In 2004, the Lagos State Government enacted the Lagos State Lotteries Law 2004. In 2007, the State Government also enacted the Casino and Gaming Regulatory Authority Law 2007, along with the Casino and Gaming Regulations 2008, the Pools Betting Control Law 2003, and the Pools Betting Tax Law 2003. In 2008, the Lagos State Lotteries Law 2004 was amended by the Lagos State Lotteries (Amendment) Law 2008.

In 2021, the Lagos State Government enacted the Lagos State Lotteries and Gaming Authority Law 2021. The long title of the 2021 Law describes it as: ?A law to establish the Lagos State Lotteries and Gaming Authority, to harmonise all laws relating to gaming activities in Lagos State, provide for the regulation and control of all gaming activities, and for connected purposes.?

Section 107 of the 2021 Law expressly repealed the Lagos State Lotteries (Amendment) Law 2008, the Lagos State Lotteries Law 2004, the Casino and Gaming Regulatory Authority Law 2007, the Casino and Gaming Regulations 2008, the Pools Betting Control Law 2003, and the Pools Betting Tax Law 2003.

From these repealed laws and regulations, it is evident that the Lagos State Government has, since 2003, asserted its legislative authority over matters connected with games of chance. Notably, the Lagos State Lotteries Law 2004 predates the now-nullified National Lottery Act of 2005. The Lagos State Lotteries Law 2004, with its 2008 amendment, alongside the other laws mentioned, remained in force in Lagos State until April 19, 2021, when the Lagos State Lotteries and Gaming Authority Law 2021 came into effect. The implication is that, since 2003, the Lagos State Government, through its laws, has regulated every aspect of gaming and lottery activities in the state, including control and taxation. The government, through its enforcement agencies, has consistently ensured compliance with all its gaming laws by individuals and corporate entities.

With the enactment of the National Lottery Act 2005 by the National Assembly ? which had nationwide application ? a jurisdictional dispute arose, leading to confusion among stakeholders in the gaming and lottery business, as they were caught between compliance with Federal law and Lagos State law.

Up until November 22, 2024 ? when the Supreme Court finally settled the matter by nullifying the entire provisions of the National Lottery Act 2005 as unconstitutional ? operators in the gaming and lottery industry appeared to comply with both the now-defunct Federal law and the Lagos State laws. For instance, obtaining a licence from the National Lottery Regulatory Commission (NLRC) was insufficient to operate or carry on gaming or lottery business in Lagos State without obtaining a corresponding licence from the Lagos State Government under the provisions of the Lagos State Lotteries and Gaming Authority Law 2021. In fact, Section 33(3) of the 2021 Law prohibits any person from operating or conducting any game of chance in Lagos State without obtaining a licence or authorisation from the Lagos State Lotteries and Gaming Authority.

In early 2024, the Lagos State Lotteries and Gaming Authority took stringent enforcement actions against gambling operators in the state who were identified as conducting gambling business or activities without proper licensing or authorisation from the state. Interestingly, many of the affected operators had been licensed by the now-defunct National Lottery Regulatory Commission under the National Lottery Act 2005. Earlier, in May 2020, the Lagos State Government had also declared certain gaming sites operating within the state illegal because they lacked a Lagos State issued licence, even though they were licensed by the NLRC, which had then claimed its licence had nationwide applicability.

The dispute over whether the Federal Government or State Governments had exclusive control over lottery and gaming regulation predates the Supreme Court?s November 22, 2024, decision. In 2005, the Lagos State Government filed an Originating Summons on February 2, 2005, before the Lagos State High Court against National Sports Lottery Ltd and National Sports Lottery Management Company Ltd. The state government sought:

1. A declaration that the respondents had no legal right to carry on, operate, or conduct any lottery business, by any name or mode, to members of the public in Lagos State without first obtaining a license issued by the Executive Governor of Lagos State under the Lagos State Lotteries Law 2004.

2. A perpetual injunction restraining the respondents, their agents, servants, and privies from conducting such business without obtaining a license from the state in accordance with the Lagos State Lotteries Law 2004.

