Africa at risk of becoming gaming industry’s dumping ground

Sudhanshu Ranjan January 21, 2025
Africa at risk of becoming gaming industry’s dumping ground

The African gaming market is at a crossroads, with growth in opportunities and an increase in threats on the same side of the scale. As the market grows, illegal operators, fragmented regulations, and the lack of a unified regulatory framework cast a long shadow over the industry. According to Bashir Are (pictured above), CEO of the State Lotteries and Gaming Authority in Lagos, Nigeria, issues concerning the continent’s gambling can only be solved through cross-border collaboration.

Rise of illegal operators in Africa

Illegal gambling operations have sprouted all over the continent, threatening the viability of legal markets. These illegal operators not only avoid paying taxes but often exploit people, bringing the whole industry into disrepute. Africa’s gambling landscape is marked by a patchwork of laws varying from country to country. This lack of uniformity poses significant challenges for enforcement, making it difficult to establish a cohesive front against illegal activities.

Bashir Are highlighted the urgent need for cross-border collaboration. Without unified efforts, the fight against illegal gambling is destined to falter. Are emphasised the necessity of partnerships that span regulatory bodies and law enforcement agencies across Africa.

“Twenty, thirty years ago, Africa was a dumping ground for toxic waste from all over the world. I think we are experiencing that now in the gaming sector too,” Are said during a panel discussion titled ‘Navigating the Illegal Market: Cross-Jurisdictional Challenges in Identification & Enforcement’ in ICE Gaming Industry Conference in Barcelona, reported by Next.io.

Lessons from global jurisdictions

Countries such as the Philippines can offer relevant experiences and lessons. They managed to suppress illegal gambling substantially by cutting the tax for licensed operators and enhancing coordination among law enforcers. A similar set of approaches applied to the African region might achieve similar results.

Gilbert Remulla from the Philippine Amusement and Gaming Corporation (PAGCOR) shared his experiences in how the country addressed a black market that had once taken 90 percent of gambling transactions. He said that through implementing lower taxes for regulated operators, enforcing strict regulations, and conducting outreach programs, they were able to reduce this figure to below 50 percent. Bashir Are agreed, noting that Lagos is also adopting similar strategies.

Are further stated, “For example, Lagos State has a bilateral agreement with the country of Botswana. So, if you are illegal in Lagos State, and you have a licence in Botswana, we can both enforce that, and we’re doing that with so many jurisdictions right now. If there’s no collaboration, there’s no way you can fight illegal gambling.”

The success of cross-border collaboration, such as the bilateral cooperation between Lagos and Botswana, is a testament to the possibility of collective actions. Such partnerships strengthen enforcement capabilities and make illegal operations riskier to undertake.

Incentives through effective taxation policies are essential for encouraging compliance. For example, Lagos has enacted laws that make offshore operators providing services to local customers state customers, hence legally obligated to pay taxes.

Are commented on taxation policies, “Our laws now state that even if you operate offshore, if you have players in Lagos, they are considered state customers. If you don’t pay taxes on those customers, it’s a criminal offence.

The role of technology in gambling

Technology is a double-edged sword in the gambling industry. It offers tools for regulation and monitoring but also supports illegal operations. It is, therefore, necessary to have a strong technological infrastructure that supports regulatory frameworks.

Lagos State’s introduction of B2B licences seeks to close the compliance gap between suppliers. The state hopes to create a more responsible gambling environment by holding operators and suppliers accountable.

Are concluded, “We found without B2B licences, suppliers have no obligation to ensure compliance or responsible practices.”

Promoting responsible gambling is critical in mitigating the negative impacts of gambling. Initiatives that educate and protect players can help foster a healthier gambling culture. Standardised laws across Africa would simplify enforcement and ensure a level playing field for operators. However, achieving such standardisation is a complex task that requires significant coordination and consensus-building.

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