HOW TO OBTAIN A REMOTE OPERATOR PERMIT TO PROVIDE ONLINE GAMING SERVICES IN NIGERIA

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Sandra Eke

 

  1. INTRODUCTION

A Remote Operator Permit is issued by the National Lottery Regulatory Commission (NLRC)2 to companies operating a gaming business outside Nigeria and are desirous of providing facilities for gaming to players in Nigeria online or via any other means of remote communication.3 Such companies are permitted to apply for the Permit if they already possess a valid gaming license issued to them by their regulators in a jurisdiction deemed to be acceptable by the NLRC.4 Once the Permit is issued, the company is expected to maintain the same high standards of operation and safety towards players in Nigeria as it accords players in its home country.5 It is also supposed to uphold the same policies and procedures intended to promote socially responsible gaming towards players in Nigeria as it does under its foreign gaming licence.6 Prospective applicants are expected to comply with the Remote Operator Permit Terms and Conditions issued by the NLRC and ensure that its existing Player Terms and Conditions as approved under its foreign gaming licence is reviewed and approved by the NLRC before being published on its Nigerian website.7

The Permit is valid for a 5-year renewable period and is subject to the payment of an annual renewal permit fee to the NLRC.8 To qualify for the grant of a Nigerian Remote Operator Permit, foreign companies are required to successfully complete the NLRC permit approval process administered by its managed services provider and utilize its best endeavours to work with organisations approved by the NLRC that deliver methodologies to detect and prevent excessive gaming.9

  1. SCOPE OF THE REMOTE OPERATOR PERMIT

Once the Nigerian Remote Operator Permit is issued, it authorizes an Operator to do the following:

  1. Advertise online gaming services to players in Nigeria including the publishing of print mediasubject to the advertising conditions set by NLRC;10
  2. Offer casino games, bingo, slots, sports betting, and poker online game to players in Nigeria;11
  3. Utilize payment services made available through NLRC’s dedicated system;12
  4. Fully repatriate its revenue/funds from Nigeria provided that tax due and payable on player deposits have first been settled through the dedicated system of the NLRC and to Federal Inland Revenue Service of Nigeria (FIRS);13
  5. Subscribe to affiliate programs.14

It should be noted that the Permit exempts a Foreign Operator from the requirement of incorporating/establishing its local subsidiary in Nigeria provided that it completes a Non- Residence Registration Request to the FIRS, which can be completed through NLRC’s dedicated system.15

Failure to comply with the terms and conditions of the Remote Operator Permit could result in immediate revocation of the Permit by NLRC and a breach of responsible and underage gaming conditions may result in NLRC placing such Operator in the Remote Operator Blacklist, which will permanently restrict the company’s ability to re-apply for a Permit.16

    1. APPLICATION FOR A REMOTE OPERATOR PERMIT

    Prospective applicants seeking to obtain a Remote Operator Permit are required to complete an application form and pay a non-refundable application fee to NLRC. When filing the Form, they are expected to furnish the Commission with the following information, in addition to any other requested information/document:

      1. Particulars of the Applicant: Company Name, Company’s Foreign Registration Number and Gaming License details, Brand/Trade Name, Administrative Office Address and Branch Address(es) if any, Company’s website etc.
      2. Particulars of the Company’s Contact Person: Such as, their name, email address, designation, phone number etc.
      3. Profile of the directors of the Company etc.

    NLRC’s general approval process comprises of three (3) phases: the application stage, the Pre-approval phase and Post-approval phase. The application fee for the Remote Operator Permit covers the cost of conducting due diligence on an applicant and its foreign gaming licence to ascertain whether the operator is fit and proper to provide remote gaming services to players in Nigeria. Upon receipt of the application, NLRC will review the application and where necessary, ask the applicant to provide additional information/documentation for further review. An applicant will be notified of the status (approval or rejection) of the application upon the conclusion of the review period. Successful applications will proceed to the permit issuance process, after all requirements for the Permit has been met. It is noteworthy that any misrepresentation or supply of false information to NLRC is a ground for revoking the permit.

    A holder of a Remote Operator Permit is required to pay an Annual Permit Fee of $100, 000 to the Federal Republic of Nigeria via the NLRC TSA Government Account. This fee is subject to amendment by NLRC from time to time. The Permit holder will also be required to pay to the NLRC and FIRS a tax on all player deposits (‘Player Deposit Tax’) received and held by them from players in Nigeria. The amount of taxation payable shall be as published on the regulator’s website and subject to amendment from time to time.

    If an authorized Operator is desirous of applying for the re-issuance or extension of the commencement of its permit, it is expected to give prior notice to the NLRC and such re-issuance or extension is at the discretion of the Commission.

