Sports betting has become an evolving but significant sector in the Nigerian gambling market. In the last decade, the sector has grown quite fundamentally, which can be attributed to the advent of modern technology, high unemployment level among the youths and the buzz around European league and other sporting events.
However, this has not always been the case. At the inception of the gaming industry in Nigeria, Sportsbetting and other online games were not envisaged as part of the industry. It was all about Lotto, which was viewed as a safer form of gaming. This view can be ascribed to why the then sole operator, National law, and the agency guiding the activities of the industry was aptly named; National Sports Lottery, National Lottery Regulatory Commission and the National Lottery Act.
Fast forward to recent times and Sport betting and other forms of online gaming like igaming, mobile gaming and online casino, has exploded in the Nigerian gaming market. The law makers in the country is now seeking to amend the law and change the name of the regulatory agency to, National Gaming Regulatory Commission and the Act to National Gaming Act; in order to accommodate sportsbetting and other forms of gaming.
The Sportsbetting sector, based on reports and statistics, is estimated to generate over N700 billion annually. In 2020, statistics showed that over 60 million Nigerians between the ages of 18-40 are actively involved in sports betting, which can be deemed as a substantial amount of gambling amongst the youths.
All these growth and expansion has presented both opportunities and problems for the business lawyers in gaming law and practice, as amidst the legalization and the rapid expansion of this sector, lies several implications for data protection, cybersecurity, privacy rights of consumers, child protection and responsible gaming, and with the advent of novel products like crypto currency and blockchain technology intertwining with gambling, the concerns have become more pronounced.
Data security is a key issue for the gaming industry, because as more people participate in mobile sports betting and other online games, more player personal identification information is being shared across different platforms and this raises serious concerns for data breaches. Also, the reliance of the operators on computer systems for the operation of their devices, floor security, storage of player data etc. makes them vulnerable to hackers and other cyber-attacks.
The implications for consumer data security cannot be over emphasized, as immense amount of financial and personal information are collected from consumers, bettors are often required to create accounts with financial and banking information that have passwords and security questions and hackers target these companies either for the theft of betted money in wallets or for confidential account data; a violation which will affect both the players and the operators alike.
Other Areas of Concern
Implications for child protection is another area of concern, it is hard to adequately determine the age of people that bet in Nigeria and so the concept that it is only 18+ that play bet cannot be substantiated. There is no standard level of identification, which means that young people who are statutorily illegal are getting pulled into placing bets, especially with the quest for easy money. The advent of technology now makes it easy to just place bets on your mobiles, deposit money to the betting wallets and link your cards to it without hassles.
The issue of safer gambling has also become a major concern especially with the influx of mobile/online gaming. The lack of control or visible regulation in this area, means that people can bet above their income levels, enamored with unsolicited gaming products and information, become susceptible to addiction and no protection for the vulnerable and minimal recourse to redress.
Available Laws/Regulations & Agencies Applicable to Online Gaming in Nigeria
Thus far, there is no law in Nigeria that adequately and exclusively addresses these concerns as it pertains to the gambling industry, especially in the online gaming sector. However, there are some laws and regulations found in some other related legislation that can be applicable.
Section 37 of the 1999 Constitution is a vital provision, as it guarantees protection for the privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications.
The Nigerian Information Technology Development Agency (NITDA) also provided regulation in their 2019 ‘Nigerian Data Protection Regulation’ (NDPR); (modelled after the EU GDPR; though not specific to the gaming industry like the Consumer Protection Framework 2016, was to financial institutions; but it comprehensively addressed issues relating to data). Pt. 2, Sec 2 NDPR, provided for the management and usage of data in Nigeria. It outlined rights of data subjects, duties of data controllers and processors and the transfer of data to foreign country etc. It also provided for penalty for default.
Freedom of Information Act, 2019. Sec 14 of FIA prohibits public entities from disclosing information containing personal information in their possession, unless with the consent of the data subject or the information in question, is publicly available.
The Cybercrime (Prevention, Prohibition, Punishment) Act 2015, requires everyone in possession of a person’s personal data, to properly safeguard such data and criminalizes violation of such data privacy.
Nigerian Financial Intelligence Unit (NFIU), is the central national agency responsible for the receipt of disclosures from reporting organizations. It provides and regulates the country’s Anti-Money Laundering, Counter-Terrorist Financing and Counter-Proliferation Financing (AML/CFT/CPF) framework. The autonomous unit is domiciled within the Central Bank of Nigeria (CBN).
The Economic and Financial Crimes Commission (EFCC) created to fight fraud in the country, is also another agency directly linked to the gaming industry, as they strive to combat tax related fraud.
To better protect the consumers from fraud and harm, gaming operators are required to comply with regulations in areas like Anti- Money laundering (AML), fraud prevention, Intellectual property, commercial transactions etc., hence why the NFIU and EFCC are shadowing some of the activities of the gaming industry. This elicits the need for gaming companies to be up to date with their AML/KYC requirements, by partnering with the appropriate providers of these services. Also, to align with cyber security experts to better protect consumer data and prevent breaches.
Data protection, data privacy and data breaches are all key dimensions of cyber security law, which is a technical area of law. Therefore, lawyers in the business of offering consultations, advisory and services in gaming law and practice or directly working in the gaming industry or with regulatory bodies, should endeavor to be well versed on how compliance to legislation on data protection, AML requirements, child protection and safer gambling obligations and all available recourse for consumers, work in these rapidly developing industry.
Furthermore, Nigerian law makers should strive to create a comprehensive federal law or code on gaming activities that will address the rising concerns on data security and protection of private information, especially in view of recent happenings in the gaming industry. Additionally, such legislation should extensively provide for how gaming operators are to engage with their customers, the right to self-exclude from receiving gaming materials, protection of minors and those at risk of gambling harm, sanctions for non-compliance by operators and consumers’ right to recourse.
The issues with data; its security and privacy and other areas of concern, is not expected to go away immediately, it will continue to provide challenges and business opportunities for gaming lawyers for a long time to come.