Online bettors in Lagos State will now face an immediate five per cent withholding tax on their net winnings, following a new directive issued by the state regulator.

The Chief Executive Officer of the Lagos State Lotteries and Gaming Authority (LSLGA), Bashir Are, announced the measure in a public notice on Thursday.

According to the notice, the five per cent deduction applies to net winnings from all Lagos-licensed gaming platforms and has taken effect immediately. The tax will be automatically deducted at the point of payout and remitted directly to the Lagos State Internal Revenue Service (LIRS).

The LSLGA said the move aligns with the Lagos State Government’s broader fiscal objectives.

“According to the State Government, the measure forms part of Lagos’ broader drive to strengthen tax compliance, transparency, and accountability in the rapidly expanding gaming sector,” the notice stated.

The directive signals a tightening of oversight in one of Africa’s fastest-growing betting markets, where online platforms have witnessed significant user growth in recent years.

The development comes amid wider concerns about tax policy instability across African gaming markets.

In December, Africa iGaming Alliance CEO Peter Kesitilwe warned that tax “volatility” posed the biggest compliance challenge for operators in 2025.

He cautioned that abrupt policy shifts — including sudden increases in withholding taxes, turnover-based taxation models, and the introduction of new levies — risk driving bettors toward unregulated platforms.

“These abrupt changes often distort price competitiveness and accelerate the migration of customers to unregulated platforms,” Kesitilwe said.

Industry stakeholders argue that unpredictable tax regimes can undermine licensed operators, particularly in price-sensitive markets, and weaken investor confidence.

The Lagos decision also comes against the backdrop of unresolved regulatory tensions between federal and state authorities.

In December, President Bola Ahmed Tinubu declined assent to the proposed Central Gaming Bill, which sought to consolidate gambling oversight under a single national regulatory commission.

The rejection effectively preserved the constitutional powers of states to regulate gaming activities within their jurisdictions.

Speaking earlier this year at an industry forum in Barcelona, Are maintained that the responsibility for creating an attractive regulatory environment now rests squarely with state regulators.

“The Central Gaming Bill is dead,” he said at the time, adding that Lagos would model its framework on jurisdictions with federal systems such as Germany, Canada, and the United States.

He also emphasised the LSLGA’s commitment to transparency and operator support, noting that Lagos aims to provide a conducive business environment while ensuring regulatory compliance.

The introduction of the five per cent withholding tax, however, will test the balance between revenue mobilisation and market competitiveness in Nigeria’s largest gaming hub. (Nigerian Tribune)