Sports Betting Industry In Nigeria Faces Economic Storm

Nigeria’s sports betting industry, once a booming multi-billion-naira sector, is now struggling under the weight of a faltering economy, spiraling inflation, and a volatile currency.

According to Yahaya Maikori, President of the Nigeria E-Sports Federation and founder of Global Gaming Company Ltd., the dollar-dependent economy is choking operators, who now face steep costs for essential software services.

“Operators who paid $5000 for software four years ago, when $1 was about 600 naira, now have to pay the same $5000 at an exchange rate of 1600 naira. This significantly eats into their profit margins,” Maikori told SportsBoom.com.

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Beyond operators, punters are also grappling with inflation’s impact on disposable income.

“The assumption that customers have an insatiable appetite for betting may no longer hold when faced with the reality of meeting basic needs,” Maikori added.

Though the challenges are real, Maikori remains optimistic. He sees this as a critical moment for innovation and industry consolidation.

“The strong will survive, while companies resistant to change will be crushed,” he said, advising operators to explore new gaming sub-sectors like poker and develop local software to reduce reliance on foreign services.

Maikori also criticised the Nigerian government’s tax policies, warning that applying a blanket tax approach to the i-gaming industry could mirror the collapse of Kenya’s once-thriving sports betting market.

“I think because tax is a good revenue stream for the government, they are oblivious about how tax regimes work. The government is trying to drive whatever tax they can to bolster their coffers. In the i-gaming industry, we’ve had so many engagements with the government consultants, and they don’t seem to understand the pressing need to resolve the issue of a regulatory framework,” he stated.

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“In addition, and more importantly, the government doesn’t seem to understand that in the i-gaming industry, every subsector has its own unique mechanisms. Hence, having a uniform or blanket tax law and viewing the entire i-gaming industry as sports betting, which is just one sector could disrupt the superstructure that supports the stake element of the industry.”

“For example, until about 4 years ago, Kenya was the biggest i-gaming country in Africa, next to South Africa, with companies turning over 200 million dollars averagely per month. The Kenyan government then decided to apply taxes with what appeared to be punitive intent. As we speak, almost all the i-gaming companies have withdrawn their licenses and stopped operating in Kenya. So, when it comes to taxes, there needs to be a long-term approach that can develop the superstructures simultaneously.”

While the future may seem uncertain, Maikori believes Nigeria’s i-gaming industry has the potential for significant growth if the government engages more with the sector.

He predicts that in the next decade, smaller betting operators will undergo “forced consolidation” due to economic pressures, while larger, more daring companies will likely branch into other i-gaming sub-sectors such as poker, bingo, and casinos. He also foresees the rise of billion-dollar sports betting firms in Nigeria, with Nigerians in the diaspora playing a key role as financial backers.