        1. COMPLIANCE WITH TECHNICAL REQUIREMENTS

    A Remote Operator Permit holder is required to comply with the following technical requirements as stipulated by the NLRC before it can provide its services in Nigeria:

        1. Use a Nigerian facing URL to ensure that all player transactions emanating from Nigeria originate through or are diverted to that URL. Its approved URL shall be as agreed and tested by the NLRC in the Permit Approval process.
        2. Integrate with the Commission’s Sentinal System as the only payment gateway through which Player transactions from Nigeria are settled including tax due to the Nigerian Government and employ suitable geo-restriction and/or ring-fencing methodologies to ensure that players in Nigeria do not migrate onto other gaming URL’s or sites offered by the Operator.
        3. Ensure that only Players located in Nigeria register on its Nigerian facing URL and all necessary third-party data consent to the provision and sharing of such player data is contained in its Data Privacy Policy published on the Company’s website.
        1. CONCLUSION

    The introduction of a Remote Operator Permit by the NLRC marks a significant stride towards regulating the burgeoning virtual gaming activities of foreign companies in Nigeria. It is a laudable mechanism to generate revenue for the government and improve the overall growth and development of the Nigerian economy. This regulatory action not only ensures a safer and more secure remote gaming environment for players but also opens avenues for responsible industry growth. To procure this Permit and ensure proper compliance, foreign remote gaming service providers can seek the assistance of local legal experts well versed in the operations of the Nigerian gaming industry and gaming legislations, for support.

    _____________________________________________

    For further information on this article and area of law,
    Please contact Sandra Eke at:
    S.P.A. Ajibade & Co., Lagos by
    Telephone (+234 1 472 9890), Fax (+234 1 4605092)
    Mobile: (+234.811.249.1286, +234.703.385.7874)
    Email: seke@spaajibade.com
    www.spaajibade.com

    Footnote

      1. Sandra Eke, Associate, Intellectual Property and Technology Department, S.P.A. Ajibade & Co, Lagos, Nigeria.
      2. The NLRC was created pursuant to the National Lottery Act (2005) CAP N145, LFN 2010.
      3. NLRC, “Remote Operator Permit Application Guide” available at: https://nlrc-gov.ng/remote-gaming-description/ accessed 28th November 2023.
      4. Ibid.
      5. See Art. 1 Remote Operator Permit Terms and Conditions.
      6. See Art. 6(a) Remote Operator Permit Terms and Conditions. In addition, foreign applicants for a Remote Operator Permit are expected to have a Data Privacy Policy published on their Nigerian facing website that is compliant with the provisions of the Nigerian Data Protection Regulations. See Art. 4(e) Remote Operator Permit Terms and Conditions.
      7. See Art. 4(a) Remote Operator Permit Terms and Conditions.
      8. NLRC, “Remote Operator Permit Application Guide” available at: https://nlrc-gov.ng/remote-
      9. gaming-description/ accessed 29th November 2023.
      10. Ibid.
      11. NLRC, “Remote Operator Permit Application Guide” available at: https://nlrc-gov.ng/remote-gaming-description/ accessed 9th December 2023.
      12. Ibid.
      13. Ibid.
      14. Ibid.
      15. Ibid.
      16. Ibid.
      17. Ibid.
      18. Ibid.
      19. See NLRC’s General Application Form, available at: https://nlrc-gov.ng/wp-content/uploads/2023/03/NLRC_APPLICATION_FORM.pdf accessed 9th December 2023. Please note that additional information may be requested for Remote Operator Permit Applicants, given the unique nature of the Permit.
      20. Ibid.
      21. Ibid.
      22. NLRC, “General Guidelines,” available at: https://nlrc-gov.ng/guidelines/ accessed 10th December 2023.
      23. This due diligence is carried out by NLRC’s managed service provider and it is part of its Dedicated System’s registration process.
      24. NLRC, “General Guidelines,” available at: https://nlrc-gov.ng/guidelines/ accessed 10th December 2023.
      25. Ibid.
      26. Ibid.
      27. NLRC, “Remote Operator Permit Application Guide” available at: https://nlrc-gov.ng/remote-  gaming-description/ accessed 9th December 2023
      28. Ibid.
      29. See Art 3(b) Remote Operator Permit Terms and Conditions.
      30. NLRC, “General Guidelines” available at: https://nlrc-gov.ng/guidelines/ accessed 11th December 2023.
      31. See Art. 2 Remote Operator Permit Terms and Conditions.
      32. Ibid.
      33. Ibid.

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