The respondents challenged the jurisdiction of the Lagos State High Court through a preliminary objection. This jurisdictional challenge escalated through the appellate courts, eventually reaching the Supreme Court, which, in 2023, ruled in favor of the Lagos State High Court?s jurisdiction. The Supreme Court directed that the merits of the case be determined by the Lagos State High Court, affirming that it had jurisdiction over the issues raised in the case. The case is reported as ATTORNEY-GENERAL OF LAGOS STATE v. NATIONAL SPORTS LOTTERY LIMITED & ANOR (2023) LPELR-60359(SC)

Interestingly, while the appeal against the Court of Appeal?s verdict was still pending before the Supreme Court in 2008, the Lagos State Government, through its Attorney General, invoked the original jurisdiction of the Supreme Court pursuant to Section 232[1] of the Constitution to challenge the validity and constitutionality of the National Lottery Act 2005.

1. The Supreme Court Judgement and Its Implications

The Lagos State Government in 2008 invoked the original Jurisdiction of the Supreme Court to seek a resolution of the dispute between it and the Federal Government on the validity and enforceability of the National Lottery Act 2005, Cap. N 145 LFN 2004 within the territory of Lagos State. Being a constitutional matter, a full panel of the court comprising of seven Justices heard and determine it. In the suit the Lagos State Government sought the following declaratory and injunctive reliefs:

?A DECLARATION that lottery or game of chance is not one of the 68 items in the Exclusive Legislative List in Part I to the Second Schedule to the Constitution of the federal republic of Nigeria 1999 (as amended) (?the1999 Constitution) in respect of which the National Assembly has the vires to make laws for the whole of Nigeria and not incidental or supplementary to any matter mentioned in the list.

?A DECLARATION that having regard to the clear provisions of Section 4(2) and (3) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) (?the 1999 Constitution?) the National Assembly lacks the vires to legally and constitutionally make any law to regulate and control the operation of lottery in Nigeria.

?A DECLARATION that having regard to the clear provisions of Section 4(4) (a), (b) and Part II of the Second Schedule of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) (?the 1999 Constitution?, matters relating to lottery do not fall within items which the National Assembly and the state house of assembly are concurrently empowered to make laws with regard thereto.

?A DECLARATION that having regard to the clear provisions of Section 4(7)(a) and (c) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) the Lagos State Government (represented by the 1st Plaintiff) and the and 2nd ? 22nd Plaintiffs? State, have the power, to the exclusion of the 1st and 2nd Defendants, to make laws to regulate and control the operation of lottery within their states.

?A DECLARATION that having regard to the clear provisions of Section 4(4)(b), (7)(a) and Section 299(a) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) the power of the National Assembly to make laws to regulate and control the operations of lottery is limited by the 1999 Constitution to only the federal capital territory.

?A DECLARATION that Sections 17, 18, 19, 20 and 21 of the National Lottery Act N145, Laws of the Federation of Nigeria, made by the National Assembly are inconsistent with the provisions of the 1999 Constitution.

?A DECLARATION that the National Lottery Act, N145, Laws of the Federation of Nigeria is inconsistent with the provisions of the 1999 Constitution.

?AN ORDER nullifying Sections 17, 18, 19, 20 and 21 of the National Lottery Act, Cap N145, Laws of the Federation of Nigeria.

?AN ORDER nullifying the entirety of the National Lottery Act CAP N145, Laws of the federation of Nigeria.

?AN ORDER of perpetual injunction restraining the 1st defendant either by himself,

agents, privies, agencies of the Federal Government of Nigeria or Federation of Nigeria, or through anybody acting on their behalf from implementing the provisions of Sections 17, 18, 19, 20 and 21 of the National Lottery Act CAP N145, Laws of the Federation of Nigeria, within the territory of the States of the Plaintiffs.

?AN ORDER of perpetual injunction restraining the 1st Defendant either by himself, agents, privies, agencies of the Federal Government of Nigeria or Federation of Nigeria, or through anybody acting on their behalf from taking any step or actions aimed at enforcing or continuing to enforce any/or all of the provisions of the National Lottery Act CAP N145, Laws of the Federation of Nigeria, within the territory of the states of the plaintiff.

The Supreme Court granted all the reliefs.

