The Lagos State Lotteries and Gaming Authority has introduced a 5% withholding tax on the net winnings of online bettors, effective immediately, according to a public notice issued Thursday.
The deduction applies to payouts from all Lagos-licensed gaming platforms, regardless of whether the player resides in the state. The tax will be withheld at the point of payout and remitted directly to the Lagos State Internal Revenue Service.
Bashir Are, chief executive officer of the regulator, confirmed the move in the notice. “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.
Nigeria’s gambling market has grown in recent years, driven by online betting and participation among younger consumers. Legal gaming offerings include sports betting, lotteries, casinos, and promotional competitions. Operators must be registered with the Corporate Affairs Commission and licensed by the Lagos regulator.
Regulatory fragmentation persists
Nigeria operates under a dual framework in which federal and state authorities share responsibilities. The National Lottery Act of 2005 and the National Lottery Regulation of 2007 provide federal oversight, while states maintain their own gaming and tax statutes.
In Lagos, oversight is based on the Casino and Gaming Regulatory Authority Law and the Lagos State Lottery Law, amended in 2008. Other states operate under separate frameworks, such as Anambra State’s Gaming Law of 2005. In 2024, Nigeria’s Supreme Court ruled that states hold primary jurisdiction over gaming activities.
In December 2025, President Bola Ahmed Tinubu declined to sign the proposed Central Gaming Bill, which sought to consolidate supervision under a national commission. As a result, state regulators continue to set independent policies.
Industry reaction and regional context
Industry participants have raised concerns about tax volatility across African markets. 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.”
Regional comparisons illustrate varying fiscal approaches. Kenya applies a 5% withholding tax on withdrawals and a 5% excise duty on deposits. South Africa has proposed a 20% withholding tax intended to address gambling-related concerns. In Ghana, operators are taxed at 20% Gross Gaming Revenue (GGR), although the country repealed its winnings tax following public debate.
Lagos’ 5% rate positions it below South Africa’s proposed 20% withholding level and Ghana’s 20% GGR model. However, observers cited in local media have noted that higher tax burdens can influence player behavior, particularly in markets where offshore platforms remain accessible.
For operators active in Nigeria, the new Lagos withholding requirement introduces an additional compliance obligation at the state level, while federal reform efforts remain unresolved.
Original article: https://www.yogonet.com/international/news/2026/02/23/117721-lagos-introduces-5-withholding-tax-on-online-betting-winnings
