1. Introduction
Sports betting is the gaming activity of predicting sports results and placing a wager on the outcome. With the advancement of technology in Nigeria, sports betting services are now available online or through multiple technology-enabled distribution channels.
A 2020 Investigation by the News Agency of Nigeria revealed that about 60 million Nigerians between 18 and 40 years of age are actively involved in sports betting because of the high rate of poverty and unemployment, spending up to N1.8 billion on sports betting daily. Nigeria has an estimated population of around 200 million with about 65% of Nigerians being below the age of 35, who constitute the critical mass of the sports betting players.
The major players in the Nigerian sports betting business are Nairabet, Merrybet, Bet9ja, Naijabet, Lovingbet, Surebet247, Supabets, 1960bet, Nairastake, Parknbet, 360bet, Sportybet, Plusbet, Skybetnaija, 9jadollarbet, Visabet, Winnersgoldenbet, and few others.
2. Sports Betting Licence in Oyo State
Sport Betting business in Nigeria requires two licences: Federal licence and State licence. This article focuses on the State Licence of the Oyo State Government.
Please read more about the Federal Licence HERE.
Oyo State is a Southwestern State in Nigeria with about 28,454 square kilometers and the 5th most populous State of the country with estimated population of over 10,000,000. The State is bordered to the north by Kwara State, to the east by Osun State, and to the southwest by Ogun State and the Benin Republic. Oyo State capital, Ibadan is one of the ancient cities of the sub-Saharan Africa and the commercial hub of the old western region of Nigeria. Amongst other notable facts about Oyo State include being amongst the first State to enjoy free education under the late sage, Premier Obafemi Awolowo; and being the host to one of the oldest, largest and most respected tertiary institutions in Nigeria, the University of Ibadan, founded in 1932 (then as University College Ibadan).
Sports betting in Oyo State is regulated by the Oyo State Gaming Board. In Oyo State, there are Four (4) licensing categories for sport betting which are as follows:
(i) 1st Tier Licence – for an operator havingabove 100retail sport betting shops within Oyo State. Licence fee under this category is N10,000,000 and annual renewal fee is N5,000,000;
(ii) 2nd Tier Licence – for an operator licensed to operate 51 – 100 retail sport betting shops within Oyo State. Licence fee under this category is N7,500,000 and annual renewal fee is N3,500,000;
(iii) 3rd Tier Licence – for an operator with 1 – 50 retail sport betting shops. Licence fee under this category is N5,000,000 and annual renewal fee is N2,500,000;
(iv) 4th Tier Licence (Online Sports Betting) – for operator who wishes to operate sport betting strictly online. Operators with this licence are only expected to have an administrative office located within Oyo State and no retail sport betting shop is allowed to be opened by the licensee. This sport betting licence category is restricted to only online activities. Licence fee under this category is N3,000,000 and annual renewal fee is N1,500,000.
3. Requirements for Sports Betting Licence in Oyo State
An entity seeking to be licensed as a sport betting game operator must be incorporated with the Corporate Affairs Commission (“CAC”) with a minimum share capital of N20,000,000. See our article on the requirements for incorporation here.
The requirements for obtaining the sport betting licence in Oyo State are as follows:
(i)Application Letter: The application letter is addressed to Director General of Oyo state gaming Board;
(ii) Payment of Application/Processing Fee:The application fee for Sport betting, is N500,000 (Five Hundred Thousand Naira);
(iii) Documentation: the applicant is required to submit the certificate of incorporation and other incorporation documents of the company and a detailed business proposal on the proposed/existing sports betting schemes containing the following information:
(a) Business Structure detailing:
- Address of registered office, outlets and proposed branches.
- List and details of all directors and key management personnel.
Please NOTE that at least one director or management personnel must have experience in the gaming (Sport betting) industry.
- Tax clearance certificate of directors (at least one (1)) in the last one (1) year.
- Descriptions of operations and management structure
- SCUML certification and an analysis that demonstrates an understanding of the Oyo Gaming industry. The analysis must include the names of major players and market share.
- Current gaming licences held by the Applicant (if any)
- Advertising and distribution plans.
- Address of proposed office location, outlet (s) and branches (lock-up stalls- booths ONLY).
(b) Financial Structure detailing:
- Management account of your organisation.
- Bank statement of company for the last one (1) year in support of the financial plan.
- A five year projection on profit and loss account, balance sheet and cash flow analysis. This should be provided for licence fee and monthly gaming tax.
- Nature and magnitude of financing and capital investment. Indicate if foreign investment is involved in the business if any, the terms of investment.
- Capital budgets showing set up cost and asset schedule over 5 years.
(c) Details of Sport Betting Operations including:
- Details of planned games,
- Suitable sport activity,
- Approximate odds to be used,
- Prizes & price structure,
- Number and Frequency of sports/games
- Operator game rules and participants code of practice
- Accountable gaming policies.
