Nigeria’s Online Gaming And Betting Industry: A Regulatory Guide For Prospective Operators

Nigeria sits at the intersection of a young, tech-driven population and one of Africa's most active sports cultures. The appetite for online gaming and sports betting has grown significantly over the last decade, and with that growth has come a rapidly evolving regulatory landscape that any serious operator must understand before entering the market.

THE EXISTING LICENSE FRAMEWORK

For many years, Nigeria operated a dual-track system where both the federal government and individual states claimed regulatory authority over gaming and betting activities. At the federal level, the National Lottery Regulatory Commission (“NLRC”) issued licenses that operators relied on to run platforms across the country. Alongside this, several states had their own gaming regulators who issued state-specific licenses.

The Lagos State Lotteries and Gaming Authority (“LSLGA”)¹ was established under the Lagos State Lotteries and Gaming Authority Law of 2021, replacing the former Lagos State Lotteries Board and consolidating the regulation of lotteries, betting, casinos, gaming machines, promotional competitions, and related gaming categories within the state. Lagos quickly became the most structured and sophisticated gaming jurisdiction in the country, covering both land-based and online operations.

This dual system created significant tension between federal and state authorities, particularly on the question of which tier of government had the constitutional power to regulate gaming. That tension was resolved decisively in November 2024, when the Supreme Court of Nigeria in AG Lagos State & 22 Ors v. AG Fed & 13 Ors² ruled that gaming regulation falls within the exclusive legislative competence of the states, except in the Federal Capital Territory. The Supreme Court's ruling essentially did away with the national powers and jurisdiction of the NLRC, leaving it wholly subject to the Federal Capital Territory, Abuja. On 14th May 2025, the Federal Capital Territory Administration announced that the FCT Lottery Regulatory Office (FCT-LRO) would commence regulating gaming operations in the FCT, with all licenses or permits previously issued by the NLRC remaining valid and enforceable within the FCT. Operators whose business is conducted outside Abuja can therefore no longer rely on any NLRC or FCT-LRO license as their basis for operating in other states. Each state in which an operator wishes to serve users now requires a separate authorisation, either through that state's own regulator or, more practically, through the URC.

THE STATE-BY-STATE FRAMEWORK

The Supreme Court ruling fundamentally restructured the Nigerian gaming industry by firmly establishing that each state has the right to create and enforce its own gaming regulatory regime. This means that an operator seeking to offer betting or gaming services to users in Lagos must obtain a license from the LSLGA. An operator targeting users in Oyo State must deal with the Oyo State Gaming Board. The Federal Capital Territory has its own FCT Lottery Regulatory Office for operators seeking to serve Abuja-based users.

For states that have built out their own regulatory frameworks, the licensing process involves incorporation within that state's requirements, demonstrating minimum share capital, submitting business plans and technical documentation, passing background and AML/KYC checks, and paying the applicable license fees. The categories of activity regulated by state authorities typically include online sports betting, online casino operations, public online lottery, and promotional competitions.

THE FSGRN UNIFIED FRAMEWORK: 22 STATES, ONE CERTIFICATE

Recognising that a state-by-state approach could create an impractical burden for operators and stifle a growing industry, a coalition of state regulators took collective action and came together to create “THE FEDERATION OF STATE GAMING REGULATORS OF NIGERIA” (“FSGRN”) as a coalition of state-level gaming authorities to harmonize regulation and enable cross-state license recognition, following a landmark November 2024 meeting of these states after the Supreme Court invalidated federal control under the National Lottery Act and the signing of the Subnational Reciprocity Licensing Framework in May 2025; unlike a statutory body, the FSGRN is founded on consensus and a memorandum of understanding among state regulators, with its authority deriving from each member state rather than federal legislation, making it the coordinating and issuing body for collective licensing arrangements. The FSGRN officially signed the Subnational Reciprocity Licensing Framework on 7th May 2025.³ The new framework introduces a single, unified licensing process for operators across member states.

22 states⁴ have established the FSGRN and, under the Subnational Reciprocity Licensing Framework, gaming operators may obtain a single license known as the Universal Reciprocity Certificate (“URC”) valid across all FSGRN member states. This is a significant development for operators because it eliminates the need to file separate applications, pay separate fees, and manage separate compliance obligations in each member state.

The URC covers Online Sports Betting, Online Casino, Public Online Lottery, and Promotional Competitions. The goal is to remove the burden of applying separately to each state, improve regulatory coordination, and create a more stable and investor-friendly operating environment. For investors and founders evaluating market entry, the URC represents the most efficient pathway to a broad Nigerian footprint.

