Sports betting is witnessing a major boom in Nigeria, with an estimated 60 million Nigerians actively participating and over 50 betting companies operating in the nation. As a result, sports betting is having a huge influence on the economy.
According to research by leading accounting and auditing company PwC, Nigeria has overtaken South Africa as Africa’s second-largest online gambling industry, with a Gross Gaming Revenue of $58 million in 2018. The GGR is expected to increase by 16 percent over the next five years, according to the research.
The country’s population exceeds 200 million, providing enough individuals to keep the betting firms afloat. Nigerians are devoted to their sports, particularly football, and this has translated into a passion for sports betting. The idea that they may generate money while participating in a sport they like is incredibly attractive.
Improved technology has also assisted the increase in sports betting, with more Nigerians now having access to mobile phones and low-cost internet. Unfortunately, the country’s unemployment rate remains high, contributing significantly to the increase in sports betting.
Nigerians wager roughly $5.5 million each day on sports, amounting to a staggering $2 billion per year. According to a study by another accounting company, KPMG, Bet9ja, Nigeria’s largest betting brand, returned a monthly turnover of $10 million in 2016. With an estimated monthly turnover of $3 – $5 million dollars, NairaBet isn’t doing too poorly.
Betting firms have discovered a gold mine in Nigeria and are quickly growing.
With such staggering figures floating about, it’s no surprise that the Nigerian government is trying to tighten tax rules and extract more money from these betting businesses. Until recently, the government has not fully capitalized on Nigeria’s growing sports betting industry, but that may be about to change.
The Federal Inland Revenue Service (FIRS), which is responsible for assessing and collecting taxes in Nigeria, has announced that betting operations will be subject to a 7.5 percent value-added tax (VAT). This essentially implies that bettors will have to pay an additional 7.5 percent on each wager. They will pay an additional N7.50 for every N100 they stake, totaling N107.5.
Unsurprisingly, both the best betting sites in Nigeria and bettors have objected to this idea, claiming that it will discourage individuals from betting and, as a result, reduce income. In February, the Association of Nigerian Bookmakers gathered in Abuja to submit their case, claiming that taxing betting stakes was impractical.
It is critical for all parties concerned to achieve an agreement on betting company taxation and to put these regulations into effect, since the money will go a long way toward improving Nigeria’s ailing economy.
While the tax discussion rages on, it’s important to remember that betting sites in Nigeria have helped the Nigerian economy in a variety of ways.
Thousands of Nigerians currently work for both local and international betting firms, thanks to dramatic growth in the number of betting companies operating in the country.
Betting businesses create jobs not just through hiring Nigerians in their offices, but also by recruiting people to become agents and open physical locations. These restaurants have grown quite popular in Nigeria, and they have given their owners a lucrative source of revenue. The store owners also hire their own staff, who are paid a tiny portion of the sports betting jackpot.
Betting businesses have also benefited the Nigerian economy by developing alliances and negotiating sponsorship deals with a variety of sports and entertainment groups.
The Nigeria Football Federation and the League Management Company have partnered with European bookies 1xBet, while Bet9ja was the title sponsor of the Nigerian National League, the second tier of the Nigerian league system, until early 2019.
Bet9ja also has a multi-million dollar sponsorship contract with Big Brother Naija, a famous reality TV show. Bookmakers have pumped a lot of cash into the Nigerian media, funding a variety of programmes and events on radio and television.
Sports betting in Nigeria is not developing in isolation; rather, it is gaining traction alongside other businesses such as banking, information technology, and telecommunications. These sectors’ interdependence is best defined as symbiotic, with one sector benefiting from the other.
True, improved banking and payment methods, as well as technical progress (more mobile phones, faster internet), have benefited sports betting, but betting has also provided a lot in return.
Bookmakers now have partnerships with banks, payment gateways, and telecommunications firms, resulting in a considerable rise in activity in these areas and, as a result, increased income.
Imagine being charged N50 for each deposit you make using Quickteller or online banking, or being charged N30 each time you fund your account using the mobile USSD service. Consider the millions of dollars that are deposited into betting accounts every day. We’re talking about a significant sum of money.
There were 29 million online payments totaling N132 billion in 2017, according to the Nigeria Inter-Bank Settlement System (NIBSS).
The impact of sports betting on the economy will continue to increase at a breakneck pace. Hopefully, the government and businesses can come to a mutually beneficial tax agreement. The government requires some of that money, but it must be careful not to pass rules that stifle the expansion of businesses that are legitimately functioning in the nation.
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