The several questions raised in the suit may be summarised as;

Whether having regard to the provisions of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), the Federal Government through the National Assembly has any power to make laws on and/or regulate lotteries, gaming, and casino matters otherwise than within the Federal Capital Territory or on matters in the Exclusive and Concurrent Legislative Lists.

In resolving the issues raised in the suit, M.B IDRIS JSC who read the leading Judgement of the court adopted the issues formulated by the Defendant which read as follows:

Whether the National Assembly is competent to enact the National Lottery Act 2005 having regard to its legislative competence and powers as donated by Sections 4(2) (3) (4) (7) Section 16(1)(a)(b)(c) and 2(a), (a) and (b), Items 60(a) and 62(a) of the Exclusive legislative list as contained under Part 1 of the Second Schedule and Item 7 (a) of the Concurrent legislative list under Part 2 of the Second Schedule to the Constitution of the Federal Republic of Nigeria 1999 (as amended)?

In its landmark judgement, the Supreme Court unanimously held:

?I hold that lottery does not constitute ?trade and commerce? as envisaged under Item 62(a) of the Exclusive Legislative List as lottery is fundamentally a game of chance lacking the certainty, mutual exchange and reciprocity typically associated with trade and commerce. Unlike traditional commercial transactions involving a defined exchange of goods or services between parties, a lottery merely offers participants the prospect of winning without any assured return or specific value in exchange. Therefore, a lottery cannot be classified as ?trade and commerce? under the relevant item in the Exclusive Legislative List, as it fails to meet the criteria of an economic transaction involving the definite transfer of goods or services. Consequently, as lottery activities do not fall within the scope of ?commercial intercourse? as defined in AG OGUN STATE VS. ABERUAGBA & ORS 1985) LPELR ? 3164 (SC) and analysed above, does the National Assembly have the requisite vires to legislate on the subject matter of lottery??

The Supreme Court went further and held that:

?Lotteries neither constitute ?trade and commerce? as contemplated under Items 62(a) and (d) of the Exclusive Legislative List, nor do they qualify as an ?economic activity? within the meaning of Section 16(4)(b) of the Nigerian Constitution taking cognizance of the fact that neither did the term ?lottery? nor any closely related term appear explicitly in the Legislative List. It therefore follows that lotteries fall outside the legislative competence of the National Assembly. The National Assembly?s power to legislate is restricted to those powers expressly granted by the Nigerian Constitution particularly Section 4(2), (4)(a) and (b) of the Nigerian Constitution, a principle already discussed in detail in this judgment and not requiring further elaboration. I therefore hold that the National Lottery Act enacted by the National Assembly, exceeds its constitutional authority and is therefore ultra vires and unconstitutional?.

Accordingly, the Supreme Court invalidated the National Lottery Act 2005, ruling that the Federal Government, through the National Lottery Regulatory Commission (NLRC) has no power to regulate lottery or any other business involving game of chance. In addition, lotteries, gaming, and casino regulation are by virtue of Section 4(7) of the 1999 Constitution (as amended), matters within the exclusive legislative powers and jurisdiction of the states. The Supreme Court specifically ordered as follows;

An ORDER is made nullifying the entirety of the National Lottery Act CAP N145, Laws of the federation of Nigeria.

AN ORDER of perpetual injunction is made restraining the 1st Defendant either by himself, agents, privies, agencies of the Federal Government of Nigeria or Federation of Nigeria, or through anybody acting on their behalf from implementing the provisions of Sections 17, 18, 19, 20 and 21 of the National Lottery Act CAP N145, Laws of the Federation of Nigeria, within the territory of the States of the Plaintiffs.

AN ORDER of perpetual injunction is made restraining the 1st Defendant either by Himself, agents, privies, agencies of the Federal Government of Nigeria or Federation of Nigeria, or through anybody acting on their behalf from taking any step or actions aimed at enforcing or continuing to enforce any/or provisions of the National Lottery Act all of the provisions of the National Lottery Act CAP N145, Laws of the Federation of Nigeria, within the territory of the states of the plaintiffs.

