The Lagos State Government has begun deducting 5% from every sports betting win placed on licensed gaming platforms operating in the state. The withholding tax is deducted automatically before players receive their payouts.
The Lagos State Lotteries and Gaming Authority announced this rule in a public notice signed by CEO Are Bashir, instructing all licensed betting operators to implement the deduction immediately.
Players are also required to provide their National Identification Number to meet know-your-customer (KYC) requirements before withdrawing winnings.
The 5% is sent directly to the Lagos State Internal Revenue Service as withholding tax, meaning it’s deducted at source before money hits a player’s account. So if you win ₦100,000 on a sports bet, the platform automatically removes ₦5,000 and sends it to LIRS, leaving you with ₦95,000.
Why the Lagos State government is doing this now
The state government states that the tax is part of a broader initiative to enhance tax compliance, transparency, and accountability in Lagos’ rapidly expanding gaming sector.
Sports betting has experienced significant growth in Nigeria over the past decade, with platforms such as Bet9ja, SportyBet, 1xBet, NairaBet, and BetKing collectively processing billions of wagers annually.
Previously, Lagos winnings largely went untaxed due to a lack of reporting. By requiring operators to deduct taxes before payouts, the government now secures revenue collection without depending on voluntary declarations from bettors.
The NIN requirement serves two purposes: it helps the state track who’s winning what, and it creates a paper trail for tax purposes. The withholding tax also counts as a tax credit, meaning if you file taxes at the end of the year, you can claim that 5% back as a deduction against other income, though in practice, most casual bettors won’t bother filing.
What this changes for bettors and licensed gaming platforms
For players, the rule is simple: with each win, your payout decreases by 5%. If you’re betting on licensed platforms operating legally in Lagos, there’s no way to avoid this reduction. Unlicensed or offshore platforms may not follow this rule, but using them brings their own set of risks, such as frozen accounts and withdrawal issues.
For betting operators like Sportybet and Bet9ja, compliance is mandatory and immediate. The gaming authority has directed all licensed platforms to start deducting the tax immediately, which means companies will need to update their payout systems to automatically calculate and remit the 5% to LIRS.
The move follows similar efforts by other Nigerian states to tap into gaming revenue. Sports betting is a massive industry in Nigeria, and state governments are increasingly viewing it as a viable tax base, especially as younger populations bet heavily on football, basketball, and other sports.
