Nigeria has greenlit a new business programme allowing non-domiciled operators to secure five-year permits to offer online gambling and sports betting.
The project is led by the National Lottery Regulatory Commission of Nigeria, which will oversee the AML screening and fit-and-proper due diligence of applicants seeking permits.
Valid for a period of five years, the Lottery Commission will charge an initial $100,000 for operators to secure permits, followed by subsequent fees of $50,000 for each year the permit is active.
Holders of a “Nigerian Remote Operator Permit” will be allowed to offer casino games, bingo, slots, sports betting, and poker whilst being exempt from “any requirement to set up a local subsidiary”.
However, the permit holders must register a ‘Non-Residence Business Request’ with the Federal Inland Revenue Service of Nigeria (FIRS).
Approved applicants must ensure that their Nigerian payment services are tracked and settled by a new tax collection system, which will be used by FIRS and the Lottery Commission to monitor the market’s AML duties.
The tax collection system has been purposely customised by UK fintech E-Technologies Global Limited’s ‘Sentinal’ solution.
The E-Technologies Sentinal System will allow the FIRS to directly collect “gaming duties set at 4.5% of all player deposits” from approved Nigerian payment service providers.
FIRS underscored that “no further taxes will be payable in Nigeria including no corporation tax as RGOs will be non-domiciled”.
“The world is entering a challenging time where there is a strong obligation on Governments to increase tax revenue as a percentage of GDP so as to provide much-needed funding for local infrastructure and public services,” explained Mohammad Nami, Executive Chairman of FIRS.
“We have been very impressed with the Sentinal System which allows us to not only collect tax revenues at source, but also provides us with tax reporting and monitoring tools in real-time. The system will integrate with our own TaxPro Max portal.”
E-Technologies will support FIRS and the Lottery Commission by managing the programme’s application process including conducting necessary KYC/AML checks with the decision on whether to grant or deny remote permits.
The Lottery Commission will manage the regulatory oversight of the permit programme, in which it outlined that “serious failures particularly in regard to responsible gaming and underage gaming” would result in the revocation of permits and businesses being blacklisted.
David Kicks, CEO of E-Technologies Global Limited, said: “We are thrilled that the Nigerian Government has made the decision to integrate our Sentinal System, empowering them to streamline online taxation.
“By understanding better how the payments ecosystem behaves and evolves, we can drive a paradigm shift towards a point of consumption tax methodology.
“This landmark deal will herald a new era in rapidly opening new regulated markets for responsible gaming operators, as grey market operating becomes increasingly problematic.”
In a separate statement, the Lottery Commission clarified that integration to the Sentinal tax system would only be applicable to non-domiciled operators joining the permit programme.
Furthermore, the commission underlined that direct gaming duties on payment providers would not be applied to existing Nigerian gambling businesses.
“We are welcoming all responsible offshore gaming operators to apply for a Remote Operator Permit as long as they pass all the relevant criteria including full AML screening and responsible gaming practices.” – said Lanre Gbajabiamila, Director General of the National Lottery Regulatory Commission of Nigeria.
“We are proud to be the first country to adopt the Sentinal System and we believe it will bring a real national benefit to Nigeria.”