Lagos Calls the Telecom Companies to Account

Regulators in Lagos State, Nigeria, have asked telecom operators to help check gambling businesses. Image credit: Nairametrics

In Lagos, a bet often begins with a string of USSD digits or a text message that deducts money from a phone balance. Now, the state government wants the telecom companies handling these channels to explain: are the gambling companies at the other end actually licensed, and have they paid their taxes?

The Lagos State Lotteries and Gaming Authority (LSLGA) recently issued a notice requiring mobile network operators including MTN, Airtel, Globacom and T2 (formerly 9mobile), along with licensed value-added services (VAS) providers, to verify the licensing and tax compliance of all gambling businesses operating through their platforms within 30 days. Nigerian financial news outlet Nairametrics, The Guardian Nigeria and others began reporting the news on October 14. Some reports also mentioned a regulatory request for transaction records, but that detail appears only in isolated secondhand accounts and has not been verified.

Accounts differ on the date of the notice, with both October 12 and 13 cited. In an analysis published on October 19, local law firm Stren & Blan Partners used October 13 and said the notice was intended to “clarify” the licensing and tax obligations within the state of gambling operators and telecom service providers facilitating gambling and lotteries. The original notice could not be obtained for this article.

The significance of this order needs to be considered within Nigeria’s regulatory landscape. In late 2024, the Supreme Court ruled that the federal National Lottery Act could not extend to gambling regulation within the states, shifting authority decisively toward the state level. Lagos is the country’s largest gambling market, and the LSLGA has stepped up enforcement over the past two years. Short codes, USSD top-ups and deductions from phone balances have always been among the telecom-based activities that regulators find hardest to see clearly.

Now, the telecom operators have been pushed into a gatekeeping role. To protect themselves, they may well simply disconnect access for unlicensed businesses or those with unpaid taxes. Companies holding only a federal licence, without a Lagos State licence, are in the most awkward position. If the requirement for transaction records does materialise, the state government will also gain a much clearer picture of the industry’s true scale.

The 30-day deadline falls around mid-November. Whether the first list of disconnected businesses emerges then, and whether other states copy this approach, are the next two things to watch.

Sources

• Nairametrics: https://x.com/Nairametrics/status/2110430634661298523
• The Guardian Nigeria: https://x.com/GuardianNigeria/status/2110643086451937351
• Stren & Blan Partners: https://x.com/Strenandblan/status/2112184025469124722
• Note: The original LSLGA notice was not obtained, and the “transaction records” requirement has not been verified.