It is instructive to note that, by virtue of Section 235 of the Constitution of the Federal Republic of Nigeria (CFRN), no appeal shall lie to any other body or person from any determination of the Supreme Court. Furthermore, Section 1(1) of the same Constitution proclaims its supremacy and the binding force of its provisions on all authorities and persons throughout the Federation. It is, therefore, a constitutional mandate for all authorities and persons to ensure full compliance with, and implementation of, the decisions of the Supreme Court. Any attempt to circumvent such decisions ? whether through legislative or executive overreach ? would be unconstitutional and a nullity.

It is in light of this that the ongoing attempt by the House of Representatives ? an arm of the National Assembly ? to resurrect the annulled National Lottery Act (NLA) through the proposed Central Gaming Bill 2025 must be critically examined. The Bill, which is the initiative of the current Deputy Speaker of the House of Representatives, Hon. Okezie Kalu, and six others, has reportedly passed its second reading on the floor of the House. Interestingly, the Bill seeks to repeal the National Lottery Act, 2005 and to regulate all forms of online and remote gaming across all geographical boundaries of the federating units.

I must state unequivocally that any law enacted by the National Assembly to regulate games of chance ? whether online or retail ? would be unconstitutional, null, and void in light of the provisions of Sections 4(2), 4(4)(a), and 4(4)(b) of the Constitution. These provisions limit the legislative competence of the Federal Government to making laws for the peace, order, and good government of the Federation or any part thereof only in relation to matters contained in the Exclusive Legislative List (as set out in Part I of the Second Schedule) and matters contained in the Concurrent Legislative List (as set out in the First Column of Part II of the Second Schedule to the Constitution), as well as any other matter over which it is expressly empowered by the Constitution.

The Supreme Court has made it unequivocally clear ? and it is now settled law ? that games of chance fall outside the legislative competence of the Federal Government and are exclusively within the legislative authority of the federating states. In furtherance of this, Section 4(7)(a) of the Constitution empowers the House of Assembly of each state to make laws for the peace, order, and good governance of the state or any part thereof concerning any matter not included in the Exclusive Legislative List. Matters that are neither in the Exclusive nor the Concurrent Legislative List are commonly referred to as residual matters, and they are constitutionally allocated exclusively to the states. Lottery and other games of chance fall within this category. The Central Gaming Bill 2025 is, therefore, ultra vires the legislative powers of the House of Representatives.

Even more troubling is the fact that the Bill proposes to repeal the already annulled National Lottery Act of 2005. This raises a fundamental question: Is the House of Representatives, by this Bill, constituting itself into an appellate body over a final decision of the Supreme Court, notwithstanding the clear provisions of Section 235 of the Constitution? The answer is obvious ? such an action is entirely unconstitutional. The National Assembly is a creation of the Constitution and derives its authority and powers from it. It must, therefore, conform to, respect, uphold, and implement all the provisions of the Constitution to the letter. It cannot act in negation of, or in defiance of, the Constitution.

It is, therefore, my humble submission that the Central Gaming Bill 2025, being unconstitutional, should be discarded, and all legislative work on it should be set aside. I take this opportunity to call on the Honorable Attorney General of the Federation, as the Chief Law Officer of the Country, to advise the National Assembly on the unconstitutional nature of this Bill and the necessity of respecting the decision of the Supreme Court.

Key Takeaways from the Judgment:

The National Lottery Act 2005 is null and void. The entirety of the National Lottery Act 2005 has been nullified.

The National Lottery Regulatory Commission (NLRC) has no legal authority over lottery operations in any state of the Federation. The NLRC by the Judgement ceases to exist.

Licenses, permits, and approvals previously issued by the NLRC for operations are no longer valid.

Each state now has exclusive legislative and regulatory authority over lottery operations and Games of Chance within its jurisdiction. In Lagos State the law applicable now is the Lagos State Lotteries and Gaming Authority Law 2021 Operators must now comply with individual state laws and obtain licenses from respective state governments.

The National Lottery Trust Fund (NLTF), which was funded through contributions from lottery operators under the annulled Act, no longer has a legal basis to demand payments from lottery businesses. By the Judgement of the Supreme Court, the National Lottery Trust Fund has been abolished.

Federal laws on lottery taxation, licensing, and compliance enforcement have become unenforceable in the states.

