By Kayode Lawrence-Omole
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Introduction: Nigeria’s Growing Gaming and Lottery Sector
Nigeria has emerged as one of Africa’s most dynamic gaming and lottery markets, driven by a young population, increasing smartphone penetration, and a rising appetite for digital entertainment. Sports betting, online lotteries, casino-style games, and promotional gaming campaigns have all gained significant traction over the last decade.
The Nigerian gaming industry is estimated to be worth billions of naira annually,[1] with continued growth projected as internet access improves and fintech solutions expand. While this presents exciting opportunities for international operators, Nigeria’s complex regulatory landscape requires a careful, well-informed approach. Operators looking to enter or expand in Nigeria must navigate both federal and state-level regulatory regimes, secure the appropriate licences, comply with local advertising and consumer protection rules, and establish strong anti-money laundering (AML) and responsible gaming frameworks.
This article offers a comprehensive guide to the key regulatory considerations for international stakeholders seeking a foothold in Nigeria’s gaming and lottery space.
Licensing Requirements and Regulatory Bodies in Nigeria
- Supreme Court Clarifies: Gaming Regulation is a State Matter
Until recently, gaming regulation in Nigeria followed a dual-layered approach; federal and state governments both exercised authority over various aspects of the industry. However, in a landmark judgment delivered in Attorney General of Lagos State & 21 Ors v. Attorney General of the Federation & 16 Ors,[2] the Supreme Court of Nigeria ruled that lotteries and gaming fall under the residual legislative list, making them exclusive matters for state governments.
This decision has far-reaching implications: it effectively confirms that only state governments have constitutional authority to legislate and regulate gaming, betting, and lotteries within their territories. The National Assembly lacks legislative competence on such matters unless they touch on areas already within the exclusive legislative list, such as anti-money laundering or interstate commerce.
As a result of this ruling, the role of the National Lottery Regulatory Commission (NLRC) is now legally limited. While the NLRC may continue to regulate matters directly linked to federal entities or cross-border enforcement of other national laws (e.g. AML compliance), its authority to license or regulate lottery and betting operations nationwide is no longer constitutionally supported. Operators, especially international ones, should therefore be cautious about relying solely on a federal licence from the NLRC, as it may not confer legality in any specific state. Increasingly, state gaming authorities are asserting their jurisdiction and may treat unlicensed activity, even if federally approved, as unlawful.
- State-Level Regulation Now Central
Following the Supreme Court’s decision, state-level gaming authorities now play the primary role in granting licences and regulating the industry. The Lagos State Lotteries and Gaming Authority (LSLGA) remains one of the most structured regulators, covering:
- Land-based and online sports betting
- Casino and virtual gaming
- Promotional lotteries and prize competitions
- Mobile and digital gaming targeted at Lagos residents
Other active states include Ogun, Oyo, Anambra, Rivers, Edo, and the FCT, all of which have passed their own gaming laws and established regulatory bodies to oversee activities within their jurisdictions.
- Licensing Process and Requirements
Licensing processes may vary slightly across states, but generally include:
- Incorporation of a local Nigerian entity
- Proof of minimum capital base and financial solvency
- Submission of operational and technical plans
- Disclosure of beneficial ownership and board members
- Evidence of AML and responsible gaming protocols
- Application fees and annual licensing charges
Operators seeking to operate in multiple states must secure a separate licence for each jurisdiction, there is no longer any legal basis for a single federal licence to substitute for state approvals.
Advertising and Consumer Protection Rules
- Framework for Gaming Advertisements
Advertising and promotion of gaming services in Nigeria are subject to regulatory oversight aimed at protecting consumers and maintaining public order. State agencies like the LSLGA regulate gaming advertisements, and approval may be required before campaigns can go live, particularly for lotteries and betting promotions.
Operators must ensure their advertisements:
- Do not mislead the public or suggest guaranteed winnings
- Do not target minors or vulnerable individuals
- Are not deceptive or aggressive in tone
- Display responsible gaming warnings
Content that glorifies gambling or creates the impression that gaming is a solution to financial hardship is generally discouraged.
- Advertising Approvals and Sanctions
For lottery operators, promotional campaigns often require prior approval from the relevant state agency. Failure to comply can result in fines, suspension of advertising rights, or revocation of licences. Consumer complaints related to unfair promotions, unclear terms and conditions, or unfulfilled prizes are taken seriously. International operators must adapt their global marketing practices to meet these local expectations.
