Nigerians have rejected the implementation of a 5% withholding tax on gaming payouts by the Lagos State Government.
Chronicle NG reports that the Lagos State Government has announced the implementation of a 5% withholding tax on gaming payouts, requiring licensed betting enterprises throughout the state to begin immediate automatic deductions from customer earnings.
Mr. Are Bashir, the Chief Executive Officer of the Lagos State Lotteries and Gaming Authority, gave the direction in a public notice to licensed gaming platforms, confirming the immediate implementation of the tax system targeting gains made by regulated betting operators.
According to the letter sent on Friday, the state has begun to implement a 5% Withholding Tax (WHT) deduction on gaming profits in accordance with current Nigerian tax laws and regulatory regulations controlling the gaming industry.
The cut will be applied straight to the players’ earnings before payment is processed.
The letter stated that the tax applies to net winnings from licensed gambling platforms operating in Lagos State and will be deducted at the time of payment. All licensed gaming operators have been instructed to immediately comply with the framework.
Under the agreement, betting companies must automatically deduct a part of earnings and pay it to the Lagos State Internal Revenue Service (LIRS), the statutory tax authority.
In reaction to the development, Nigerians, in several comments on social media, condemned the move, with many describing it as unfair and extortion of the masses.
Describing the move as “ridiculous,” popular social media critic Daniel Regha said, “Lagos State imposing a 5% tax on bet winnings is the most ridiculous thing ever; a lot of people gamble with the hope of winning, to make extra money.
“People barely win anything tangible, and the govt is now planning to take a 5% cut? Rather than trying to proffer solutions to help reduce the addiction, the goal is to milk the already indebted or struggling masses. Pathetic.
“Gambling isn’t the way, but this right here is exploitation and taxes that no one sees the results of. Another mistake from the Sanwo-Olu’s govt. What leadership.”
Sharing similar sentiments, Apeyan Moses noted, “And I believe the betting platforms are paying a percent to the government. I don’t understand why they have to tax customers separately—type shit.”
OluMoses Ameh, “Let them increase the tariff tax of the betting company, not the individual. If I lose, who will now compensate me?”
For Chisom Jidenna, he noted that the tax is a clandestine move by the All Progressives Congress to stop youths from gambling.
“This APC government is really a thing. So instead of providing more job opportunities that would direct the youths away from betting, the government wants to profit from it,” he said.
In his reaction, Illias Shaibu stated that “The only people the Lagos State government hasn’t extorted yet are the Almajiris (street beggars).”
For Sunday Oni, he said, ”5% withholding tax on every winning is the government’s strategy for discouraging gambling: if you must gamble, the govt too must earn a cut.”
However, another social media user, Jimmy Carto, applauded the move, saying the “development signals that Lagos is treating gaming as a formal economic pillar, not an informal cash stream.”
He noted that “taxation is not unique to gaming. Every mature economic sector contributes to public revenue.”
Carto’s reaction reads, “There has been a lot of noise around the 5% withholding tax on gaming winnings in Lagos. Let’s approach this from a place of knowledge, not emotion.
“First, this is not a brand-new invention. Withholding tax mechanisms have existed within Nigeria’s tax framework for years. What has changed is enforcement intensity and structured alignment with ongoing tax reforms.
”The directive from the Lagos State Lotteries and Gaming Authority reinforces compliance within a sector that has grown significantly in scale and financial volume.
“Gaming in Lagos State is no longer a fringe activity. It is a major economic ecosystem involving operators, agents, technology providers, marketers, and millions of participants.
“When an industry matures into a multi-billion-naira space, regulatory tightening becomes inevitable. Growth without structure is temporary. Structure is what sustains industries.
“The 5% deduction applies to net winnings and is remitted directly to the Lagos State Internal Revenue Service. It is deducted at the source.
“That model is not unusual globally. Many regulated jurisdictions deduct gaming taxes at the payout level to ensure transparency and accountability.
“The real shift here is formalization. For years, the industry expanded faster than enforcement. Now enforcement is catching up.
“The introduction of stronger KYC requirements, NIN linkage, and automated remittance mechanisms signals a move toward institutional compliance.
Anonymous, loosely monitored participation is gradually being replaced with traceable, accountable systems.
“As someone who has operated within the gaming ecosystem and seen it evolve through expansion phases, crises, and regulatory adjustments, I can say confidently: predictability is healthier for the industry than uncertainty.
“Operators need clarity. Players need transparency. Government needs accountability. Structured deduction, when uniformly applied, provides that predictability.
“It is understandable that any deduction feels uncomfortable to players. But taxation is not unique to gaming.
“Every mature economic sector contributes to public revenue. The question is not whether regulation should exist—it is whether it is applied consistently and transparently.
“This development signals that Lagos is treating gaming as a formal economic pillar, not an informal cash stream. That transition marks the movement from growth-by-expansion to growth-by-structure.
”Industries either institutionalize or destabilize. Formalization may be inconvenient, but it is often the price of longevity.”
