Nigeria: State Gaming Regulators Kick Against VAT, Explain Operations

State gaming regulators have called for a better understanding of their operations, unity of processes and licensing, especially from the lens of the National Lottery Regulatory Commission (NLRC).Under the aegis of Association of State Gaming Regulators in Nigeria (ASGRN), the body also kicked against plans by the Federal Inland Revenue Service (FIRS) to introduce Value Added Tax (VAT) on gaming in Nigeria.

ASGRN added that implementing VAT in gaming could have a devastating effect on the economy.The body, which is however, silent about the "devastating effect", noted that the constant impasse of the NLRC on their operations needed to be curbed.

The body, which rose from a recent meeting, which comprised representatives from states currently regulating all-gaming activities, condemned the lingering issues of rights to regulate the industry between states and the Federal Government's agency and others.

Jointly speaking after the meeting, the chairman of Enugu State Gaming/Lotto Commission, Harrison Ogara, and the Head, Pools and Betting Division of the Ogun State Internal Revenue Service (OGIRS), Felix Fagbohun, flayed the activities of the officials of NLRC, who they said were going from state to state to shut down gaming operators legally licensed by the State Government.

ASGRN explained that it was illegal for a national agency, in the mold of NLRC to claim rights to regulate gaming activities clearly under the residual list in the Constitution of the Federal Republic of Nigeria (as amended) adding that such activities are tantamount to eroding the very essence of true federalism.

Explaining further, Fagbohun enunciated that while some of its members have regulated the industry under gaming laws promulgated as far back as 1981 and 1991, the NLRC only came into existence in 2005". Fagbohun stressed that ASGRN is operating from the constitutional realm adding that "for NLRC to assume the roles it is playing now, the Commission must first seek for an amendment of the Constitution of the Federal Republic of Nigeria, because as it is today, gaming regulatory power lies in the states."

While recounting some of their latest issues with NLRC, Ogara said: "When we noticed the obvious infraction on the provisions of our statute, the states were taken aback and surprised by this act, since the NLRC itself had reached out to the states to explore a joint approach to regulations, a development that was warmly embraced and supported by a few states. However, following concerted efforts of some of the states a lot of progress had been made, until this unfortunate act by the NLRC."

Ogara emphasised that the authors of the Constitution gave the regulatory role to states because of the peculiar nature of the industry, states and their religious inclinations. "Nigeria is a Federation where the three tiers of government are expected to act independently together. We are also aware that there are cases in Supreme Court seeking for clarification over who has rights to regulate gaming."

While justifying the right of the state to regulate gaming, the body pointed to the recent Bauchi State Government's ban on all gaming activities in the State citing several reasons.

"This singular realisation that gaming/gambling is prohibited by some religions and other factors led to the placement of gaming regulation in the Residual List of the Constitution.

"As such, states that permit gaming have the inherent constitutional right to regulate gaming. ASGRN is therefore calling on NLRC to understand that legally, its regulatory power only covers the ambit of the Federal Capital Territory and setting up a viable National Lottery to challenge what is currently available in other countries along the West African Sub-region."The body further disclosed that Ghana Lotto for instance is very popular in Nigeria and asked why Nigeria cannot float a similar lottery?"

Reacting to the news that the States were making arrangements to float another body charged with the responsibility of issues regarding gaming taxes and licensing of gaming operators, Ogara said: "In fullness of time and after all due diligence and consultations have been concluded, we intend to establish a Joint Gaming Board (JGB) (one of the outcomes of the roundtable discussions between the States and NLRC), whose duty will be to harmonise and design a unified tax regime among the regulating states. On the issue of licenses, we shall leave it for the respective states to decide."

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