The judgement no doubt has ushered in a new regulatory era, where businesses must navigate a decentralized lottery regulation framework, creating both challenges and opportunities for industry players. Note that the following States who were also plaintiffs in the suit have enacted laws to regulate Lotteries and Gaming Business within their territories; Lagos, Ondo, Oyo, Ekiti, Ogun, Rivers, Cross Rivers, Imo, Abia, Enugu, Edo, Delta and others.

The Legal Status of Licenses and Permits Issued by the NLRC

1. All licenses/permits issued by the NLRC to lottery operators have been invalidated by the judgment.

2. Businesses operating lotteries under previous NLRC licenses must now obtain licenses from the state(s) where they operate.

3. Telecommunications operators and Value-Added Service (VAS) aggregators that relied on NLRC-issued permits for lottery-based promotions must now comply with state laws.

4. Existing lottery businesses must apply for new state-specific licenses.

5. Operators without valid state licenses risk sanctions or business shutdowns by state regulatory authorities.

6. VAS aggregators and telecoms operators must ensure compliance with new state-level lottery regulations.

Impact on Mobile Lottery, Mobile Gaming, and Chance-Based Promotions via Telecom Platform

1. Telecom-based lottery services (e.g., SMS-based lotteries, mobile gaming, and chance-based promotions) must now comply with State laws.

2. The uniform national licensing system is no longer valid, leading to fragmented regulations across different States.

3. States may impose different taxes, licensing fees, and compliance requirements, increasing the regulatory burden on telecom operators.

4. Operators must obtain state licenses for each State they operate in.

5. Telecom partnerships with lottery providers must now consider State-by-State compliance risks.

6. Some States may impose stricter regulations or ban lottery services entirely.

The Immediate Impact on Telecommunications and VAS-Based Lottery Operations

The Nigerian telecommunications industry plays a pivotal role in lottery operations, particularly through Mobile Network Operators (MNOs) and Value-Added Services (VAS) providers. These entities facilitate the deployment of mobile-based lottery services, SMS gaming, and digital raffle draws, sports betting, casino, pool betting, etc, enabling millions of Nigerians to participate in lottery activities.

Prior to this judgment, lottery operators, VAS aggregators, and MNOs operated under a unified national regulatory framework, securing approvals from the NLRC and the Nigerian Communications Commission (NCC). However, following the Supreme Court?s decision, this single framework no longer exists, and operators must now comply with different state regulations.

As we all know, VAS Providers which are companies that create and deliver digital content, mobile applications, and interactive services that run on telecom networks, they enable lottery operators, gaming companies, and digital service providers to offer lottery games, SMS-based promotions, mobile gaming, and interactive contents to consumers. Examples of VAS Providers in the Lottery Industry includes where a lottery company partners with a VAS provider to offer SMS-based lottery tickets, a gaming company uses a VAS provider to enable mobile-based betting and interactive games, a TV show runs a lottery draw where participants enter by sending an SMS via a VAS provider?s platform.

A VAS Aggregator on the other hand is a company that acts as an intermediary between VAS Providers and Telecom Operators. Instead of every VAS provider negotiating directly with mobile network operators (MTN, Airtel, Glo, 9mobile), aggregators streamline connections by managing multiple VAS services on behalf of telecoms. Major telecoms often act as VAS aggregators, meaning they provide the infrastructure for third-party VAS providers to deliver services through USSD, SMS, or mobile apps. For instance, MTN or Airtel may not develop a lottery or gaming service but hosts third-party VAS providers offering gaming content through its platform. Vas Aggregators therefore enable telecom subscribers to participate in lottery games via SMS, USSD, IVR (Interactive Voice Response), or mobile apps. They also handle billing, content delivery, and user engagement for lottery and gaming services and also ensure regulatory compliance with telecom policies and state laws

Impact of the Supreme Court Judgment on VAS Providers and Aggregators

Since lottery operations are now exclusively regulated by states, the Judgement has the following implications for VAS Providers and Aggregators:

Compliance With State-Specific Lottery Regulations

1. VAS providers must now obtain licenses from individual states rather than relying on an NLRC-issued permit which is no longer valid.

2. VAS aggregators must ensure that all lottery services comply with state laws before offering them via telecom networks.

3. Each state may impose its own lottery rules, taxes, and compliance requirements, making operations more complex for VAS providers.