WHAT THE LAW REQUIRES

Under the various state laws and the harmonised FSGRN framework, a gaming or betting activity is broadly defined to include any scheme, arrangement, or platform through which a participant stakes something of value on an uncertain future event in exchange for the chance to receive a prize. The test is one of economic substance: if the underlying transaction involves consideration, uncertainty, and a prize of any value, it will be treated as a regulated gaming activity regardless of how the product is marketed or what terminology is used.

This means that proxy currencies, points systems with redeemable value, and sponsor-funded prize structures that require entry fees all carry regulatory risk. A platform can remain outside the licensing requirement during an MVP or testing phase only if it operates with no paid entry, no prizes of monetary or redeemable value, and no advertising that positions the product as a betting or lottery service. The moment any of those elements is introduced, a license becomes mandatory, and operating without one is a criminal offence in Lagos and other regulated states.

Effective from 1st January 2026, the FSGRN introduced an 11% flat contribution on Gross Gaming Revenue for Good Causes⁵ across all operators, and license fees have been fixed at NGN 100 million per annum for each category of operator covering Lottery, Sports Betting, and Casino. The distinction between online and retail operations has been removed.

LICENSE TENURE AND RENEWAL

Under the FSGRN framework and aligned state regimes, the standard license is issued on an annual basis. Renewal and fee payments are required from 1st January 2026, with regular renewals and license fees applying from that date. Specifically for the Interactive Games and Sports Betting categories under frameworks such as Lagos', the annual renewal fee sits at NGN 50 million, and a monthly gaming tax of 11% of Gross Gaming Revenue applies. A bank guarantee of NGN 50 million is also required to secure player winnings and regulatory stability.

The practical licensing timeline from initial application to final license issuance runs between three and six months. This covers document preparation and submission (typically two to four weeks), the regulator's due diligence review (four to twelve weeks), and an Approval in Principle stage during which operations may be authorised for 90 days under monitoring before the final license is granted.

For operators who already hold a state-level license, the position under the FSGRN framework is unambiguous. All operators previously licensed either by the now-proscribed NLRC or by respective member states are required to apply for the URC through the Secretariat of the FSGRN. Renewing directly under a standalone state license is therefore no longer the appropriate path for operators who wish to remain compliant within the FSGRN framework. The state license does not simply convert into a URC; a fresh application to the FSGRN Secretariat is required.

The good news for existing operators is that the FSGRN acknowledged the disruption caused by the transition and introduced transitional relief measures. Operators previously licensed by the now-defunct NLRC or individual member states were required to apply for the URC through the FSGRN Secretariat, and to support a smooth migration, the FSGRN granted a full waiver of 2025 license fees for eligible operators, with regular renewals and license fees resuming from 1st January 2026. That fee waiver window has now closed, meaning operators yet to migrate are now subject to the full fee schedule and should treat regularisation under the URC as an urgent compliance priority.⁶

Footnotes

1 Section 2(1) of the Lagos State Lotteries and Gaming Authority Law 2021.

2 SC/1/2008

3 FSGRN member states sign Subnational Reciprocity Licensing Framework [https://sigma.world/news/fsgrn-member-states-sign-subnational-reciprocity-licensing-framework/] date accessed 09.06.26

4 1. Lagos State, 2. Ekiti State, 3. Abia State, 4. Akwa Ibom, 5. Anambra State, 6. Bayelsa State, 7. Benue State, 8. Cross River State, 9. Delta State, 10. Ebonyi State, 11. Edo State, 12. Kaduna State, 13. Taraba State, 14. Plateau State, 15. Osun State, 16. Oyo State, 17. Ondo State, 18. Ogun State, 19. Nasarawa State, 20. Enugu State, 21. Imo State, 22. Kogi State.

5 This is a term rooted in Nigerian lottery legislation and refers to designated public benefit purposes to which a portion of gaming revenue is statutorily directed. Under the framework administered by the former NLRC, good cause contributions were channeled toward infrastructure development, education, health, and social welfare projects. The FSGRN has carried forward this concept within its unified framework, requiring that the 11% GGR levy be ring-fenced for equivalent public benefit purposes at the state level, with each member state responsible for the administration and disbursement of its share of those funds.

6 FSGRN Signs Landmark Universal Licensing Agreement; Grants Fee Waiver to NLRC Licensees [https://www.thisdaylive.com/2025/05/15/fsgrn-signs-landmark-universal-licensing-agreement-grants-fee-waiver-to-nlrc-licensees/] date accessed 09.06.26

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