CEO LSLGA Speaks on the Nigerian Gaming Industry
In an interview with the Gaming Week team, the Chief Executive Officer of the Lagos State Lotteries and Gaming Authority, Mr. Bashir Abiola Are, has this to say on the Nigerian gaming Industry.
Federal and State Government Tussle
On the enduring issues between the Federal Government and the States over who has jurisdiction to regulate the gaming industry; he opined that whatever anybody does in the industry, will have to be done with regard to the provisions of the Constitution of the Federal Republic of Nigeria.
According to him, if the constitution is not followed, then there is bound to be a problem. He explained that the constitution provided that the House of Assembly of a state shall have the power to make laws for the peace, order and good governance of the state and in part thereof with respect to the following matters, that is to say, any matter not included in the Exclusive List or the Concurrent List.
He stated that in 2008, there was a landmark judgement by the Federal Court of Appeal that settled this matter of who is to regulate. He added that any other thing besides the COA judgment, is a circumvention of the constitution.
In the aforementioned case, the Federal Court of Appeal held that Pools Betting and Casino gaming, do not appear in either Part 1 Exclusive List or Part 2 Concurrent List of the Second Schedule of the 1999 Constitution, and as such not being an item in the Exclusive List or on the Concurrent List and not matters incidental or supplementary to any of the parts in the Exclusive Legislative List or even in the Concurrent List, Pools Betting and Casino are residual matters and all residual matters lie within the purview of the state houses of assembly.
He expressed the view that, in view of the above, under no circumstances without prejudice, should the National Assembly deliberate or enact a law to regulate things that concerns gaming, lottery or casino because it is not part of what is stated in the constitution.
According to Are, there is need for a sit down, where the law and how it will be followed by both parties will be outlined. He stated also that, as individuals and as public officers, a Memorandum of Understanding within the confines of the constitution to collaborate and work together to grow the industry can also be arranged.
NLRC & Operators
On the fact that the FG, through the NLRC, still insists that operators must come to it for approval, before they can set up shop; Are opined that it is all part of what he calls abuse of the constitution, because you can’t give what is not yours.
He stated that you cannot give out, a property or asset that is not yours. He went further to state that even if the NLRC have to do that, they still need the permission of the state houses of assembly or the gaming agency from each state to do so, on the state’s behalf.
He reiterated that the federal agency does not have such power under the constitution, as of today. However, he cannot say about what will happen tomorrow, as the constitution may be amended to allow the Federal Government to do that, but as it is today, they do not have such powers.
On the question of whether it is even the role of NLRC, to screen operators in the gaming industry; Are expressed the view that un-related matters should not be lumped together. Every agency has its mandate; EFCC, NCC, CBN all have their mandate.
He gave a “perfect” example with any business, regardless of whether it is gaming or anything that uses internet. He stated that there are Internet Service Providers (ISP) that provide internet services and each business or entity subscribes to an ISP, the fact remains that each ISP has already obtained its licence from the NCC.
Therefore, if they have obtained their licence from NCC to do whatever business, why should another agency lump another thing on top of it? If a gaming operator, have already gotten a licence from gaming regulatory authorities and paid for internet service of which the ISP has already got a licence from the NCC, what has that got to do with regulation of gaming again? He added that things need to be done methodically.
He opined that doing things methodically is why Lagos State is working. According to him, Lagos has always moved forward, and that there is a section of the constitution that says that anything that is outside the constitution to the extent of its inconsistency, is null and void. He added that one cannot circumvent the constitution, unless there is no believe in it. If people act outside the constitution, that is bound to bring anarchy.
On the question of reverting to the Supreme Court to settle to the issue of regulatory supremacy, Are, stated that the matter is already at the Supreme Court. He stated that the matter was adjourned on October 21, 2021.
He explained that the matter before the Supreme Court is to settle the jurisdiction of gaming, whether the National Lotteries Regulatory Commission (NLRC) has the powers to regulate gaming in Nigeria. He added that 16 states of the federation including Lagos state, have joined the case, against the National Assembly and the Attorney General of the Federation.
Proposed Remote License
On the issue of NLRC proposing the issuance of offshore licences to overseas operators that may not have a physical presence in Nigeria; Are stated that the lottery association, the bookmaker’s association, the state gaming regulators and the NLRC are currently meeting to deliberate on these matters, but the fact remains that the position of the operators as of today, is that they are against it.
The state gaming regulators are also against it because they believe it is undermining their purview constitutionally, and NLRC cannot issue remote gaming licences to foreign operators, without state regulator’s consent, and even if it has to be done, it will be on their behalf.
