Is the Issuance of Remote Licences Good for the Nigerian Gambling Industry?
Gambling regulators in Nigeria recently announced that they would start issuing remote licences to offshore operators that wish to offer their services to Nigerian players.
This would allow such companies to legally do business in Nigeria without having a physical presence in the country.
Apart from being permitted to legally provide gambling services to Nigerians, these companies would also be able to advertise their products in the print media and via affiliate marketing platforms if they own this remote licence permit.
“We are welcoming all responsible offshore gaming operators to apply for a remote operator permit as long as they pass all the relevant criteria including full AML screening and responsible gaming practices”, said Lanre Gbajabiamila, Director-General of the National Lottery Regulatory Commission.
Based on this new system, any gambling operator that wants the remote permit would have to pay an initial fee of USD 100,000, followed by a sum of USD 50,000 in each of the next four years.
Remote operators would also be mandated to pay tax to the government, via the Sentinel system provided by UK-based company, E-Technologies Global Limited. The Sentinel system allows payment providers to deduct tax at the point of transaction and immediately pass on the money to the national treasury.
All of these look great on first viewing, but is it really the best way to go?
To be fair, the fact that Nigeria is thinking about extracting more revenue from offshore operators is a positive thing.
Because of Nigeria’s vague laws on sports betting, especially online betting, offshore operators have been freely rendering their services to Nigerian customers over the internet without having to pay any form of tax or invest any of their revenue into the country.
They have basically been syphoning money away from Nigeria, further weakening our already dire economy. The remote gambling licence will go a long way in addressing this.
However, not everyone is on board with this new system.
Chief Executive Officer of the Lagos State Lottery and Gaming Authority, Bashir Abiola Are, has not been impressed with the idea.
The Lagos State Gaming chief insists that the federal body does not have the constitutional right to issue betting licences without the consent of the state bodies.
“The state gaming regulators are also against it because we believe it is under our purview constitutionally and you cannot issue remote gaming licences to foreign operators without our consent”, he said.
“Even if you have to do it, you do it on our behalf. We have to give you permission to do it”.
This has further brought to light the on-going feud between the federal regulator- the National Lottery Regulatory Commission- and the state bodies.
Until both parties somehow reach a compromise, there will always be proposals and counter-proposals from both ends without any meaningful resolutions.
Perhaps, Nigeria would be better off emulating the Kenyan system, which has a uniform regulatory body for sports betting all through the country.
While Nigerian bookies may have multiple licences from the federal and state authorities, betting sites in Kenya are all registered with the supreme body- Betting Control and Licensing Board.
Also, Are believes that issuing licences without mandating the operators to have physical presence in the country would be detrimental to the development of the Nigerian gambling industry; and to the country as a whole.
“You are telling them they don’t have to invest locally; that they can just pay some peanuts and make huge amounts of money. There will be capital flight, but no development”, Are said.
“All these companies that you want to grant offshore licences to are not based in Nigeria. What we need is a lot of local content so that we can grow the sector within and we can export. Our people are capable when you give them the platform”, he continued.
Are does make a great point here. By having a physical presence in Nigeria, gambling operators would not just boost the development of the industry in the country, they would also offer other economic benefits such as creating more job opportunities for Nigerian youths.
While the remote licensing system has its positives, it is perhaps better for Nigeria if these international companies are also compelled to have offices and shops in Nigeria before being allowed to legally operate in the country.