The enormous popularity of betting in Nigeria should be harnessed to improve society. Taxes from the revenue this industry enjoys could benefit healthcare.
Nigeria, like many other countries in Africa and around the world, has been hit hard by the novel coronavirus COVID-19 pandemic. But the country was facing a very different crisis long before the first reported COVID-19 case in December 2019. Gambling has been an ongoing problem for some time now and it poses as great a risk to public health.
A Spike in Popularity
Before the pandemic took hold, gambling in Nigeria enjoyed a massive upsurge. This is due to a steep increase in internet access, mobile phone penetration, online payment options, and regulations around advertising being liberalised. This period was also identified by a shift from more traditional forms of gambling, like that at land-based casinos, in national lotteries, and in pools to online sports betting and casino games.
And while the gambling industry has suffered its share of losses due to COVID-19, it’s likely that the effort to rebuild will take the form of an even stronger push to increase access to outlets online.
Participation levels in this industry in Nigeria hints at the chance of a real problem emerging. Studies have found that as many as 36% of the population have gambled and 53% of these do so daily. It’s reported that well over 70% of Nigerian youths frequently bet and gamble as well.
How high these numbers are should come as no surprise when one takes into account the unfettered freedom operators enjoy regarding advertisements and promotions. The huge sponsorships delivered in the reality show Big Brother Naija by Bet9ja in 2019 and Betway in 2020 attest to this.
Gambling Related Harm
Policymakers in the post-COVID-19 landscape will have to contend with the negative outcomes of betting, broadly referred to as Gambling Related Harm. It’s driven by the very rapid rise in gambling opportunities online. It’s been posited that revenue from this industry can be made to serve binary objectives by using it not solely as a source of income but as a deterrent too. This kind of revenue should be grouped alongside similar dangerous elements to society, like alcohol, high-sugar foodstuffs, and tobacco products. And, consequently, be assigned the job of providing extra support for healthcare in Nigeria.
Operators in the gambling industry argue that their products should be classified as mere entertainment, on the level of watching films and attending Football games. Many disagree, however, and it can be said that the rising number of GRH justifies the latter position.
GRH can take many forms but almost all will affect society as a whole rather than just individuals. The types include financial difficulties being encountered, relationships being disrupted, and emotional and psychological distress being inflicted on gamblers and the circles they move within. The list could go on, but the point is that GRH is a far more significant issue than the one which Problem Gambling traditionally refers to.
A Source to Drive Universal Health Coverage
Gambling and betting revenue is already widely recognised as a source of financing for sports in many countries. Nigeria has stated that the goal of its current level of medical care is Universal Health Coverage, but public financing for this project is as limited as it is indispensable. Action needs to be expedited on strategies that will increase the amount of spending on total health care coming from public financing.
Nigeria has one of the lowest public financing totals in the world, with 2017 levels reported at just 0.5% of its gross domestic product being spent on public health. This is markedly lower than the regional average of 2.4% as well as the average for its income group, 2.8% and the economic effect of COVID-19 might see it drop even more.
The huge revenue generated by sports betting operators more than reflects the massive increase in participation of Nigerians in the industry. It is estimated that roughly 60 million people between the ages of 18 and 40 years are spending as much as ₦1.8 billion daily, a number which becomes an astonishing ₦653 billion each year.
Data from 2016 reveals that the most popular betting operators in this country are managing a monthly turnover of US$10 million. Mid-ranked brands are averaging a turnover of between US$3 million and US$3 million and US$5 million, with a 20% to 30% margin on profit. A 2018 PWC report revealed that Nigeria has the second-largest online gambling market in Africa. The Gross Gaming Revenue stands at US$58 million and is predicted to rise by 16% over the next 5 years.
It’s vital to note that the revenue which this industry has managed to tap into comes from a demographic that has thus far failed to be reached by the government. 60% of the Nigerian economy is in the informal sector, which is where most bettors hail from. It’s being argued that gambling taxes aren’t doing much for the poor and that new levies should take this into account.
Proposed Reforms of Gambling Tax Policies in Nigeria
It hardly needs to be argued that the judicial framework which governs gambling in Nigeria must be revisited and updated. This is the only way to protect vulnerable citizens.
- Operators should be limited to responsible advertising and marketing only.
- Because gambling, in general, should be discouraged in the interest of protecting society as a whole, an appropriate tax rate needs to be introduced. This income could then be used to improve social welfare systems.
- Regulatory bodies need to be given the power to mandate obligations for operators to connect to online surveillance systems like that of the CBN or FIRS. This would ensure that real time, appropriate information, including fiscal data, could be obtained.
- The National Lottery Trust Fund, from section 35 of the National Lottery Act, sets out the method of achievement for national development goals. It says that this can only be done via the provision of access to Lottery funding for good causes. But the opaque distribution of funds by the NLTF more than make the case for far more explicit measures to be introduced in terms of sectoral earmarks.
- Economic capital generated from gambling and betting taxation should be set aside for desirable social purposes like UHC. The Basic Health Provision Fund of the National Health Act of 2014 provides the channel for this to be implemented.