4. Operators must secure multiple licenses if they want to offer lottery services in multiple states.

5. Existing Agreements between VAS providers, aggregators, and telecom operators based on the nullified National Lottery Act 2005 must now be reviewed on state-by-state basis.

6. VAS companies must renegotiate contracts to align with state laws.

Legal and Compliance Strategy

1. Engage legal experts to conduct a compliance audit.

2. Apply for licenses in each state where lottery services will be offered.

3. Ensure telecom partners are aware of the new legal framework.

4. Negotiate State-specific agreements with telecom operators.

5. Develop alternative service models that comply with state laws.

6. Monitor State lottery regulations to stay updated on compliance requirements.

Major Compliance and Operational Challenges for Telecom-Based Lottery Services

1. There is a risk of inconsistent regulatory approaches across different States, leading to operational complexity.

2. The absence of a unified licensing regime could lead to increased compliance costs and potential legal disputes.

These challenges necessitate a new strategic approach to regulatory compliance and business continuity in the lottery and telecom sectors.

3. Business Continuity: Strategic Responses to the Shifting Regulatory Landscape

To successfully adapt to this new regulatory reality, MNOs, VAS providers, and lottery operators must proactively implement strategies that ensure seamless operations while complying with state-specific laws.

(A) Legal and Regulatory Compliance

1. Conduct a comprehensive regulatory audit to identify states where lottery operations are active and determine the applicable licensing requirements.

2. Engage legal and regulatory experts to develop a robust compliance framework tailored to multiple state laws.

3. Monitor evolving State-level lottery regulations and anticipate future amendments.

4. Establish direct engagement channels with state governments to facilitate compliance and licensing approvals.

(B) Licensing and Operational Adjustments

1. Apply for and obtain State-level lottery licenses where required.

2. Develop State-compliant lottery products to align with diverse regulatory requirements.

3. Implement a centralized compliance management system to track and ensure adherence to multiple state regulations.

(C) Policy Advocacy and Industry Collaboration

1. Engage the Nigerian Governors? Forum (NGF) and State Legislators to push for harmonized state lottery regulations.

2. Work collectively as an industry to advocate for standardized licensing and operational guidelines.

3. Encourage the Federal Government to explore constitutional amendments that may provide a more unified approach to lottery regulation.

By taking these proactive steps, industry players can minimize legal risks, ensure regulatory compliance, and sustain business operations despite the shifting legal landscape.

4. Shaping the Future of Lottery Regulation in Nigeria

The Supreme Court Judgement presents both regulatory uncertainty and an opportunity for positive transformation in the lottery sector. The way forward must be collaborative, involving:

State governments creating clear and investor-friendly regulations.

Industry players working together to develop best practices and compliance strategies.

A coordinated approach to regulatory engagement to prevent excessive fragmentation.

Recommended Legal and Regulatory Actionable Steps

To minimize operational disruptions and ensure compliance, lottery businesses, telecom operators, and VAS providers should take the following steps:

Short-Term Recommendations

1. Conduct an immediate legal audit of all lottery-related operations.

2. Engage legal experts to assess compliance risks in each state.

3. Identify States with existing lottery laws and apply for relevant licenses.

4. Renegotiate tripartite agreements between telecoms, VAS providers, and lottery operators.

Long-Term Recommendations

1. Work with State Governments to support the passage of clear and business-friendly lottery regulations.

2. Advocate for a possible harmonized State-level licensing framework to reduce administrative complexity.

3. Engage in compliance training for internal legal and operational teams.

4. Monitor ongoing developments, including any possible legislative amendments at the Federal or State level.

This period of transition should be seen not just as a challenge but as an opportunity to create a more sustainable and efficient lottery industry.

5. Conclusion

The post-National Lottery Act era requires all stakeholders to think differently, act strategically, and collaborate effectively. We must ensure that the telecommunications and lottery sectors remain viable, innovative, and legally compliant under this new decentralized regulatory framework.

The judgement though creates significant challenges for market players but it also presents an opportunity for State Governments to establish clearer and more competitive regulatory frameworks. Businesses must swiftly adapt to these changes to ensure continued operations while minimizing legal and compliance risks. (Vanguard)

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