Tax planning concept on blue table flat lay. | Free Photo
In early 2025, Nigeria implemented extensive changes to its gambling tax legislation in an effort to increase government income and provide greater supervision to a rapidly expanding sector. The regulations, which target both operators and players, show that the government intends to regulate a sector that has hitherto had little control and monitoring, especially online.
A Breakdown of the New Rules
Most Nigerian platforms focus heavily on sports betting, and their casino sections are often secondary, with fewer games, limited variety, and basic features. But an
online casino without Cruks, for example, may provide Nigerians with comprehensive casino suites, including VIP rooms, slots, live roulette, and crypto gambling options. Many have regulatory credibility, such as Malta or Curaçao licenses, and customer service standards that Nigerian players find appealing.
The main change is the introduction of a 5% withholding tax on all gambling winnings for Nigerian residents, regardless of where the winnings are earned. This means whether a bettor places a wager with a Lagos-based sportsbook or an international licensed online casino, the same rate applies.
For non-residents, the withholding rate is even higher, 5% on all gambling earnings sourced from Nigeria. These measures are part of a broader push by the Federal Inland Revenue Service (FIRS) to increase tax compliance across digital sectors.
These taxes aren't new in principle, but they’re now being actively enforced a senior FIRS official mentioned. FIRS says it's about ensuring fairness; everyone in the value chain should be contributing something.
The Sentinel Payment Gateway and Deposit Duty
One of the most impactful changes for operators, particularly those in the online space, is the implementation of
the Sentinel National Payment Gateway, a centralized platform designed to track deposits and enforce a new 4.5% Player Deposit Duty.
Under the new rules, all operators, including offshore sites targeting Nigerian users, must register with the National Lottery Regulatory Commission (NLRC) and obtain a Remote Operator Permit to legally serve Nigerian customers. Those that do are exempt from VAT and corporate income tax, but they must comply with the 4.5% duty and remit it via Sentinel.
This system enables real-time monitoring of transactions and allows the government to track gaming activity more effectively.
Offshore Operators and Nigerian Users
Here’s where things get more complicated and controversial. Nigerian residents playing on offshore casinos, even those not directly registered in Nigeria, are still
expected to pay the 5% withholding tax on their winnings.
FIRS has clarified that the tax applies to all gambling income earned by residents, regardless of whether the operator is licensed in Nigeria or another jurisdiction like Curaçao or Malta.
“There’s a misconception that if you’re playing on an international site, you’re outside the reach of Nigerian tax laws,” said tax consultant Ifeoma Ajayi. “That’s simply not true. The law is based on residency, not geography.”
Compliance and Loopholes
While the intention behind the policies is clear, enforcement may prove challenging. Many offshore casinos allow players to deposit in cryptocurrencies like Bitcoin or Tether, creating a grey area when it comes to taxable income and transaction tracking.
Platforms that haven’t registered with the NLRC or connected to Sentinel may still operate in Nigeria via VPNs and mirror sites, making it difficult for regulators to monitor compliance.
Still, officials say enforcement will tighten, particularly through collaboration with fintech firms, mobile money operators, and banks.
“We’re not going to rely on self-reporting,” said a source close to the Central Bank of Nigeria. “We’re building a framework to trace gambling-related inflows and flag patterns.”
Impact on Players
For players, this means gambling has suddenly become more regulated and potentially more expensive. A ₦100,000 win on a foreign casino now comes with a ₦5,000 deduction if declared or caught by enforcement. Non-compliant users could face further penalties, though the implementation of such measures remains unclear.
There’s also a strong incentive to use platforms that are officially registered in Nigeria, as they’re more likely to handle tax reporting and remittance on behalf of players. Unregistered platforms leave players legally liable for their own tax compliance.
Fintech analyst Tunde Olayemi explains: “Nigerians have always sought flexibility in where and how they play, but now the government’s saying, if it touches your bank account, we want our share.”
Industry Reaction
Some operators have welcomed the new structure, saying it creates a clearer playing field. Others, especially offshore platforms that relied on low-visibility transactions, are reportedly reassessing their Nigerian user base.
In March 2025, a number of sites quietly updated their terms of service for Nigerian users to reflect tax obligations, a signal that many intend to comply rather than pull out of the market.
What’s Next?
The NLRC has hinted that more regulation is coming, including player protections, advertising guidelines, and licensing reforms. Industry insiders expect this could include limits on how offshore platforms operate in Nigeria, and possible blacklisting of non-compliant domains.
For now, one thing is certain: the era of tax-free gambling, at least officially, is over in Nigeria.
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