Lagos Gaming Winnings Tax: State mandates 5% withholding on payouts from licensed platforms to improve compliance and transparency

The Lagos State Lotteries and Gaming Authority has begun enforcing a five per cent withholding tax on gaming winnings from licensed platforms operating within Lagos State, effective immediately.

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Chief Executive Officer of the authority, Are Bashir, announced the new policy in a public notice issued on Friday. The tax will apply to players’ net winnings and will be automatically deducted at the point of payout by all licensed gaming operators.

According to Are Bashir, the withheld amounts will be remitted to the Lagos State Internal Revenue Service, the statutory tax authority, in accordance with existing Nigerian tax laws and regulatory directives for the gaming sector.

“The measure forms part of Lagos’ broader drive to strengthen tax compliance, transparency, and accountability in the rapidly expanding gaming sector,” the notice stated.

Under the new framework, players are required to provide their National Identification Number (NIN) in line with Know Your Customer (KYC) regulations.

Are Bashir emphasised that licensed gaming operators are responsible for all deductions and remittances, ensuring that players receive their winnings net of the statutory deduction with proper records maintained for transparency.

The withholding tax deducted will serve as a tax credit for players, reinforcing alignment with state tax obligations while supporting regulation of the industry.

All licensed operators in Lagos State have been formally directed to implement the deductions immediately.

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The initiative reflects the state government’s ongoing efforts to enhance regulatory oversight and fiscal accountability in the fast-growing gaming sector.