Connect with us


Kashamu-Adebutu fight endangers multibillion naira betting




Operators in the nation’s money spinning gaming industry are currently at war for the control of the industry, findings have revealed. Gaming has hit a peak in Nigeria, benefitting from the large and youthful population, improving internet penetration, and the increasing access to internet-enabled devices.
According to Business Hallmark findings, gambling in the country is made up of legal and illegal games and it runs into trillions of naira annually. While legal gambling is recognized and earns income for the government, illegal gambling is largely unregulated.
These gambling operations are conducted in accordance with a number of gambling laws and Acts that define the types of gambling games allowed. While only three types of gambling, namely lottery, casino, and sports betting are permitted in Nigeria by the National Lottery Regulatory Commission (NLRC), the sole regulator of the lottery industry in the country, roulette, dice games, and card games, though illegal, are well entrenched in the country.

Checks revealed that Nigerians are patronizing lottery and sports betting, largely due to the fact that they are very cheap to play and could yield enormous pay-outs. For example, one can play lottery with stakes as low as N20 up to N100 for the highest rewarding games.
In 2018, a 35-year-old engineer from Edo State, Mr. Sidney Osahon, won the ‘Give ‘n’ Take N20m National Jackpot Bonanza, the biggest in Nigerian lottery history with just N100. Many other Nigerians have won huge amount ranging from N1m to N15m in cash prizes.
BH reliably gathered that between 45 and 50 million betting are placed weekly. According to an agent of Premier Lotto in Agege, Akeem Olanrewaju, a lottery has two draws a week, one mid-week on Wednesday and the other on Saturday. Checks revealed that the operation of other lotto such as Western Lotto, SMS, Golden Lotto, Premier Lotto, World Wide, among others are similar in nature. To win a prize, a player must select six numbers from 1 to 49. If he is able to match three to five numbers, he wins some cash.
Like lottery, online sports betting have also hit its peak in Nigeria, owing largely to the small amount a player can stake to win a jackpot as well as payment systems developed by technology firms that have made online businesses more viable. Unlike in lotto where a player picks a set of six numbers, sport betting is a combination of predictions on different types of sports such as football, basketball, horse race and car racing. With as little as N50, a player can win hundreds of thousands, even millions of naira.
There are unconfirmed figures of the value of the gaming industry in Nigeria. However, the nearest figure, according to BH sources is around N6 trillion annually. According to a source in NLRC who spoke on condition of anonymity, the conservative estimate of how much Nigerians spend on betting is on average N5bn daily.
According to him, the gaming industry is more lucrative than oil and gas, saying that lottery alone makes up to 10 million, sports betting 32 million and others 8million bets daily. He revealed that this is due to vastly increase with the ease and growth in popularity of gaming apps.

News continues after this Advertisement

The Executive Secretary, National Lottery Trust Fund (NLTF), Mr. Bello Maigari, also confirmed the huge potentials of the lottery industry when he disclosed that the nation loses trillions every year to illegal lottery.
Though, Maigari did not give the exact value of the gaming industry, he however disclosed that more than one trillion naira is lost annually by the Federal Government to activities of illegal lottery operators. He expressed fears that such proceeds are likely being channeled into crimes including fraud and money laundering.
“Nigerian government is losing more than one trillion naira every year because of illegal operators. There are a lot of illegal operators in the industry and these are part of the reasons why there are leakages.
“Some are conducting this business without being regulated and there are chances that such proceeds will be channeled towards crime, fraud, and of course, money laundering.
Maigari said the country has many unlicensed lottery operators fleecing the government and causing financial leakages as to what they are expected to remit to the trust fund if they were licensed.
While most Nigerians are aware of sports betting, lotteries and casinos, much is not known of online gaming, another money-spinning sport. Online gamings include computer games such as ‘Candy Crush’, ‘Mortal Combats’ and ‘Farm Heroes’.
In a report by NewZoo, a global provider of games and e-sports analytics, Nigeria leads in the amount of revenue it generated from gaming activities between January and October 2018 ahead of its peers on the continent. According to the report, the country ranked second on the continent, having generated about $180 million in revenue while Egypt led the whole continent with $286 million in revenue for the same period.
Algeria generated $142 million and number three in Africa, South Africa made $129 million and Kenya earned $31m from gaming activities this year ended October. However, out of 100 countries that the study covered globally, Egypt ranked 37th, Nigeria ranked 45th and Algeria ranked 54th, South Africa ranked 56th while Kenya ranked 89th, while China led the top 100 countries by game revenues with $37.9bn in revenues.
Chief Executive Officer, Newzoo, Peter Warman, noted that the revenues were based on consumer spending in each country and exclude hardware sales, tax, business-to-business services, and online gambling and betting revenues.
In a recent report on the gaming industry in Nigeria, PwC highlighted the trends that are influencing the industry. The report said the customer base of gaming has broaden to include the young middle-class Nigerians, disabusing previously held stereotype that the industry is only patronized by lower income earners.
“To some extent, the need for additional income in the face of the recent economic recession which has left a number of youths unemployed and underemployed has provided a boost to the base of gaming users – in particular, sports betting and lotteries..
“Business Monitor International (BMI) research forecasts 182 million mobile subscribers in 2021, from the current 153 million. The expectation is that as the number of internet subscribers’ increase, so will the number of gaming users”, the report said.
A report on Gambling in Africa published in 2016 by KPMG reeled out some astonishing numbers on the sports betting industry in Nigeria. KPMG said that as at 2016, the leading sports betting company, Bet9ja raked in an average monthly turnover of $10m, (N3.6 bn while
NairaBet raked an average turnover of $3m-$5m.

