Saturday, 30th September 2023

Impact of online gambling in the Nigerian Economy

Nigeria is one of Africa’s economic leaders, and the continent’s financial state depends, significantly, on what happens in Naija. Over the last several years, the country’s economy has been rapidly growing, marking an impressive annual average growth rate of 7%. With an estimated 60 million Nigerians actively betting on sports, it is no wonder that…

Nigerian gambling industry

Nigeria is one of Africa’s economic leaders, and the continent’s financial state depends, significantly, on what happens in Naija. Over the last several years, the country’s economy has been rapidly growing, marking an impressive annual average growth rate of 7%. With an estimated 60 million Nigerians actively betting on sports, it is no wonder that those in the gambling industry believe that the West African Nation has the potential to become the continent’s largest online betting market.

Gambling is both legal and illegal in Nigeria, depending on the type. Many agree that there is a need for new laws, as currently, there is a lack of stringent regulation and weak enforcement of applicable legislation. Since there are no specific laws about online gambling, except the National Lottery Act of 2005, in theory, legislation that pertains to land-based wagering should also apply to the digital sphere. That said, in December of 2019, the state of Lagos began granting licenses for online sports betting, and Nigerians have been playing at offshore online casinos for decades without fear of prosecution.  Online betting platform

For a long time, the Nigerian offline sports betting and gaming industry has seen steady growth year-to-year. However, its digital counterpart has only managed to shine in the past decade due to population growth, widespread internet access, and the availability of devices such as smartphones, tablets, and laptops at affordable prices. On account of these same reasons, economists suggest that, in the coming years, online gambling revenues will also increase in most countries, producing a positive impact on the economy thanks to new jobs and tax revenue that usually goes to public health or education.

A BtoBet report from September of 2020 mentions that sports betting has emerged as a crucial industry, leveraging Nigeria’s huge football culture, with leagues, such as the Spanish La Liga and the English Premiership, having millions of fans in the country.

Top accounting and auditing firm, PricewaterhouseCoopers, in 2018, reported that Nigeria was the second-largest online betting market in Africa, with gross gaming revenues of $58 million for that year.

South Africa is still the continent’s top market, with a total gambling industry GGR of around $2 billion and 54% internet penetration. Even though online gambling is technically illegal in South Africa, companies can offer online betting services if they obtain a local license. In Nigeria, regardless of international accreditation, operators still need local approval to operate in the Nigerian marketplace.  Online betting platform

According to some analysis, the Nigerian population spends around $5,5 million per day on sports betting, with the average wager falling between $7 and $8. Some speculate that the annual betting turnover could be around $1.9 – $2 billion. For comparison, the gross gambling yield (GGY) in Great Britain was $19 billion in 2018, with over 36.6 million online accounts at UKGC licensed sites contributing to this number.

In the US, online poker and casino games alone managed to bring an incredible $402 million through April, May, and June of 2020, a record. Projections say that the US online gambling market will grow by a compound annual rate of 15.41% from 2020 to 2025.

PricewaterhouseCoopers predicts that Nigeria’s gross gambling revenues should grow by 16% until 2023, and after that year by an even higher percentage. Gaming tax rates in the country apply uniformly to both land-based venues and websites, and the federal rate is 20% of all gross gaming revenue. In the state of Lagos, it is 2.5%. The government decides where the accumulated funds go. No information is publicly available that may offer hints to what specific programs or budgets these funds get allocated to and who benefits.

No one can dispute that gambling creates jobs. According to a report from the American Gaming Association, the over 1,000 casinos across 40 US states directly create over 750,000 jobs. Las Vegas alone employs more than 400,000 people in its many gaming venues. Macau has a population of 631,000, and close to 10% of Macau residents work in the administrative region’s gambling industry.

These stats do not factor in employment in the hospitality sector, which sees tremendous benefits from gaming, and the same applies to the travel industry. Thus, such numbers are more than double if we were to factor in the indirectly created employment opportunities.

When it comes to the digital side of things, gambling creates employment in the IT-sphere, where operators hire local talent with programming, design, hardware, and computer networking skills. Furthermore, gaming websites need 24/7 customer support, so operators also employ non-tech people to assist bettors with any potential issues regarding their services. People savvy in digital marketing are also required. Their job is to entice players to register and bet on these sites through social media campaigns.

Sadly, Nigeria has only three land-based casinos and a handful of reputable sports betting platforms, so the country has just scratched the surface regarding gaming employment.

Social Impact
Though many Nigerians view wagering on sports and games of chance as a harmless leisure activity, a 2017 poll found that 36% of adult responders like to gamble, and more than half of them do so every day. Thus, even though now the activity is far more accepted than before, some argue that it can cause mental health problems and lead to substance misuse. Illegal betting is also super-popular in the country, especially wagering on football matches. The precise scale of this criminal activity remains unknown and requires in-depth research.

In 2020, around 21.7 million Nigerians were jobless, and the youth unemployment rate was 14%. A study that examined gambling in Lagos State showed that young people are very interested in the activity. They view it as a way to sustain their needed daily income and meet their spending needs.

As far as we can tell, there are few Gamblers Anonymous-like meetings taking place anywhere in Nigeria, and no specialist centers that treat problem gamblers exist. Awareness regarding these problems remains limited among both the public and healthcare professionals. Estimates say that the rate of problem gambling falls within a range of 1% to 8% of players, and those afflicted are likely to go undiagnosed and untreated. However, international gambling hotlines exits, and so do help websites that provide useful information and offer consoling services.

When people think of Nigeria, gambling is not the first thing that pops to mind. Nonetheless, its industry is swiftly growing, and its population likes to partake in the activity. Sports betting leads the way, as polls suggest that more than 70% of young people are fanatic about the sport and that the average Nigerian bettor spends around $15 a day wagering on it. You can find betting shops all over Lagos, but in recent times, due to the affordability of new tech and internet access, online gambling has been making waves. While the economic impact has been significant, the government has to set new regulations to make gambling more profitable for the country and rake in the max potential tax benefits while allowing operators to create new jobs.

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