Lagos imposes 5% tax on online gambling winnings in regulatory crackdown

Nigeria's gambling hub just got stricter. Operators must now deduct taxes before paying out—will this slow the industry's explosive growth?

, and Administrator

2026 February 24 . 4:47 AM

1 min read

The image shows a man playing a slot machine with the words "Jackpot" on it. He is surrounded by a... — The image shows a man playing a slot machine with the words "Jackpot" on it. He is surrounded by a board with text and pictures of fruits, suggesting that he is playing online casino games.

Lagos imposes 5% tax on online gambling winnings in regulatory crackdown

Lagos State has introduced a new tax on online gambling winnings, marking a significant shift for Nigeria's growing iGaming industry. The Lagos State Lotteries and Gaming Authority (LSLGA) will now withhold five percent of net winnings from all licensed platforms, regardless of where players live.

The new rule took effect immediately, requiring operators to deduct the 'news' before paying out winnings. These funds will then be sent directly to the Lagos State Internal Revenue Service. The move follows existing federal laws, including the National Lottery Act of 2005 and the National Lottery Regulations of 2007, which already govern gambling activities.

All gaming companies must be registered with the Corporate Affairs Commission (CAC) and hold a valid licence from the LSLGA. Lagos, as Nigeria's commercial centre, plays a key role in the country's gambling sector and often tests new regulations before wider adoption. The policy aims to improve tax compliance, transparency, and accountability in an industry that has expanded rapidly in recent years.

Nigeria's iGaming boom has been fuelled by online platforms and rising participation, particularly among younger players. The 'turbotax' aligns with similar measures in other African countries. Kenya, for example, imposes a five percent tax on withdrawals and another five percent on deposits, while South Africa has proposed a 20 percent withholding tax to reduce gambling activity.

The five percent withholding tax applies to all licensed platforms operating in Lagos. Operators must now ensure compliance by deducting the tax at the point of payout. The change reflects broader efforts to regulate and generate revenue from Nigeria's fast-growing online gambling market.