Lagos enforces 5% withholding tax on gaming winnings

2026-02-20 - 20:06

By Olasunkanmi Akoni The Lagos State Government has announced the enforcement of a five per cent withholding tax on gaming payouts, directing licensed betting companies across the state to begin immediate automatic deductions from customers’ winnings. The Chief Executive Officer of the Lagos State Lotteries and Gaming Authority, Mr. Are Bashir, issued the directive in a public notice to licensed gaming platforms, confirming the immediate commencement of the tax regime targeting winnings generated through regulated betting operators. According to the notice released on Friday, the state has begun implementing a 5% Withholding Tax (WHT) deduction on gaming winnings in line with applicable Nigerian tax laws and regulatory directives governing the gaming industry. The deduction will apply directly to players’ earnings before payment is made. The notice clarified that the tax applies to net winnings from licensed gaming platforms operating within Lagos State and will be deducted at the point of payout. All licensed gaming operators have been directed to comply immediately with the framework. Under the arrangement, betting companies are required to automatically remove a portion of winnings and remit it to the Lagos State Internal Revenue Service (LIRS), the statutory tax authority. Officials said the policy forms part of broader fiscal reforms aimed at strengthening oversight, transparency, and accountability in the rapidly expanding gaming sector. The directive also introduces stricter identity verification requirements for players, mandating compliance with national identification rules. According to the authorities, players must provide their National Identification Number (NIN) in line with Know Your Customer (KYC) requirements, while licensed operators are expected to manage deductions and remittances in accordance with regulatory standards. The government noted that bettors will receive their winnings net of the statutory deduction, with proper records maintained for transparency. It added that the withheld tax will serve as a tax credit to players. All licensed gaming operators in Lagos State have been formally directed to commence the deductions with immediate effect.