Players to receive net winnings as Lagos enforces withholding tax, tightens KYC rules across betting platforms.

The Lagos State Government has begun enforcing a 5 percent withholding tax (WHT) on betting and gaming winnings, directing all licensed operators to automatically deduct the levy at the point of payout before funds reach players.

The directive, issued in a public notice to gaming companies, confirms the immediate commencement of the tax regime across Lagos. It was signed by Mr. Are Bashir, Chief Executive Officer of the Lagos State Lotteries and Gaming Authority (LSLGA).

According to the notice, the policy is implemented in line with Nigerian tax laws and existing gaming regulations, and applies to net winnings generated on licensed betting platforms operating within Lagos State. Operators are required to deduct the tax instantly and remit it to the Lagos State Internal Revenue Service (LIRS), the statutory tax authority.

“Five percent of qualifying gaming winnings will be automatically deducted before payment is made to players and remitted to LIRS,” the notice stated, adding that all licensed operators have been instructed to comply without delay.

Under the new framework, bettors will no longer receive full payout amounts, as winnings will be credited net of the statutory deduction. Authorities clarified that the deducted WHT will be properly recorded and recognized as a tax credit to the player, ensuring transparency and accountability.

The government said the move forms part of broader fiscal reforms aimed at strengthening tax compliance, oversight, and transparency in the fast-growing gaming industry.

In addition to the tax, the directive introduces stricter identity verification requirements, mandating players to provide their National Identification Number (NIN) in line with Know Your Customer (KYC) rules. Licensed operators are expected to manage deductions, records, and remittances in accordance with regulatory standards.

The Lagos State Government concluded by stressing that all licensed gaming operators must commence the deductions immediately, signaling a tougher regulatory stance on gaming revenues in Africa’s largest commercial hub.