The Supreme Court Decision on the National Lottery Act: Implications for Betting Businesses in Nigeria

By P. D. PIUS & ASSOCIATES

On November 24, 2024, the Supreme Court of Nigeria delivered a landmark judgment nullifying the National Lottery Act of 2005. This decision has far-reaching implications for betting and gaming businesses some of which include; 1xbet, Bet9ja, Livescorebet, Sportybet etc, operating in Nigeria, particularly in Lagos, Abuja, and Taraba State.

Key Elements of the Judgment

The apex court ruled that the National Assembly lacked the constitutional authority to legislate on matters relating to lotteries and games of chance, which fall exclusively under the jurisdiction of state Houses of Assembly. This ruling effectively decentralizes the regulation of lottery and gaming activities, limiting the National Assembly’s legislative reach to the Federal Capital Territory (FCT).

Impact on Betting Businesses in Lagos

Lagos State has historically been a frontrunner in regulating betting and gaming businesses through its Lagos State Lotteries and Gaming Authority Law. With the Supreme Court’s decision, Lagos now holds exclusive rights to legislate and enforce regulations within its territory.

For betting operators, this means that compliance with Lagos State laws is paramount. The state government is likely to intensify enforcement of its regulatory framework, which includes licensing, tax obligations, and operational guidelines. Operators currently relying on the now-invalid National Lottery Act must align their practices with Lagos State laws or risk penalties.

Impact on Betting Businesses in Abuja (FCT)

The Federal Capital Territory remains under the purview of the National Assembly. Therefore, the National Lottery Regulatory Commission (NLRC) will continue to regulate betting activities in Abuja. Betting businesses operating in Abuja must adhere to the provisions of the National Lottery Act as the Supreme Court upheld its applicability within the FCT.

This creates a unique scenario where betting operators with a national footprint must navigate both federal and state regulatory frameworks, depending on the jurisdiction.

Impact on Betting Businesses in Taraba State

For states like Taraba, which may not yet have comprehensive legislation on lotteries and gaming, the ruling opens the door for the state government to establish its regulatory framework. Until such laws are enacted, there may be a regulatory vacuum, potentially causing uncertainty for operators.

However, this also presents an opportunity for the state to attract investment by creating a business-friendly regulatory environment tailored to its local needs.

Broader Implications

1. Decentralization of Regulation: The decision reinforces the autonomy of state governments in regulating betting and gaming activities, encouraging states to develop localized laws.
2. Operational Fragmentation: Betting businesses must now navigate a patchwork of state-specific laws, which may increase operational costs and complexities for operators with multi-state operations.
3. Taxation: States may now independently impose taxes and fees on betting businesses, potentially leading to increased costs for operators and, ultimately, consumers.
4. Legal Uncertainty: States without established regulatory frameworks may face a temporary vacuum, leaving businesses uncertain about compliance requirements.

Conclusion

The Supreme Court’s decision underscores the importance of federalism in Nigeria’s legal and regulatory landscape. Betting operators must reassess their compliance strategies to align with state-specific laws. For businesses in Lagos, Abuja, and Taraba, understanding the local regulatory environment is now a matter of survival.

Moving forward, state governments should seize this opportunity to enact robust and clear legislation to foster a thriving, well-regulated betting industry that balances revenue generation with consumer protection. Meanwhile, businesses must remain vigilant and adaptable to the evolving regulatory landscape.

P. D. Pius & Associates , Abuja, Nigeria : contact@pdpiusandassociates.com

References

1. Supreme Court Judgment: Attorney General of Lagos State & Others v. Attorney General of the Federation (2024).
2. National Lottery Act, 2005.
3. Lagos State Lotteries and Gaming Authority Law.
4. Ikechukwu Nnochiri, “Supreme Court voids National Lottery Act,” Vanguard, November 22, 2024.
5. 1999 Constitution of the Federal Republic of Nigeria (as amended).
6. .