Online bettors in Lagos to pay 5% tax on net gains

Lagos State has introduced an immediate five per cent withholding tax on online betting winnings, a move aimed at boosting tax compliance but raising concerns about policy instability in the gaming sector.

Online bettors in Lagos State will now be subject to a five per cent withholding tax on their net winnings following a new directive issued by the Lagos State Lotteries and Gaming Authority (LSLGA). The Chief Executive Officer of the LSLGA, Bashir Are, announced the measure in a public notice on Thursday, stating that the deduction applies to net winnings from all Lagos-licensed gaming platforms and takes immediate effect. According to the directive, the tax will be automatically deducted at the point of payout and remitted directly to the Lagos State Internal Revenue Service (LIRS).

The regulator said the move is in line with the state government’s broader fiscal objectives. “According to the State Government, the measure forms part of Lagos’ broader drive to strengthen tax compliance, transparency, and accountability in the rapidly expanding gaming sector,” the notice stated. The directive signals increased oversight in one of Africa’s fastest-growing betting markets, where online platforms have recorded significant growth in recent years.

However, the development comes amid wider concerns about tax policy instability across African gaming markets. In December, Africa iGaming Alliance CEO Peter Kesitilwe warned that tax “volatility” posed a major compliance challenge for operators in 2025, cautioning that abrupt policy shifts could push bettors toward unregulated platforms. “These abrupt changes often distort price competitiveness and accelerate the migration of customers to unregulated platforms,” Kesitilwe said, as industry stakeholders argue that unpredictable tax regimes could weaken licensed operators and dampen investor confidence.

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