Lagos State Introduces 5% Tax Deduction on Betting and Gaming Winnings

The Lagos State Government has officially begun deducting a 5% Withholding Tax on gaming winnings across the state.

The move, which took many players by surprise, applies to net winnings from licensed gaming platforms operating in Lagos. Moreover, the deduction is now being made automatically at the point of payout.

Under the new directive, all licensed operators have been instructed to comply without delay. Therefore, affected players will receive their winnings after the statutory deduction has been applied.

The Lagos 5% Withholding Tax on gaming winnings is being enforced in line with Nigerian tax laws and existing regulatory guidelines. According to the state government, the measure is part of a broader effort to improve tax compliance in the fast-growing gaming industry.

Officials explained that 5% of qualifying net winnings will be deducted before payment is made. The deducted amount will then be remitted directly to the Lagos State Internal Revenue Service, LIRS, which serves as the statutory tax authority.

Meanwhile, licensed gaming operators are responsible for processing the deductions and maintaining accurate records.

In addition, players are now required to provide their National Identification Number, NIN, in line with Know Your Customer, KYC, regulations. This requirement is aimed at strengthening monitoring and reducing fraud within the sector.

Although the policy has been introduced as a compliance measure, reactions among gaming enthusiasts have been mixed. Some players have expressed concerns about reduced payouts. However, government officials maintain that the tax serves as a credit to the player and aligns with existing financial regulations.

Furthermore, authorities say the initiative reflects Lagos State’s commitment to expanding its revenue base responsibly. The gaming industry has witnessed rapid growth in recent years. As a result, stronger oversight mechanisms have been introduced.

The Lagos 5% Withholding Tax on gaming winnings is expected to standardize tax practices across licensed platforms. Meanwhile, enforcement is already underway, and operators have been formally directed to begin immediate implementation.