Online bettors in the state of Lagos in Nigeria will face an immediate 5% withholding tax on their winnings, the regulator has revealed.
Bashir Are, CEO of the Lagos State Lotteries and Gaming Authority, announced the new online gambling tax on Thursday in a public notice.
According to the notice, the deduction applies to net winnings from all Lagos-licensed platforms and has taken effect immediately.
The deduction will be automatically taken at the point of payout and will be remitted to the Lagos State Internal Revenue Service.
In the public notice, the LSLGA outlined the reasons behind the state government’s decision to implement the new tax.
“According to the state government, the measure forms part of Lagos’ broader drive to strengthen tax compliance, transparency and accountability in the rapidly expanding gaming sector,” the notice read.
Tax volatility poses a problem to growth in Africa
In December, Africa iGaming Alliance CEO Peter Kesitilwe told iGB that tax “volatility” was the biggest compliance challenge in Africa during 2025.
Kesitilwe warned such changes risked boosting black market activity, adding: “Sudden increases in withholding taxes, shifts to turnover-based taxation and the introduction of new levies have created instability for licensed operators.
“These abrupt changes often distort price competitiveness and accelerate the migration of customers to unregulated platforms.”
The state of regulation in Nigeria
The future of the Nigerian gambling sector remains clouded by ongoing uncertainty between the federal and state regulations.
In December, Nigeria’s President Bola Ahmed Tinubu declined to sign the new Central Gaming Bill that aimed to consolidate the regulatory authority under a single national commission.
The rejection means states continue to have the right to regulate gambling, rather than the federal government.
At ICE Barcelona in January, Are told iGB the onus to establish an attractive regulatory environment would now fall on state regulators.
“The Central Gaming Bill is dead,” Are said. “But we also know we have to provide an easy and conducive operating environment for operators.
“So we adopt what is obtainable in Germany, Canada, the United States and other places that have similar constitutional federalism like Nigeria.”
At the time Are also said the LSLGA would take the lead in providing a beneficial environment for operators. He added: “We make sure we are very transparent with the regulatory environment, so business is moving faster.
“We help you with the bank[ing]. We also protect from other government agencies and local governments, [to create] a very easy and conducive environment. And our taxes are very liberal too.”
Original article: https://igamingbusiness.com/finance/tax/lagos-enforces-withholding-tax-player-winnings/
