The Lagos State Government has ordered all licensed betting companies in the state to immediately deduct a five per cent withholding tax from players’ winnings, a measure expected to boost transparency and compliance in the gaming sector.
The Chief Executive Officer of the Lagos State Lotteries and Gaming Authority (LSLGA), Mr. Are Bashir, confirmed the directive in a notice made available to ENigeria Newspaper, explaining that the tax applies to net winnings and must be automatically deducted by operators before funds are credited to players’ accounts. The deducted amounts will then be remitted to the Lagos State Internal Revenue Service (LIRS), the statutory tax authority.
Bashir emphasised that the initiative is part of Lagos’ broader drive to strengthen tax compliance, transparency, and accountability in the rapidly expanding gaming industry.
“The measure forms part of Lagos’ broader drive to strengthen tax compliance, transparency, and accountability in the rapidly expanding gaming sector.
“All licensed gaming operators in Lagos State have now been formally directed to commence the deductions with immediate effect,” he said.
Under the new arrangement, players are required to provide their National Identification Number (NIN) in line with Know Your Customer (KYC) regulations. Bashir assured that all deductions and remittances would be handled strictly by licensed operators and properly documented for transparency, with the withholding tax serving as a credit for players when filing their annual taxes.
ENigeria Newspaper gathered that the measure is expected to have multiple impacts on the gaming ecosystem. Players will receive five per cent less than their net winnings at pay-out, while operators must upgrade systems to automate calculation, deduction, and remittance processes. The policy is also seen as a way to reduce tax evasion and enhance transparency in the sector.
This move reinforces Lagos State’s ongoing effort to tighten regulation and formalise revenue collection in the gaming sector. In October 2023, the LSLGA warned residents against patronising unlicensed gaming companies and issued banning orders against operators offering gambling services without proper authorisation.
The Authority stated that operating without a licence breaches Section 33(3) of the Lagos State Lotteries and Gaming Authority Law 2021 and reaffirmed its commitment to enforcing compliance across the sector.
Bashir reiterated that the new withholding tax policy is aligned with Nigerian tax laws and regulatory directives governing the gaming industry, and that all licensed operators are expected to comply immediately.