He went on to add that for the remote licensing to happen, the state regulators’ have to give permission, and as it is, they don’t have such permission. Realistically speaking, he is of the opinion that it will be disadvantageous to the states and to the operators.
According to Are, the industry has some operators that have invested some fantastic amounts of money and structured their companies. They have invested heavily for something like 25 years in the sector. Now, they want to provide foundation for people who have not invested in the country and in the industry.
He stated that the offshore licence is going to act as that foundation. He asked whether the people who have been investing in the country and industry, should just pack their bags and go. Or whether they expect them to also change their operations to remote licence?
He went on to state that if the remote licensing is done, with over 150,000 people in employment in the gaming sector in Nigeria, what is expected to happen to them: in terms of employment and investment? It will be like telling them that they don’t have to invest locally; that they can just pay some peanut and make huge amounts of money. There will be capital flight, but no development.
All these companies that they want to grant offshore licences to, are not based in Nigeria. He said that what is needed now, is a lot of local content, so that the sector can grow within, and we can export, because our people are capable, when given the platform.
Lagos State Industry Investment
In Lagos State alone, the Governor, Sanwo-Olu authorised N250 million from the state’s ‘Good Causes’ account, to be paid into the Lagos State Science and Innovation Research Council, to develop software locally. It is a form of grant to the people.
The state has just signed a MoU with an organization in France to develop e-sports in Lagos. Such grants are being used to develop the people locally. So, if you they are being told that they can work remotely, of what advantage then will it be to the people, to the country?
It is being done in Europe because the European Union had a special agreement, so when you get a licence in Malta, you can use it in certain countries. That is what the state gaming regulators are planning to do, it is in the pipeline.
The project is being given to one of the best consulting firms in the world, to develop a framework among the states; in order to set the standard, have a uniform licence, and uniform tax regime and then determine how to share the revenue amongst all.
He stated that state regulators have an agreement on jurisdiction outside of Nigeria. They are in partnership with us for the regulators to go after remote operators, not licenced by the state regulators. He added that it is not within the mandate of FIRS to collect gaming taxes as it is not within their mandate to issue gaming licences. Why FIRS? Every agency focuses on its mandate, strictly to have the desired outcome.
Association of State Regulators
Are, explained that charity begins at home, so the states needed to put their house in order. The Association of State Gaming Regulators have expended a lot of resources, in the past year working on a uniform regime and standard. He explained further that the moment that is activated, operators will not have to run Helter and skelter.
There will be a platform an operator can go to apply to one or apply to all. That is the state regulator’s target for 2023. Also, hopefully the Supreme Court will declare judgement with regards to the jurisdiction matter before it, very soon.
Court Judgments on Jurisdiction matter
There’s been a number of judgments, and each party in the matter has won a case. Where does that lead everyone?
Are answered that a judgment in favour of the state just came last month, even though they have been in court for the past two years. He explained that when a business is operating in Lagos without a license, it is illegal. The law requires that we give you seven days’ notice for regularise. Being a business-friendly environment and business-friendly government, we even give up to six months to regularise. When we exhaust that method that is when we go to court, there are some matters we took directly to the Lagos High Court because they are operating illegally in Lagos. The timing is just a coincidence.
Isn’t there something in the constitution that the Federal Government is holding on to?
As much as there are complaints about the 1999 Constitution, one has to still give credit to those who wrote it. They are not perfect, and there is no perfect document anywhere; even the American constitution is not perfect. We can continue with the amendment (s) whenever the need arises.
Trade and commerce are on the Second Schedule of the Executive Legislative List Part 1. It is item 62. It addresses in particular, trade and commerce between Nigeria and other countries, including the import of commodities into and export of commodities from Nigeria, and trade and commerce between states. Where does gaming come under trade and commerce? This is what the constitution says in black and white. The question then would be, is gaming a commodity?
There are many cases to prove that the courts have decided that when a matter is residual it is within the purview of the state government and that is why the NLRC is hiding under trade and commerce. They know. The purpose of the trade and commerce law is for commodities and goods. There are other services, too, including registration of the business name.
In Lagos, the Land Use Charge constitutionally belongs to the local government. But the local governments came together and formed a partnership with the state government and the state the permission to collect the Land Use Charge on their behalf. The state did not use force to collect the Land Use Charge. The local government gave them the authority to collect on their behalf, ‘be our collection agent.’ You have to follow the rule of law.
The Ministry of Finance is our parent ministry, but the state house of assembly also oversees us through the Finance Committee and Appropriation Committee and through the Public Accounts Committee.
NLRC states that online gaming is within its purview.
In response to the above statement, Are stated that the Lagos state licenses, its terms and conditions, and the law, all talk about online and offline. Lagos has always been at the forefront. People have different narratives, but as a state from the beginning of time, we have always legislated online and retail.
