The Lagos State Government has begun enforcing a five per cent withholding tax (WHT) on gambling and gaming winnings from licensed operators.
Under the new directive, bettors will receive 95 per cent of their net winnings, while operators automatically deduct 5 per cent at the point of payout and remit it to the Lagos State Internal Revenue Service (LIRS).
In a notice issued by the Lagos State Lotteries and Gaming Authority (LSLGA), licensed gaming companies were instructed to begin immediate compliance. The tax applies strictly to net winnings, not total stakes.
Operators must:
- Deduct five per cent before releasing payouts
- Remit the funds directly to LIRS
- Maintain proper records of all deductions
The withheld amount may count as a tax credit when players file broader tax returns.
State authorities say the move is designed to improve tax compliance and accountability in Nigeria’s fast-growing betting sector, which has expanded rapidly in recent years.
By collecting the tax at source, the government aims to ensure gaming revenues contribute more consistently to public finances.
The policy also reinforces Know Your Customer (KYC) requirements. Players may be required to provide their National Identification Number (NIN) before receiving payouts, aligning the sector with broader anti-fraud and verification standards.
While officials argue the measure strengthens regulation, some industry players warn that sudden tax enforcement could push bettors toward unregulated platforms that do not deduct taxes.
The development comes amid ongoing national debates over gaming regulation. With no unified federal gaming law in place, states retain authority to regulate betting activities within their jurisdictions.
Lagos says the new tax framework is intended to formalise the sector while ensuring transparency and steady revenue collection.
