Charting Nigeria’s online gambling growth amid regulatory battles

One of the most exciting emerging global online gambling markets is Nigeria, boasting a youthful population that H2 Gambling Capital forecasts to lead it to gross gaming revenue (GGR) of €675.1m (£576.8m/$717.2m) by 2025. With a legal battle over regulation ongoing, though, how exactly is it achieving its success?

Firstly, it’s imperative to note the demographics of Nigeria, which is the most populous country in Africa with well over 200 million inhabitants. According to a report from The Economist, that population is predicted to grow to 400 million by 2050, surpassing the US as the third most-populous country on the planet.

Looking closer at Nigeria’s populace reveals a hugely youthful population, with figures from the World Factbook outlining that approximately 41% of people in the country are aged between 14 and under, with the average age of a person in Nigeria just 19-years-old.

Taking those demographics aspects into account, and it’s clear to see why there is excitement over how Nigerian gambling can grow with its population to challenge South Africa at the top of the African industry.

The “huge” potential in Nigeria

With a youthful population with a strong interest in sports, Nigeria’s gambling market has gone from having largely just local operators to now seeing some international brands making an entry, including Betano and Betway.

Olabimpe Akingba is a legal practitioner with over a decade of experience in gaming, serving as the executive secretary of the Association of Nigerian Bookmakers between January 2020 and February 2024.

Akingba is excited by the growth of the Nigerian gambling market, particularly in the online space, where increases in internet penetration in recent times have provided a big boost.

Akingba believes Nigerian gambling will continue on its upwards trajectory, saying:

“We know that in Nigeria, the gaming industry continues to have huge potential. The growth of technology has contributed immensely to the development of the Nigeria gaming market. Now we see a lot of competition in the igaming space, which has also shaped the industry.”

Ongoing regulation battle threatens to slow growth

That’s not to say there aren’t obstacles for Nigerian gambling to overcome, however. Perhaps the most prominent of those is the current regulatory system, with the presence of both a federal regulator and state regulators causing tension.

The National Lottery Regulatory Commission (NLRC) regulates gambling at the federal level, though some state regulators refuse to recognise federal licences issued by the NLRC.

A long-running dispute between the NLRC and state regulators has also reached Nigeria’s Supreme Court, with disagreements on whether federal-licensed operators must also obtain state licences. However, it’s unclear exactly when a ruling will be made.

For Opeyemi Osilojo, whose time in Nigeria’ gambling industry included nearly three years spent as brand manager at Parimatch, the regulation troubles are one of the core challenges he identifies to growth of the market. Osilojo cites the US, where states are able to establish their own regulations without federal oversight, as the kind of “clear-cut” regulatory system the operator-side is looking to have.

“Each state wants to regulate betting as they seem fit. The challenge is that the federal government also wants to regulate the space because of revenue.”

“At the moment what is obtainable is a working agreement just so that the industry doesn’t collapse and both states and the federal government get something from that thriving industry. But in terms of reaching a definite working plan, the case is still in court on how you’re going to pay for licenses and some other stuff like that.” – Osilojo says.

Harmonisation is crucial

Currently, all operators in Nigeria are mandated to gain a licence with the NLRC, though Nigerian law doesn’t mention online gambling. Operators with federal licences for land-based offerings may still have to get a state licence, while online companies licenced with the NLRC are free to operate without a state licence.

The key resolution for Akingba is increased collaboration between state and federal regulators to work together and allow Nigerian gambling to fulfil its evidently huge potential.

“The way forward is harmonisation of regulations as the federal and state regulators need one another. There is need for collaboration to properly regulate the industry. However, as it is right now, the challenge it poses is the burden of ensuring compliance with multiple licenses for Federal and State, which is burdensome on the activities of gaming operators in Nigeria.” – Akingba explains.

“Secondly, the challenge has many financial implications as national and state license are subject to licence renewal fees and monthly gaming tax, which is why we see more operators preferring to conduct their activities online and dealing solely with the national regulator.”
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