(d) Financial Structure
- Management account of your organization
- Bank statement of company for the last one (1) year in support of the financial plan
- A five-year projection on profit and loss account, balance sheet and cash flow analysis. This should be provided for licence fee and monthly gaming tax.
- Nature and magnitude of financing and capital investment. Indicate if foreign investment is involved in the business if any, the terms of investment.
- Capital budgets showing set up cost and asset schedule over 5 years.
(e) Detailed information about the applicant’s bookmaker, betting sites and technical consultants.
(f) Detailed information on proposed/existing technical topography including a schematic diagram.
(g) Clearly illustrating the technical operational flow that includes:
- Architectural diagram clearly illustrating the technical operational flow
- Proposed/existing platform-self host or cloud based
- If cloud based, the contact information of the hosting company
- Details information on the type of servers to be used
- Detailed information of firewalls, routers and other security features
- Redundancy implementations (if any)
- Operating system
- Database application specification
- Process and System Quality Assurance
4. Ownership Requirement
It is important to note that a sport betting company cannot be wholly-owned by foreigners. Nigerians are required to hold at least fifteen percent (15%) of the shares in any foreign-owned companies, to achieve indigenous participation and local content requirement.
5. Estimated Costs
A breakdown of the applicable financial requirements for obtaining an OSB license can be found in the table below:
| Tiers of Licence | Incorporation Costs | Application Fee | Licence Fee | Renewal Fee |
| TIER 1 | N355,000 | N500,000 | N10,000,000 | N5,000,000 |
| TIER 2 | N355,000 | N500,000 | N7,500,000 | N3,500,000 |
| TIER 3 | N355,000 | N500,000 | N5,000,000 | N2,500,000 |
| TIER 4 (Online) | N355,000 | N500,000 | N3,000,000 | N1,500,000 |
The above are estimates only, there may be other applicable costs relating to documentation and miscellaneous expenses for the licensing process.
Also, sports betting licence of the National Lottery Regulatory Commission has not been added to the above, without which a sports betting company would not be incorporated by the Corporate Affairs Commission.
Please note that there is a requirement for the applicant company to provide a bank guarantee for the sum of N10,000,000.
6. Estimated Timeline
A gaming operator qualifies to be granted a gaming license from the Oyo State Gaming Board through the following process:
- The Gaming operator would write officially to the Board applying for any of the gaming License. The letter is addressed to the Director General of Oyo state gaming Board.
- Attached with the letter is the evidence of payment of Application fee, Incorporation documents, evidence of Bank guarantee of N10,000,000 and other required documents for the specified gaming license.
Note that unlike the procedure in other states which requires a gaming operator to first make an application before filing the required documents, in Oyo state a gaming operator can file alongside with the application letter all documents required for whichever gaming Licence applied for in this case for sport betting licence.
Upon submission of application and requirements (and payment of not less than 70% of the total licence fee), the Operator will be issued with a temporary licence called Approval in Principle (“AIP”), which will be valid for 90 days.
Thereafter, the Gaming Board requires a minimum of 10-14 working days to conduct due diligence on every application before issuing the substantive licence. The substantive licence will only be issued on fulfilment of ALL conditions for licence.
The Oyo State Gaming Board may advise the intending gaming operator to fast track the whole process by including a Gaming Laboratory International (GLI) certification. With the presentation of a GLI certificate, the timeline for inspection which ordinarily is expected to be between 10 to 14 days may be reduced to 5 to 7 working days. It is believed that the GLI authorities must have conducted an elaborate investigation on the activities of any gaming operator that has been issued with GLI’s certification.
All sports betting licences are renewable yearly.
7. Monthly Tax and Penalty for Non-Remittance
A monthly tax of 2.5% of monthly sales is payable to the Oyo State Gaming Board.
The Oyo State Gaming Board has set aside a penalty regime for all operators that fails to remit the following levies (licence/permit renewal, monthly/weekly tax, pools agent licences) as at when due. The penalty attracts a 1% fine of total amount due to the Board (i.e. renewal licence, monthly tax etc.) on a daily basis. The computation of penalty starts 24 hours after the date of expected payment. The penalty MUST be paid within a seven (7) day period upon receipt of letter of non-remittance to the operator. Failure to comply will result in possible suspension or revocation of operating licence.
Please read more about the Federal Licence HERE.
Also, you can read about Lagos Sports Betting Licence here.
About KORIAT & CO.
We are a growing commercial law firm in Lagos and Abuja. The above article is not legal advice and does not automatically make our readers our clients unless they specifically instruct us to act or represent them in any way.
Please contact Koriat & Co. through admin@koriatlaw.com or 09067842241 if you require additional information about or assistance in making the application for a money lender’s licence.
