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Gaming remains one of the most lucrative and fastest-growing markets in Nigeria. Over the years, there has been an increasing number of game lovers and enthusiasts, especially among the youthful population, thus resulting in exponential growth in the betting industry. Also, the legalization of gaming activities and sports betting in various climes has increased its popularity globally. With the increase in the growth of the gaming industry and the advancement in technology, the use of remote platforms for gaming has also increased. All this has spurred investment interests both locally and internationally in the industry.
Particularly, in Nigeria, a lot of foreign companies and platforms now seek to provide facilities for gaming to players in Nigeria online or through other means of remote communication. However, for this to be possible, such companies are required to obtain a Remote Gaming License from the designated authority. Providing such facilities without obtaining the required license will amount to committing an offense under the Law.
The authority responsible for Gaming and Lottery operations in Nigeria is The National Lottery Regulation Commission (NLRC) established under the National Lottery Act of 2005 (NLA).[i]
WHAT IS A REMOTE GAMING LICENSE?
The Remote Gaming License in Nigeria is called the Remote Operator Permit. The Remote Operator Permit refers to the Permit issued to Foreign Gaming Companies that allows such companies to legally provide remote gaming services to users in Nigeria without having to establish or incorporate a company in Nigeria or even have a physical presence in Nigeria. The Remote Operator Permit once granted exempts the holder from the mandatory incorporation required for all foreign businesses desiring to carry out operations in Nigeria.
The Remote Operator Permit confers on the holder the right to do the following:
CATEGORIES OF GAMES COVERED BY THE ROP
Operators who successfully obtain the ROP are allowed to offer the following games on their platforms.
APPLICATION PROCESS FOR OBTAINING THE ROP
An operator seeking to obtain a Remote Operator Permit in Nigeria must first ensure that it has obtained a primary license. This means that it must be duly incorporated or registered abroad and have obtained a license there to operate as a gaming company.
The Application and approval process for the Remote Operators Permit is administered by the NLRC-managed service provider, E-Technologies Global Limited (ETG), and remotely through the Sentinal platform. This means that all applications for the ROP must be made via the ETG platform. ETG is a UK-based fintech company and works in conjunction with the NLRC to help modernize the tax collection procedures for online gambling in Nigeria.
When an application is made via the ETG platform, ETG will gather all necessary KYC (Know Your Customer) and AML (Anti-Money Laundering) information from the applicant. The NLRC also oversees the AML screening and conducts due diligence on the applicants.[ii]
The applicant is also furnished with the Permit Terms and Conditions and is expected to adhere strictly to it. This is very important as non-compliance may lead to revocation of the permit. A very significant non-compliance may result in the Operator being blacklisted. These terms and conditions may be amended from time to time as the NLRC deems fit to make sure that it adheres to both global best standards and the changing trends in gaming.
DURATION OF THE ROP
The ROP is valid for five years.
FEES PAYABLE FOR THE ROP
Operators are expected to pay the total sum of $500,000 (Five hundred thousand dollars) for the five-year duration of the permit. The fees can be paid annually with $100,000 per annum.
TAXES AND LEVIES
Holders of the ROP are mandated to pay 4.5% of all player deposits as gaming duties. This is done through ETG’s Payment Gateway called Sentinal. Sentinal is a technology system that instructs integrated providers to deduct taxes at the point of transaction.[iii]
It is important to note that holders of the ROP are exempted from corporate income tax. However, they must register a ‘Non-Residence Business Request’ with the Federal Inland Revenue Service (FIRS).
CONCLUSION
With the rapid growth and ever-increasing popularity of gaming in Nigeria, there is a corresponding increase in demand for gaming platforms. As such, the Remote Operator Permit is a very helpful development in meeting this demand as it helps to ease the entry of foreign-licensed gaming operators into the Nigerian Gaming industry.
[i] CAP C20 LFN 2004
[ii] Ted Menmuir ‘Nigeria to Launch New Permit Programme Safeguarded by E-Technologies Global’ (2022) < https://sbcnews.co.uk/technology/2022/11/01/nigeria-e-technologies/> Accessed 7 December 2023
[iii] Jake Evans ‘Nigeria to Offer Remote Operator License after Striking Tech Deal to Collect Gambling Taxes’ (2022) <https://igamingnext.com/news/nigeria-to-offer-remote-operator-licence/ Accessed 7 December, 2023
Written by Pelumi Adejumo for The Trusted Advisors
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