Will Nigerian States Give Up Their Regulatory Rights?

September 1, 2022
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The Nigerian High Court has ruled in favour of the country's federal regulator in a long-standing dispute with states over who regulates the market, but doubts remain that local governments will let go of the licensing systems from which they collect taxes.

The Nigerian High Court has ruled in favour of the country's federal regulator in a long-standing dispute with states over who regulates the market, but doubts remain that local governments will let go of the licensing systems from which they collect taxes.

In Lagos earlier this month, Justice Nicholas Oweibo pronounced that the National Lottery Regulatory Commission and the National Lottery Trust Fund have sole authority over gambling, after years of battles between the federal and state gambling regulators.

The Bookmakers Association of Nigeria initiated the lawsuit to address concerns over paying multiple taxes and licensing fees to states and the federal government.

Olabimpe Akingba, a lawyer who worked on the suit, said on social media that operators do not want to remove the state or the federal regulator, but instead want to encourage them to “collaborate and agree on revenue sharing with the aim of ending multiple taxation within the industry”.

“Hopefully by this decision, the Federal and State regulators will be willing to meet and chart a way forward for the industry,” Akingba said.

The other side of this judgment means various state regulators have been stripped of their right to carry out regulatory functions within their jurisdictions, such as their right to licensing and collection of taxes for gambling activities.
 
Currently, gambling regulation is localised in a way that has restricted federal licence holders from operating within individual states where they do not hold a licence.

It is unlikely this will be the last ruling on this state versus federal dispute and the full impact of the judgment has yet to be seen.
 
The Federal High Court’s view that the federal government has the sole right to regulate the gambling industry is based on the National Lottery Bill 2005, which was formulated at a time when Nigeria's federal government was in dire need of revenue.

The country faces a similar challenge now. In July, inflation in Nigeria reached a high of 19.64 percent.

Some of that much-needed revenue could come from the sellers of National Lottery-backed games, which should be buoyed by this judgment, as it could open a path for them to gain access to state jurisdictions to operate terminals and promote their products.

The federal government has also promised that new Nigerian National Games, which were recently launched, will generate jobs and tax revenue.

And some of the revenue generated from these “National Games” has been earmarked to be shared among the states, which bolsters the need for a central monitoring system.

The creation of a central monitoring system is covered in the National Gambling Bill (HB 1288), which also includes changes that would improve taxation and clamp down on unlicensed operators. The bill is awaiting its third reading; however, it had not been scheduled at the time of writing.

A complete version of the National Gambling Bill has also not yet been published, but its contents have been discussed by lawmakers.

         

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