Lagos, Nigeria – The Lagos State Government has announced the commencement of a 5 percent withholding tax on gaming payouts, directing all licensed betting companies to begin immediate automatic deductions from customers’ winnings.
Okay News reports that the directive, issued in a public notice by the Chief Executive Officer of the Lagos State Lotteries and Gaming Authority, Mr. Are Bashir, confirms the policy takes immediate effect and applies to players’ net winnings. The deducted amount will be remitted to the Lagos State Internal Revenue Service as the statutory tax authority. Bashir said the measure forms part of Lagos’ broader drive to strengthen tax compliance, transparency, and accountability in the rapidly expanding gaming sector.
Under the new arrangement, players must provide their National Identification Number in line with Know Your Customer regulations. Bashir clarified that all deductions and remittances will be handled strictly by licensed gaming operators, with proper documentation maintained for transparency. He also noted that the withholding tax deducted will serve as a tax credit for players.
The enforcement has several implications for the gaming ecosystem. Players will receive 5 percent less than their net winnings at payout, as the tax is deducted at source. The tax deducted can be used as a tax credit for players in their overall filings. Operators must upgrade systems to automate calculation, deduction, and remittance processes. However, there are concerns that lower net payouts could discourage some players or push them toward unregulated platforms, potentially affecting engagement levels for licensed operators.
In October 2023, the authority warned residents against patronising unlicensed gaming companies and issued banning orders against operators offering gambling services without proper authorisation. The Authority stated that operating without a licence breaches Section 33(3) of the Lagos State Lotteries and Gaming Authority Law 2021.
