The Lagos State High Court rules that the FG lacks Authority to issue license and regulate lotteries and gaming within the Federating States

On the 8th day of November 2022, Hon. Justice O. Atinuke Ipaye of the High Court of Lagos State, Ikeja Division delivered a Judgement with respect to the suit between the Lagos State Lotteries and Gaming Authority Vs. Shade International Gaming Ltd & Anor, Suit No: LD/49089GCM/2021 stating that “the Federal Government cannot through the National Assembly legislate on any issue not contained on either the Exclusive and Concurrent Legislative List”, thus, the National Lottery Regulatory Commission (NLRC) lacks the powers to license and regulate lotteries and gaming Companies operating in any State across the country.

This decision was as a result of the suit initiated by the Lagos State Lotteries and Gaming Authority (Applicant) against two illegal Operators, that is, Shade International Gaming Ltd (trading under the name and style of Betika) and Neomobile Entertainment Limited, over their refusal to obtain license from the Authority before Commencing Operations within Lagos State. The refusal of the Respondents was hinged on the fact that they have been licenced by the NLRC and need not regularize their gaming Operation within Lagos State.

The originating summons was brought pursuant to Order 5 Rule 4 (2) and Order 5 Rule 5 of the 2019, High Court of Lagos State Civil Procedure Rules 2019 and Sections 19, 35, 86 and 96 of the Lagos State Lotteries and Gaming Authority Law 2021, the agency raised two questions for the Court’s determination;

“Whether the failure of the firms to obtain lotteries and related gaming activities license from the agency as required by the Lagos State Lotteries and Gaming Authority Law 2021, while carrying on the business of lotteries and related gaming activities in Lagos State is not unlawful.”

“Whether the agency can compel the firms to pay appropriate registration fees for obtaining license and other statutory remittances for carrying on the business of lotteries and related gaming activities in Lagos State as stipulated by the Lagos State Lotteries and Gaming Authority Law 2021”.

In compliance with the Rules of the High Court, the Originating Processes were served on the Respondents. Despite the hearing notice issued by the Court, the Respondents failed and or refused to file a response to the Originating processes, thus, the Applicant was granted leave to move its summons.

During the adoption of argument, the Counsel representing the Applicant argued that the Applicant is statutorily established by the Lagos State Lotteries and Gaming Authority Law 2021 to license and regulate lotteries and gaming activities within Lagos State, thus, it is an illegality for the Respondents not to obtain the relevant licence before commencing their business within Lagos State, whether online, virtual or physical. Counsel argued further that ‘lotteries and related gaming activities are items on the Residual Legislative List’ and as such only the State Houses of Assembly can validly legislate on gaming matters and that the National Assembly through the National Lottery (Amendment) Act 2017, has usurped the powers of the states to legislate on lotteries and related gaming activities, which amounts to a flagrant disregard of the provision of Section 4 of the Constitution of the Federal Republic of Nigeria 1999 (as amended).

In delivering the judgement, the Court aligned itself with the Applicant’s Counsel submission and stated that Matters relating to lottery, betting, gaming and other related connected activities are not specified or contained in either the Exclusive or Concurrent Legislative List, therefore leading to the inevitable conclusion that the National Assembly cannot legislate on such matter. Also, the court relied on several Judicial precedents, particularly, the case of Edet V. Chagoon & Anor (2008) 2 NWLR (pt. 1070) @ 85 esp. @ 103 para C-E,

Consequently, the following reliefs, among others were granted by the court:

“A declaration be and is hereby made that the failure of the 1st and 2nd Respondents to obtain the lotteries and other related gaming activities license from the Applicant as required by the Lagos State Lotteries and Gaming Authority Law 2021, while carrying on the business of lotteries and related gaming activities in Lagos State is unlawful.”
“A declaration be and is hereby made that the Applicant herein compel the 1st and 2nd Respondents to pay the appropriate registration fee and other statutory remittances for carrying on the business of online lotteries and other related gaming activities in Lagos State.”
“A declaration be and is hereby made that the 1st and 2nd Respondents cannot continue in the business of lotteries and other related gaming activities in Lagos State without obtaining appropriate license from the applicant”.
“A declaration be and is hereby made that the 1st and 2nd Respondent have been carrying on the business of lotteries and other related gaming activities illegally in Lagos State”.
“An Order be and is hereby made that 1st and 2nd respondents shall each pay the statutory registration fee to obtain license for conducting lotteries and other related gaming activities in Lagos State”.
“An order be and is hereby made directing the 1st and 2nd respondents to each pay all outstanding statutory remittances owing and due from the commencement of their respective business operations to the date of judgment, 8th November 2022.