Sports Betting, Casinos: To Ban or Not to Ban?
In recent months, lawmakers in the House of Representatives have been putting motions forward to scrutinise and bolster the legislation governing the sports betting sector. Propelled by Hon. Kelechi Nwogu, although initially misinterpreted as advocating for a sector ban, clarified that his motion aimed to safeguard all stakeholders in the industry, from gaming operators to punters, writes Iyke Bede
While many agree with the sentiment to fortify the sector with policies addressing concerns such as underage gaming, data protection, and operator integrity, others advocate for a complete ban on all sector activities. Socioeconomic and religious factors predominantly underpin their arguments. One notable critic of the sector, Reno Omokri, a former presidential aide and social media influencer, penned a detailed post urging the attention of the current president to the industry’s detrimental impact on the economy.
Indeed, it is noteworthy that should a ban on sporting betting activities become the status quo in Nigeria, countries globally have already implemented stringent regulations on the multi-billion-dollar global industry, which has experienced significant growth spurts, particularly in Africa.
In the Middle East, the United Arab Emirates and Qatar prohibit all forms of gambling, including sports betting, under Islamic law. Brunei has strict laws against it, while it is illegal in North Korea. In Africa, Somalia and Libya have taken steps to prohibit all forms of gambling.
For more perspective, the sports betting industry is not a standalone unit. It relies on other sectors such as entertainment, sports, technology, finance, media and broadcasting, and data and analytics to function, indirectly contributing jobs and revenue to these individual sectors.
In terms of revenue generation, the sector is projected to reach $45.94 billion this year, with continuous growth reflected in a cumulative annual growth rate (CAGR) [2024 – 2029] of 7.41 per cent to reach a size of $65.68 billion by 2029. In Nigeria, 2024 projections reveal a market revenue of $294.2 million and are expected to sustain a CAGR of 6.45 per cent to reach a revenue of $402.2 million by 2029.
According to 2019 research by NOI Polls, over 60 million punters generate at least N2 billion daily. Given the sector’s expected growth, this figure must have increased significantly over the years.
With such growth, there is a tendency to flout rules. Increasingly, investors inundate the market with diverse products and incentives to attract and keep a customer base, sometimes disregarding established laws or exploiting existing loopholes. Frequently, the physical establishments where punters go to place bets fail to comply with regulations explicitly outlined by regulators, all in pursuit of higher profits. Despite routine inspections by regulators and operators on gaming agents, laws continue to be violated.
This is exacerbated by the escalating unemployment rates and the astronomical surge in the cost of living, driving low-income earners to wager their entire earnings in hopes of striking it rich. It also does not help that the entry level to a stake is low, often tempting potential bettors as a means to change their fate.
While operators actively discourage punters from such reckless behaviour, the ultimate decision rests with the punters themselves. While online platforms can mitigate this through persistent reminders to gamble responsibly or implement transaction limits, offline channels lack these safeguards. This, coupled with underage gaming, forms the basis of the grievances against sports betting, which is intended for entertainment with discretionary income. Here, more advocacy is needed.
On the other hand, operators often lament how regulators prioritise revenue collection over providing incentives or innovative programmes for their platforms, with some regulators concurring that the innovative technological products of the operators transcend their scope and don’t reflect in their acts. The most common complaint revolves around the double taxation imposed by both state and federal regulators, who have yet to resolve jurisdictional powers conclusively.
Being a highly interdependent sector, its sudden halt will leave shock waves. For instance, the tech sector has continued to witness the layoff of workers. Microsoft shed around 200 jobs this year alone from its African Development Centre (ADC) in Nigeria. Similar reports reveal TikTok, the online video-sharing app, has also laid off workers globally. These layoffs paint the ongoing trends in the tech sector since 2023. A subsequent ban on the sports betting sector would ultimately translate to more layoffs due to dependency on running software programmes.
The pressing question persists: Will a prohibition effectively address the prevailing gambling concerns? Not quite. Instead, it risks plunging the sector into an unmonitored, clandestine offline market, depriving the government of potential revenue streams.
Under a regulated system, the government generates revenue by issuing licences through the National Lottery Regulatory Commission (NLRC). Also, a certain percentage of the profits realised by operators goes to a trust fund. In Nigeria, the National Lottery Trust Fund (NLTF) ensures these funds are channelled back to society through projects termed ‘Good Causes’. So far, between 2005 and 2024, the body has received over N22 billion in funding to run projects that cut across education and health, among others. A ban will also result in the dissolving of these bodies, resulting in further unemployment.
Like other sectors of the economy, each one grapples with its unique challenges, necessitating ongoing attention to devise solutions that resonate with modern society. If left unattended, the repercussions will be far-reaching, regardless of whether the sector is closed down.
