Court Declares That FG Lacks Power to Regulate Gaming & Lotteries within Federating States

Justice Atinuke Ipaye of the Lagos High Court, Ikeja division; in delivering judgment in a suit (LD/49089CM/2021) filed by the Lagos State Lotteries & Gaming Authority (LSLGA) against Shade International Gaming Ltd; trading as Betika and Neomobile Entertainment Limited; held that the Federal Government cannot through the National Assembly legislate on any issue not contained on either the Exclusive or Concurrent Legislative List.

The judgment which was delivered on the 8th of November 2022; specifically read that the Federal regulating body, National Lottery Regulatory Commission (NLRC) lacked the powers to license and regulate lotteries and gaming Companies, operating in any State across the country.

Reason for the Court Action

The action was filed before the court based on the refusal of the Respondents, who are federal licensees, to obtain a separate license from Lagos State, before they can operate within the state.

The Plaintiff/Applicant’s Originating Summons was brought pursuant to Order 5 Rule 4 (2) and Order 5 Rule 5 of the 2019, High Court of Lagos State Civil Procedure Rules 2019 and Sections 19, 35, 86 and 96 of the Lagos State Lotteries and Gaming Authority Law 2021.

Plaintiff’s Submission

The Plaintiff in their Submission through their counsel, argued that they are statutorily established by the Lagos State Lotteries and Gaming Authority Law 2021, to license and regulate lotteries and gaming activities within Lagos State, thus, it is an illegality for the respondents not to obtain the relevant license, before commencing their business within the State, whether online or offline.

They further argued that ‘lotteries and related gaming activities are items on the Residual Legislative List’ and as such only the State Houses of Assembly can validly legislate on it, and that the National Assembly through the National Lottery (Amendment) Act 2017, has usurped the powers of the states to legislate on lotteries and related gaming activities, which amounts to a flagrant disregard of the provision of section 4 of the Constitution of the Federal Republic of Nigeria 1999 (as amended).

Plaintiff’s Prayers

In the suit, the plaintiff asked the court to determine, “whether the failure of the respondents to obtain lotteries and related gaming activities license from the agency, as required by the Lagos State Lotteries and Gaming Authority Law 2021, while carrying on the business of lotteries and related gaming activities in Lagos State, is not unlawful.

Secondly, the plaintiff asked the court to determine “whether the agency can compel the respondents to pay appropriate registration fees for obtaining license and other statutory remittances for carrying on the business of lotteries and related gaming activities in Lagos State, as stipulated by the Lagos State Lotteries and Gaming Authority Law 2021.”

Respondents’ Contention

The respondents’ argument was that they have already obtained license from the federal agency and thus need not obtain a separate license to operate their gaming business within any state in the country.

Court Declaration/Order

The Court in delivering judgment agreed with the plaintiff counsel’s Submission that matters relating to lottery, betting, gaming and other connected activities, are not specified or contained in either the Exclusive or Concurrent Legislative list, therefore the National Assembly cannot legislate on such matter.

The Court, therefore declared that the respondents’ refusal to obtain license from the plaintiff was unlawful. The Court further ordered the respondents to pay statutory registration fee to obtain gaming operating license and all other statutory remittances to the Applicant, and that they are barred from carrying out any gaming operation in the state, without first obtaining the appropriate license from the Applicant.

 Opinion

This whole fiasco of who has the regulatory power between the state and the federal, to regulate gaming matters in the country, have been an on-going tussle for years, with the judiciary constantly contradicting itself, in the judgment rendered.

From the judgment in Edet V. Chagoon & anor (2008) where the court held that the state assembly should legislate, as ‘pool betting and casino gaming do not appear in either Exclusive or Concurrent List and so fall under residual list’; to NLRC & Anor.  V. A.G. Lagos State (2009) where Justice A.M. Liman held that the requirement that ‘a licensee under National Lottery Act 2005, should obtain a license under Lagos State Lotteries law, before they can operate their business; is irregular, illegal, unconstitutional and invalid. etc.

As recent as August 2022, Justice I.N Oweibo of Lagos High Court, Lagos division, declared the federal government as the sole regulator of gaming business in Nigeria; and now this judgment, declares once again the exact opposite.

One wonders though, why the Supreme Court still tarry in deciding on this matter that has been pending before it, for a long time now, in order to put this whole legal debacle to rest, once and for all. The gaming Industry is a volatile space and without proper regulation, a lot can go wrong.

 

 

 

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