Anti-Money Laundering and Responsible Gaming Obligations
- AML Compliance Under Nigerian Law
Nigeria has taken significant steps to align its AML framework with international standards. The Money Laundering (Prevention and Prohibition) Act, 2022, applies to Designated Non-Financial Businesses and Professions (DNFBPs), including gaming operators.
Operators must:
- Conduct Customer Due Diligence (CDD) on all players
- Maintain transaction records for at least 5 years
- Report Suspicious Transactions Reports (STRs) to the Nigerian Financial Intelligence Unit (NFIU)
- Implement AML policies, controls, and staff training
Online platforms are expected to integrate secure payment systems that are traceable and compliant with Know Your Customer (KYC) standards.
- Responsible Gaming Measures
Nigerian regulators emphasise responsible gaming. Licensed operators are expected to:
- Provide tools for self-exclusion and deposit limits
- Offer clear and accessible information about problem gambling
- Prevent underage access to gaming services
- Display responsible gaming messages prominently on their websites, platforms, and adverts
The LSLGA and other state regulators routinely review operators’ responsible gaming practices and may impose penalties for lapses. Foreign entrants should incorporate these safeguards into their operating models from inception to foster goodwill and regulatory trust.
Strategic Tips for International Operators Entering Nigeria
- Understand and Respect the State-by-State Licensing Reality
After the Supreme Court’s ruling, there is no “one-size-fits-all” licence. Each Nigerian state has authority to regulate gaming in its territory. Operators should therefore research target states carefully. Know which states have active gaming boards, clear licensing regimes, and supportive environments for new entrants.
- Prioritise Local Partnerships and Legal Representation
Establishing a local partner or advisor is often the most effective way to enter the Nigerian market. Local entities can help foreign operators:
- Understand cultural dynamics and player behaviour
- Navigate regulatory processes and political sensitivities
- Manage customer service and physical operations (e.g., retail outlets)
Joint ventures, licensing agreements, or franchise models may also be considered for ease of market penetration.
- Tailor Products to Local Preferences
The Nigerian gaming consumer is mobile-first, highly engaged, and price-sensitive. Popular products include:
- Sports betting (especially football)
- Number-based lotteries
- Live betting and virtual games
Operators should localise content, integrate mobile money and fintech payment solutions, and price their products competitively.
- Stay Proactive on Compliance and Policy Trends
Gaming regulation in Nigeria is evolving. Regulators increasingly demand real-time reporting tools, tax transparency, and digital traceability. International operators must:
- Monitor updates to gaming laws and guidelines
- Engage with regulators through consultations or industry associations
- Conduct regular internal compliance audits
Being proactive in regulatory engagement demonstrates commitment and positions a brand as a trusted stakeholder.
- Localise Payment Solutions
Payment systems are critical to customer experience in Nigeria. Many players use: Mobile money (e.g. Paga, OPay), Bank transfers, and Card payments. Integrate popular local payment channels. Work with licensed payment service providers familiar with Central Bank of Nigeria (CBN) regulations.
- Rigorous AML and KYC Compliance
International gaming operators in Nigeria must follow strict AML rules by verifying customer identities (KYC), keeping transaction records for at least 5 years, reporting suspicious activities to the Nigerian Financial Intelligence Unit (NFIU), and using secure, traceable payment systems; all to meet legal requirements, avoid penalties, and build trust with regulators and players.
Conclusion: Navigating Nigeria’s Regulatory Landscape for Success
Nigeria presents significant opportunities for international gaming and lottery operators, but success depends on thoughtful preparation and ongoing compliance. From understanding the dual licensing structure to maintaining strict advertising, AML, and responsible gaming standards, operating in Nigeria requires both strategic patience and operational excellence. International brands that invest in local knowledge, adapt to the legal and cultural context, and build strong regulatory relationships are well-positioned to thrive in Nigeria’s increasingly formalised and profitable gaming sector.
Contact: Kayode Lawrence-Omole Risk and Compliance Expert Email: olukayode.lawrence-omole@dentons.com Tel: +2348077771670
[1] https://punchng.com/nigerias-online-gambling-surge-navigating-the-3-63-billion-market-in-2025/?utm [2] SC/1/2008
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