-19 epidemic and the suspension of sporting events.

Osilojo says, “I believe there’s been a growth in the casino space in Nigeria.” When I first started, in 2015, I spoke to some business owners who said that casino contributed, say, only 4% of their revenue. Some have as much as 12%-18% of their revenue at this time.


The black market is a problem

The presence of illegal operators is a major concern in Nigeria, even though the product ranges are wide.

Abraham believes that the market dynamics and regulatory compliance are factors in the rise of the black markets. He also claims to be taking action against illegal operators.

Abraham says that the black market is still a problem in Nigeria’s gaming sector. To address the issue, efforts include strengthening regulatory structures, promoting responsible gaming, and encouraging collaboration between stakeholders in the industry and regulators.

Akingba believes that it is the responsibility of regulators to ensure taxation policies are favourable to keep them from straying onto the dark side of the marketplace.

Akingba states that it is important for regulators and legislators to consider the effect of tax policy on the gaming sector.

By considering this factor they can make sure that licensed operators are profitable, and the channeling rates, that direct customers to licensed operators, remain high. The industry will thrive and promote a safe, regulated environment.

The LSLGA banned a number of gambling operators in October 2023.

Are also says that the LSLGA wants to increase collaboration with other organizations to help it in its efforts to stop the black market.

We are working closely with national communication bodies and financial fraud unit to block and pursue them outside Nigerian border.


Nigeria, the elephant in the Room

Abraham highlights the exciting future of Nigerian gaming, highlighting technological advances, increased internet access, and a population that is interested in sports.

Akingba is encouraged by her observations of growth and is certain that Nigerian gaming will continue to improve in terms of innovation and the quality and experience it offers. She also believes that a solution for regulation is coming soon.

Akingba says that he hopes to see the Nigerian gambling industry harmonised in the future. The focus of the discussion will be to prevent double taxation. I am confident that it will occur sooner than anticipated.

According to Osilojo, Osilojo believes that the youth-dominated population offers a great opportunity for growth.

Osilojo explains that the minimum age to bet is 18. “There are a large number of people in this area,” he says.

The country has already got it. “You just need to have the resources and mechanics in place to get those people.”

The gambling industry in Nigeria is expected to keep on growing despite the fact that the Supreme Court could issue a ruling by the end the year.

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