The Lagos State Government has begun enforcing a five per cent withholding tax on winnings from licensed gaming platforms operating within the state, in a move officials say is designed to tighten compliance in one of Nigeria’s fastest-growing industries.
In a public notice issued on Friday, the chief executive of the Lagos State Lotteries and Gaming Authority, Are Bashir, said the policy takes immediate effect and applies to players’ net winnings. The deduction, he added, will be made at the point of payout.
Under the new framework, all licensed gaming operators are required to withhold five per cent of winnings before disbursing funds to players and remit the proceeds directly to the Lagos State Internal Revenue Service, the state’s statutory tax authority.
Bashir said the directive aligns with existing Nigerian tax laws and regulatory guidelines governing the gaming industry. “The measure forms part of Lagos’ broader drive to strengthen tax compliance, transparency, and accountability in the rapidly expanding gaming sector,” the notice stated.
Operators have been formally instructed to implement the deductions without delay. Players, meanwhile, will receive their payouts net of the statutory charge, with licensed platforms responsible for maintaining detailed records of all deductions and remittances.
The authority also said that, in line with Know Your Customer (KYC) requirements, players must provide their National Identification Number as part of the updated compliance regime. The deducted amount, Bashir clarified, will serve as a tax credit for the player.
The move signals a more assertive regulatory posture by Lagos, where digital betting and gaming have surged in popularity amid economic pressures and rising youth unemployment. By shifting enforcement to operators at source, the state hopes to close compliance gaps while bringing both companies and players squarely within its tax net.
