Lagos Cracks Down on Unlicensed Mobile Betting, Orders Telecoms to Comply in 30 Days

Nseobong Okon-Ekong reports that the directive could affect how consumers access gaming services through USSD, SMS, mobile applications and carrier billing, as the regulator moves to enforce licensing and tax compliance across the sector.

Consumers using mobile phones to access betting, lottery and gaming services in Lagos State could see unlicensed platforms suspended as the state gaming regulator gives telecommunications operators and value-added service providers 30 days to verify operators’ licences, disclose transaction records and support the recovery of outstanding gaming taxes.

In a public notice, the Lagos State Lotteries and Gaming Authority (LSLGA) directed mobile network operators, telecommunications companies and VAS aggregators to stop onboarding gaming businesses without valid state authorisation and to suspend existing services operating without the required approval.

Under the notice, affected intermediaries must verify that gaming operators using their platforms possess valid licences or authorisations issued or recognised by the LSLGA. They are also required to stop onboarding unlicensed operators and suspend existing gaming services that lack the necessary approval.

The LSLGA said the directive was issued pursuant to the Lagos State Lotteries and Gaming Authority Law 2021, which empowers it to regulate and control lottery and gaming activities in the state.

Clarifying the distinction between telecommunications licensing and gaming regulation, the LSLGA stated that licences, authorisations or approvals issued by the Nigerian Communications Commission (NCC) for telecommunications or VAS activities do not constitute permission to conduct or facilitate gaming operations in Lagos.

It restated that using a telecommunications operator, VAS aggregator, payment channel, carrier-billing platform or other technological intermediary does not remove the obligation to obtain the appropriate gaming licence.

The notice also invokes the Supreme Court judgment delivered on November 22, 2024, in Attorney-General of Lagos State & Ors. v. Attorney General of the Federation & Ors., Suit No. SC/1/2008.

According to the LSLGA, the judgment affirmed that lottery and games of chance fall within the residual legislative competence of states, subject to the applicable constitutional position concerning the Federal Capital Territory.

Consequently, gaming services offered to, accessible by or conducted in relation to customers in Lagos must comply with the state’s licensing requirements, irrespective of the telecommunications channel through which they are delivered.

A major component of the directive is the recovery of outstanding fiscal obligations from operators that provided gaming services through telecommunications or VAS platforms during the period beginning November 22, 2024, and ending on the date of the notice.

The LSLGA said affected operators must account for and remit all gaming taxes, statutory levies, Good Causes Levy and other applicable payments due under the law and relevant regulations.

Outstanding liabilities will be assessed using verified transaction and revenue data, with applicable penalties and interest added where required. Operators must regularise their licensing status and settle assessed arrears within the stipulated compliance period.

To facilitate the exercise, telecommunications operators and VAS providers must supply transaction records, carrier-billing information and revenue-sharing data relating to gaming operators and services hosted on their platforms during the period under review.

The LSLGA said the information would enable it to verify compliance and determine outstanding liabilities. The notice also warns of potential legal consequences for operators and individuals involved in facilitating unlicensed gaming activities.

Section 33(3) of the Lagos State Lotteries and Gaming Authority Law prohibits persons without subsisting licences or authorisations from operating gaming activities, managing or accepting wagers, deploying equipment, renting property, employing personnel or advertising gaming activities in Lagos.

The regulator also drew attention to Section 101(5), which provides that where an offence committed by a company is attributable to the consent, connivance, or neglect of a director, manager, secretary, or other principal officer, the individual and the company may both be held liable.

Directors and principal officers of telecommunications companies, VAS aggregators, VAS providers and other intermediaries were therefore urged to exercise due diligence and ensure their platforms are not knowingly or negligently used to facilitate unlawful gaming.

The LSLGA warned that enforcement action would follow the expiration of the 30-day compliance period where unlicensed operators or entities facilitating their activities are identified. Such action would include appropriate statutory notices and other regulatory measures available under the law.