Nigeria: Lagos Govt Proposing N200 Million Licence Fee for Lottery Operators

Nigeria: Lagos Govt Proposing N200 Million Licence Fee for Lottery Operators

An executive bill currently under consideration in the Lagos House of Assembly is proposing a N200 million licence fee for lottery operators, <a target=”_blank” href=””>PREMIUM TIMES</a> has learnt.

The fee covers a five year period.

Rotimi Olowo, the House committee chairman on finance, told PREMIUM TIMES Saturday that the bill has just passed second reading and is now being deliberated by a committee.

He said although the fee is to ensure that fraudsters do not get into the business, there are complaints from the operators.

“They now complain that N200 million for a five-year licence is rather on the high side,” said Mr Olowo, who represents Somolu constituency. “But they don’t know the other implications about that. Number one is that we don’t just want anybody to come in because it borders on even the integrity of the operators. So at the end of the day, the customers will not be swindled.

“Secondly, about the issue of the fees, some operators are currently paying that. Yes, we want competition but it must be healthy. It’s not a competition where every Tom, Dick and Harry will just come, there must be an entry point. And for those that paid for five years, that their payment is still running, what becomes their fate when we reduce that price?

“Then, if peradventure they don’t have capacity, as individuals, why can’t they come together to form one solid company? Because gaming is a big business, just like casino world over.”

Lucrative lotteries

The Lagos State Lotteries Board is the agency responsible for regulating lotteries, sports betting, scratch card and interactive games, casino, gaming machines operations, pools betting, promotional competitions and other gaming activities within Lagos.

According to information on the agency’s website, one of the requirements for online sports betting, casino, public online lottery, and gaming machine is that the applicant must have a minimum share capital of N20 million for each of the categories.

While the licence fee for online sports betting is N50 million for the first year and a yearly renewal of N10 million, the fees for the other categories include

Gaming machine: N2 million licence fee for the first year and an annual renewal fee of N1 million. The machine tax is N30, 000 per machine per annum.

Pool betting: N1 million licence fee for the first year and an annual renewal fee of N500,000. The minimum share capital, however, is N1 million.

Other games (games that do not fall under any of the traditional licence categories): N5 million per annum licence fee while monthly gaming tax is 2.5% of sales less winnings

Promotional competition: N500,000 licence fee and a lottery levy of N25,000 be it drawn daily, weekly, or monthly.

Mr Olowo said a new bill would consolidate all the existing gaming laws in the state, such as the Lagos State Lotteries (Amendment) Law 2008, Casino and Gaming Regulatory Authority Law (2007), Casino and Gaming Regulations (2007), Pools Betting Control Law (2003), and Pools Betting Tax Law (2003) among others.

“What we are trying to do, for ease of reference, is to consolidate all the laws into one. And that’s why it’s that voluminous. It’s 109 sections,” he added.

The new bill also proposed that an applicant must have a local content shareholder with a 15 per cent minimum shareholding in the company.

Mr Olowo said he opposes the argument that international investors will not be “too comfortable” when there is local content of 15 per cent Nigerians.

“If you go to Dubai today, you cannot do any business if it’s not supported by [a] local, and that will allow a lot of Nigerians to have something doing. We cannot give everything to foreign investors without considering the interest and welfare of Nigerians.”

‘Multiple taxations’

Gaming operators and stakeholders in Lagos State say they are unhappy with existing and proposed regulations governing the sector because authorities are yet to resolve the issue of multiple taxations by national and state regulators

“Currently, the federal government and all states’ government are collecting license fees and monthly taxes from operators and this act is gradually crippling the industry,” Adebimpe Akingba, the executive secretary of the Association of Nigerian Bookmakers (ANB), said in an e-mailed response.

“It is unfortunate that despite repeated plea to parties to reach a workable solution on ending the illegal multiple taxation regime, nothing has been done about it till date.”

The ANB is the national trade association that represents sports betting, lottery, and gaming operators in Nigeria.

“The N20 million share capital is actually not of utmost concern as there are other sections in the proposed bill, which if passed as it were, is capable of wrecking the industry,” Mrs Akingba continued.

“It is self-serving for Lagos State to seek to enact this proposed bill without harmonizing its position with the Federal Regulatory Body on resolving the above long-existing issue. We are closely monitoring this new development as it unfolds and will take all available steps to protect the interest of our members.”

Mr Olowo said the bill is proposing different licence fees for the different gaming categories and suggested measures that could be taken to mitigate the pressure on lottery operators.

“After the initial N200 million for five years, subsequent years, we can give them some discount. Maybe after the payment and expiration of that N200 million for the first five years, when they want to renew, they can say 80 per cent of the initial payment is what they should renew with.

“But entry point is going to be strict, subsequent payments is going to have some form of, maybe, compensation. Provided that that operator is not a fraudster and paid players as at when due.”