Nigeria’s Lagos State Implements New Tax on Gambling Winnings

In December 2025, Nigeria's President Bola Ahmed Tinubu declined to sign the new Central Gaming Bill, which aimed to consolidate the regulatory authority under the umbrella of a single national commission.

This rejection means that states retain the authority to regulate gambling rather than the federal government. Interestingly, it didn't take long for Lagos State to take the next momentous step, the decision to introduce a new tax, with immediate effect.

New Tax Introduced for Lagos

Players in Lagos are now getting slightly less when celebrating their wins, following the introduction of a new 5% withholding tax (WHT) on all gambling payouts in the state.

Introduced by the Lagos State Lotteries and Gaming Authority (LSLGA) in February, it applies to all licensed betting and gaming platforms in the state. Operators are required to deduct the levy before any winnings are paid out.

The deducted funds are then sent directly to the Lagos State Internal Revenue Service (LIRS), streamlining the process from both an administrative and regulatory viewpoint.  

Simply put, what you see in your account is what's left after the tax has been deducted. The player’s stake is returned intact, and then the net winnings are subjected to the 5% penalty (best described as a “gambling gains tax”).

Why Implement a Tax on Winnings?

LSLGA officials say that the decision is about state coffers also benefiting financially from the rapid growth of Nigeria's betting industry, particularly online platforms, which have expanded quickly over the last few years.

With more consumers placing bets digitally, regulators are looking to tighten oversight and make sure the sector contributes more consistently to state revenue. Collecting the tax on winnings at the source is seen as a more reliable way to do so while also reducing the chances of underreporting.

Tax Implications for Players and Operators?

For players, the change is small but noticeable. In some cases, consumers may be required to provide identification details such as their National Identification Number (NIN) as part of a verification process. 

Operators, on the other hand, are required to take more responsibility. They must make sure taxes are correctly calculated, maintain records, and return all relevant remittances.

A Growing Trend Across Africa

Lagos is not alone in what is a growing trend in Africa. Kenya introduced a 5% withholding tax on all withdrawals from online betting and gaming wallets in October 2025, replacing a higher levy on net winnings.

Although 5% is a relatively small fee, there is still some concern within the industry. Some observers warn that even modest taxes could encourage the shift to unregulated or offshore platforms with limited oversight.

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