A recent survey conducted by GeoPoll, a U.S based firm that provides research services, including text message surveys and online surveys, in emerging markets throughout Africa, Asia, and the Middle East, found that 54% of young people in six sub-Saharan African countries (Nigeria, South Africa, Ghana, Tanzania, Uganda and Kenya) have tried gambling.
Speaking at a media parley in Lagos last week, the brain behind Western Lotto Nigeria Limited, Senator Buruji Kashamu, said that leading lottery and sports-betting companies generate more than N1.5billion daily and N45billion monthly.
“All the lottery and sports-betting companies have over 60,000 outlets/agents spread all over the country. It is common knowledge that leading lottery and sports-betting companies are generating more than N1.5billion daily and N45billion monthly. Can you imagine one lottery operator saying he wanted to fix the National Stadium in Lagos when he has government’s money in his hands? What kind of corporate social responsibility or philanthropy is that?” he asked.
He alleged that promoters of lottery and sport betting promoters owe the Federal Government over N600 billion in unpaid taxes.
“I have it on good authority that all the promoters ought to have paid N600 billion to the Federal Government and its agencies but they have only paid N9 billion in the last 14 years. Some of them have over 400 active accounts in various banks in Nigeria that they use to perpetrate their fraud and illegality of short-changing the government,” Kashamu said.
Meanwhile, operators in the gaming industry are daily devising new strategies to help gain control of the market. One of their strategies is the engagement of foreign partners to help streamline their businesses. According to findings, local firms are now striking partnership deals with gaming content providers like Gameloft, Intralot and Sirplay to provide technology services and support.
For instance, NaijaBillionaire has partnered with international platform providers like Lightmaker Lotto which offers payment solutions and Indus Net Technologies which develop and provide technical support and digital content.
Findings also revealed a growing partnership between gaming firms and telecommunication companies. According to an operator, the partnerships have become important in delivering a successful gaming experience.
“Telecommunication and payment companies are making gaming more accessible to mobile users. For example: in the lottery segment, the Premier Bet Lotto popularly known as ‘Baba Ijebu’ has partnered with MTN, enabling consumers to access the lottery via short codes.
“Bet9ja has also recently formed a three year partnership worth N200 million with Nigerian National League to enhance the Nigerian League within the sports betting segment”.
Reports indicate that operators are currently engaged in a bitter war to protect their territories. Operators are at currently war over the granting of license to Western Lotto Nigeria Limited to sell and promote Ghana Games in the country. Western Lotto also courted trouble by seeking a Federal High Court order to stop the sale of the games by other lottery operators in the country.
In December 24, 2019, the court granted Western Lotto Limited an order authorizing it to search 23 firms for evidence of violation of its Ghana Games patent infringement.
However, the operators claimed that the agreement prohibited them from offering 5/90 Ghana games comprising Monday Special Lotto, Lucky Tuesday Lotto, Midweek Lotto, Fortune Lotto, Friday Bonanza Lotto, Saturday National Lotto, VAG Lotto and Super Six Lotto, to Nigerian stakers and consequently affects the revenue accruing to the Federal Government of Nigeria.

Western Lotto, in a letter to the Director-General of the National Lottery Regulatory Commission, debunked the claims, saying its suit against the lottery operators was borne out of altruism to halt the diversion of revenue meant for the government by the operators.
According to Western Lotto, most of the lottery operators have been short-changing the Federal Government in the payment of taxes.
“Some of the major operators are generating over N300 billion a year without paying the requisite taxes to the Federal Government. Many of them have more than one platform which remain hidden from the NLRC and which they have been using to perpetuate their illegal activities in order to not pay taxes to government.”
Western Lotto said with the exclusive rights obtained by it to market the games, there would be full disclosure which would assist the NLRC to generate billions of naira yearly from each of the major operators.
The company tasked the Economic and Financial Crimes Commission (EFCC) to check the finances of lotto operators with a view to determining their level of compliance with the nation’s tax regulations.
BH also gathered that the recent probe of Chief Kessington Adebutu (Baba Ijebu), Nigeria’s gambling mogul whose business empire has enjoyed decades of patronage as a household name across the country by the EFCC, was orchestrated by Senator Kashamu and his company, Western Lotto.
The anti-graft agency had last week detained and questioned the son of the octogenarian, Segun, questioning him on matters ranging from alleged tax fraud to economic sabotage. EFCC officials confided in BH that Adebutu’s business activities came under scrutiny following a petition from Western Lotto.
The December 2019 petition from Western Lotto had asked the EFCC to investigate billions of naira in lost government revenues and tax fraud against Adebutu’s Premier Lotto.
EFCC agents, it was gathered, identified over N5billion in revenue Premier Lotto denied the government. It was also learnt that several other betting companies are under the radar of the EFCC as part of the massive inquiry into how betting funds are handled in the country.

News continues after this Advertisement
News continues after this Advertisement