Tax on Winnings in Nigeria

What the law says now

Gambling winnings in Nigeria are taxed at 5%. The Nigeria Tax Act 2025, signed on 26 June 2025 and in force from 1 January 2026, applies a 5% withholding tax to winnings from lottery and gaming — 15% for non-residents — and the deduction is made before the money reaches you. Your stake is not taxed: the Act exempts money staked on games of chance from VAT.

The mechanism was already drafted before the Act. Withholding tax regulations gazetted on 2 October 2024 and effective from 1 January 2025 listed winnings from lottery, gaming and reality shows among the payments subject to deduction at source, at 5% for residents and 15% for non-residents. The Tax Act then put the treatment of gaming income on a statutory footing from the start of 2026.

Enforcement arrived in Lagos on 20 February 2026, when the Lagos State Lotteries and Gaming Authority directed licensed online operators to deduct 5% of players' net winnings at the point of payout and remit it to the Lagos State Internal Revenue Service. No threshold was announced with the directive — the deduction applies to the payout, not only to large ones.

Sitting behind all of this is the Supreme Court judgment of 22 November 2024, which struck down the National Lottery Act 2005 outside the Federal Capital Territory and confirmed that games of chance are for the states to regulate. That is why the rule that reaches your account is a Lagos rule applied by a Lagos-licensed operator, rather than a single federal one.

Swipe sideways to see the whole table

Sources: Nigeria Tax Act 2025 (signed 26 June 2025, effective 1 January 2026) and professional commentary on it; Deduction of Tax at Source (Withholding) Regulations gazetted 2 October 2024; LSLGA directive reported 20–23 February 2026; Supreme Court judgment of 22 November 2024. Operator-side figures are as reported in the trade press in August 2026 and are not taken from a regulator's own publication.

A payout, with the numbers filled in

Take a straightforward case. You stake ₦5,000 on a slot session and finish with ₦100,000 in the account, then request a withdrawal.

1. Your net winnings are ₦95,000 — the ₦100,000 returned less the ₦5,000 you put in.
2. The operator deducts 5% of that: ₦4,750.
3. ₦95,250 is sent to your bank — the ₦100,000 balance less the deduction.
4. Your bank applies the ₦50 electronic transfer stamp duty on the credit, because it is over ₦10,000.
5. ₦95,200 is what you can actually spend.

Scale that up and the shape stays the same: a ₦1,000,000 payout on a ₦20,000 stake loses ₦49,000 to the withholding tax. Scale it down and the deduction becomes small enough to ignore — which is exactly why it makes more sense to withdraw in fewer, larger transfers than in a stream of small ones.

The terms, defined plainly

Withholding tax

Tax collected by the person paying you rather than by you afterwards. The operator holds back the percentage and sends it to the revenue service in your name. You do not file anything for it at the moment of payout, and you do not get to choose the timing.

Net winnings

What you finished with, less what you staked. The Lagos directive applies the 5% to net winnings, which is why the stake is subtracted before the percentage is taken.

Stake

The money you put at risk. Under section 185(m) of the Nigeria Tax Act 2025, money, stakes or securities wagered on games of chance are exempt from VAT, so nothing is added to your deposit.

Gross gaming revenue

The operator's side of the ledger: total stakes less total winnings paid out. Operator taxes are charged on this, not on your balance, and they are separate from the 5% taken off your payout.

Resident and non-resident

The withholding regulations set 5% for residents and 15% for non-residents on winnings. Residence here is a tax concept, not the country your SIM card is from.

Six things people get wrong

• "Winnings are tax-free in Nigeria"

  That was the practical position for years, and it stopped being true on 1 January 2026. The 5% is now taken before the money reaches you.

• "The operator pays it, not me"

  Operators do pay their own taxes on gaming revenue and their own licence fees. The 5% withholding is a separate deduction, taken from your payout.

• "It only hits big wins"

  No threshold was announced with the Lagos directive. If there are net winnings at payout, the deduction applies.

• "VAT is charged on my stake"

  It is not. The Act specifically exempts money staked on games of chance from VAT — one of the few things in the 2026 package that moved in the player's favour.

• "An offshore site avoids the whole thing"

  An unlicensed site removes the deduction and also removes your recourse: no state licence, no local regulator to complain to, no obligation to pay you at all. It does not remove your own tax position, and it is a bad trade.

• "The NLRC licenses everyone, so the rules are federal"

  Since November 2024 the states hold that power outside the Federal Capital Territory. Bet9ja's own footer prints NLRC licence numbers 0001074 / 00000014 together with an LSLGA licence — the Lagos licence is the one that carries the payout rule.

Why a 5% line matters more than it looks

Five percent of a payout sounds small next to a house edge of three or four percent per spin, but the two are charged on completely different bases. The house edge applies to turnover — every naira you stake, over and over. The withholding applies once, to what you take out. For a player who deposits ₦20,000 a month and rarely withdraws, it is almost invisible. For anyone who cycles money in and out regularly, it adds up quickly.

Three practical consequences:

• Fewer, larger withdrawals. Each transfer also carries the ₦50 stamp duty, and several small payouts mean several deductions instead of one.
• Bankroll maths changes slightly. When you plan a target, plan it net. A ₦500,000 target is ₦475,000 in the bank before the transfer levy.
• Keep your own record. Deposits and withdrawals, one line a month. If a deduction ever looks wrong, the account statement is the only argument you have.

There is also a quieter reason to care: a correctly applied deduction is a signal. An operator taking 5% at payout and remitting it is an operator inside the licensed system, which is precisely the kind you want holding your balance. If you are timing a withdrawal around this, our withdrawal timing page covers the other half of the question, and the payday planner covers the budgeting side.

When this page does not apply to you

Plenty of situations sit outside what is described above, and pretending otherwise would not help anyone.

• You are not 18. Gambling in Nigeria is for adults. Nothing on this page is relevant to you.
• You are not resident in Nigeria. The withholding regulations set 15% for non-residents, and your home country may tax the same money again.
• You play with an operator licensed in another state. The Lagos directive binds Lagos licensees. Other states run their own regimes under the post-2024 framework, and the detail differs.
• Your situation is complicated. Professional gambling, business income, large or unusual payouts, or anything involving several jurisdictions needs an adviser, not a casino guide. Start with the Nigeria Revenue Service or the Lagos State Internal Revenue Service .
• You want a number for a specific operator's deduction. We publish what is in the law and in the regulators' announcements. What any individual account shows on any given day is between you, your operator and your statement.

Tax on winnings — FAQ