The internet is just a highway to convey services. You can bring any product online when you sit down here and order goods from Amazon. You pay tax wherever those goods are going to be delivered. The Nigerian constitution is supreme and its provisions binding on authorities and persons throughout the Federal Republic of Nigeria. The Federal Republic of Nigeria cannot be governed by any person or group of persons or part thereof except through the provisions of the constitution.
More on Operators
Why do some operators still prefer to work with the NLRC?
The CEO responded that most of the successful operators come to Lagos. Some of those who go to the NLRC to obtain a licence that allows them to operate in other states of the federation, can’t come to Lagos. As far as we are concerned in Lagos, they are illegal operators because they have to conform to the laws of the land.
The constitution of Nigeria gave the Lagos State House of Assembly the power to enact lottery law. We harmonized our law in 2021. There are different laws in Lagos State. There is one for casino. There is one for Pools Betting. We will harmonize everything under one umbrella. The purpose is not for online. The purpose is to harmonize all the laws, to make it easier. According to him, the state is approaching Ease-of-Doing-Business for operators, or whoever needs to know anything about gaming and lottery. They can just get the document and have all that is needed. That is the purpose.
Issue of Mandate
Does this struggle for jurisdiction allow you to look into other areas of your mandate?
In response to the question, Are stated that there are two things that are very important to the agency: ‘responsible gambling’ and ‘good causes. The agency sets aside some monies to correct vices in the state, as a sort of intervention. When it comes to responsible gambling, the agency engages in a billboard and a lot of advocacies.
Each year, the agency evaluates its campaign and advocacy, and reviews the outcome. The reason you are not seeing a billboard in recent times, is because the problem has been targeted, which is underage gambling.
We have a non-profit organization that we sponsor that goes to the target group directly to deliver some programmes about underage gambling and gambling addiction, especially in secondary schools. Secondly, if you take BRT buses, there is free Wi-Fi. When you connect to this free Wi-Fi before you can be allowed to use the internet, our advocacy will come up.
There is a video, and you have to watch that video before you can use the Wi-Fi, talking about underage gambling and gambling addiction. We did it for six months and we saw the impact. Some young people take buses with their parents. Students ride on these buses so we targeted areas where the messages will go directly to them. In the next few weeks, we are signing a one-year contract on those BRT buses so that they can see the messages very well and feel them.
Everybody uses social media now. They use the internet. Because it is free it is a way for us to target them directly. As part of our good causes, we intervened in the management of emergencies in the state, especially as regards fire emanating from burst pipelines, so we bought specialised fire trucks and donated them to the Lagos State Fire Service.
In the same vein, we had a meeting with the Lagos State Fire Service, and we compared the population of Lagos with the population of Ghana, and we saw a lot of deficiencies. In the last 24 months, the Lagos State Lotteries and Gaming Authority has sponsored and built and equipped fire stations in the state at Ajegunle and Oniru.
In the area of education, across the state, we have constructed and renovated eight schools. We have helped five Lagos residents pay for a kidney transplant because the cost is enormous. In terms of alcohol addiction, we also sponsor some non-profit organisation to carry our advocacy.
For children with disability, we have sponsored their institutions to have equipment for them. There is a guy in Canada studying Aviation Management. We sponsored him because those courses are not readily available in Nigeria. Regardless of your tribe or nationality, we serve every resident of Lagos State.
If you can prove that you are a resident of Lagos, then we will process your application. You have to understand that the good cause’s levy that we collect is to correct the vices of alcohol and gambling. If you don’t have a reserve fund for that, it may take a longer time to intervene. That is why our funds must be readily available for intervention at any point in time. If there is a disaster or any unforeseen circumstances, the purpose of the agency is to intervene almost immediately.
Can you let us into some of the things you are doing about responsible gaming?
We have created a department in this agency dedicated solely to responsible gaming, the aspect of underage gambling. We also have even for adults – gambling addiction, rehabilitation and correction therapy. We are working on an arrangement in partnership with Lagos State University and the University of Lagos to create an institute where we can have gambling addiction treatment and research.
Gaming is supposed to be entertainment and leisure. Where it is not regulated, it will collapse. In fact, serious operators do not operate where it is not regulated. For them to make sure that their investment is recoverable because it is a long-term investment, so they want to make sure that any environment they want to operate in is regulated. If it is not regulated, they won’t come there.
They want to make sure that the environment is sanitized enough for serious or responsible operators to come in. Even globally, there are international gambling addiction centres, so we are partnering with them. We want to plug into all these bodies and laws so that we can be on par with the European Union and North America.