Contributor: Janeth Udoka
Introduction
The Supreme Court, in a landmark judgment on November 22, 2024, invalidated the National Lottery Act 2005 (NLA), which had established the National Lottery Regulatory Commission (NLRC) to oversee lottery operations nationwide. The ruling resolved a longstanding jurisdictional conflict by affirming that the regulation of lotteries and games of chance falls exclusively under the authority of state governments. This decision clarifies the legal framework for lottery regulation in Nigeria and has significant implications for both state and federal authorities.
This article examines the Supreme Court’s ruling and its practical implications for lottery regulation in Nigeria[1].
The Dual Regulatory Framework
The National Lottery Act (NLA), enacted in March 2005, established the National Lottery Regulatory Commission (NLRC) to oversee and regulate lottery operations across Nigeria. However, some states maintained their own regulatory frameworks, arguing that the constitutional authority to regulate lotteries belonged exclusively to state governments, not the federal government. This led to jurisdictional conflicts over lottery regulation. These state-level regulatory frameworks predated the enactment of the National Lottery Act (NLA) and were in place in Lagos, Akwa Ibom, Anambra, Cross River, Delta, Imo, Ogun, Ondo, Oyo, and Rivers States. Consequently, following the enactment of the NLA, a dual regulatory system emerged, leading to uncertainty among operators who were often subject to overlapping compliance obligations at both the federal and state levels.
Background to the decision
In 2008, the Lagos State Government invoked the original jurisdiction of the Supreme Court of Nigeria, seeking, among other reliefs, a declaration that, pursuant to the express provisions of Sections 4(2), (3), and 4(7)(a) & (c) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) (“CFRN”), which confer legislative authority on State Houses of Assembly over matters not listed in the Exclusive Legislative List, the National Assembly lacks the constitutional competence to regulate or control lottery operations nationwide, as ‘lottery’ is a residual matter.
Consequently, Lagos State urged the Supreme Court to invalidate the National Lottery Act (“Lottery Act”) on the ground of inconsistency with the CFRN and sought a perpetual injunction restraining the Federal Government of Nigeria, along with its agents and agencies, from enforcing the provisions of the Lottery Act within Lagos State.
The Supreme Court, in a unanimous ruling on November 22, 2024, upheld Lagos State’s position, declaring the National Lottery Act inapplicable in all states. The judgment limits its operation to the Federal Capital Territory (FCT), where the National Assembly has legislative authority[2].
A view of the The Supreme Court’s Decision in A.G. Lagos State & Ors v. A.G. Federation & Ors
In 2008, Lagos State, along with several other states (the Plaintiffs), instituted Suit No: SC/1/2008 – Attorney General of Lagos State & Ors v. Attorney General of the Federation & Ors (the “Suit”) against the Attorney General of the Federation, the National Assembly, and certain other states (the Defendants)[3]. The lawsuit contested the constitutionality of the NLA and the legitimacy of its continued application and enforcement. The plaintiffs’ argument was based on the principles of federalism enshrined in the Constitution of the Federal Republic of Nigeria, 1999 (as amended) (the “Constitution”). Under the Constitution, legislative powers are allocated between the federal and state governments through the Exclusive and Concurrent Legislative Lists. The Exclusive Legislative List comprises matters over which the National Assembly has the authority to legislate for the entire country, while the Concurrent Legislative List includes matters on which both the National Assembly and the State Houses of Assembly have concurrent legislative competence. Any subject matter not expressly provided for in either list falls within the residual legislative jurisdiction of the states and lies beyond the legislative authority of the National Assembly, except concerning the Federal Capital Territory[4].
The Plaintiffs contended that, since lotteries and related activities are not expressly provided for in either the Exclusive or Concurrent Legislative Lists, the National Assembly lacked the legislative competence to regulate them and, therefore, exceeded its constitutional authority in enacting the National Lottery Act (NLA). Consequently, they sought a declaration nullifying the NLA on the ground that it is inconsistent with the provisions of the Constitution.
In response, the Defendants argued that lotteries fall within the purview of trade and commerce, which is expressly listed under the Exclusive Legislative List, thereby conferring legislative authority on the National Assembly to regulate such activities[5], as the process entails the exchange of tickets and the distribution of prizes across multiple states, typically facilitated through electronic means, it falls within the legislative competence of the National Assembly. Likewise, the Defendants contended that the Federal Government is vested with the authority to promote and enforce economic objectives, a function to which the issuance of national licenses is inherently aligned. Furthermore, the Defendants asserted that state-issued licenses are confined to their respective territorial jurisdictions, whereas the NLA provides a more effective regulatory framework at the national level.
The Supreme Court, in a unanimous ruling on November 22, 2024, declared that the National Assembly lacks the authority to regulate lotteries and games of chance, as they are not listed under the Exclusive or Concurrent Legislative Lists. The Court further held that lotteries do not qualify as trade or commerce since they involve speculation rather than an assured exchange of value. It also clarified that economic activities, as defined by the Constitution, pertain to tangible goods and services, excluding lottery and gaming.
As a result, the Court granted the reliefs sought by the Plaintiffs, including the nullification of the National Lottery Act for being unconstitutional. It further declared that the power to regulate and control lottery operations resides exclusively with the states, to the exclusion of the federal government and the National Assembly.
Implications of the decision
The primary implication of this decision is that the judgment of the Court of Appeal in Nigeria Employers Consultative Association (NECA) & Anor v. Attorney General of the Federation & Ors remains binding and continues to have legal effect[6] (the NECA Case), where the Court of Appeal had upheld the validity of the National Lottery Act, no longer represents the law[7]. Accordingly, the decision of the Supreme Court in Attorney General of Lagos State v. Attorney General of the Federation is immediately enforceable across the Federal Republic of Nigeria pursuant to Section 287(1) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), which stipulates that: “The decisions of the Supreme Court shall be enforced in any part of the Federation by all authorities and persons, and by courts with subordinate jurisdiction to that of the Supreme Court.”
The second implication of the Supreme Court’s decision is that the National Lottery Act can no longer have general applicability across the Federal Republic of Nigeria as it previously did. Its operation is now restricted to the Federal Capital Territory (FCT), which falls within the exclusive legislative competence of the National Assembly.
Third, National Lottery Regulatory Commission (“NLRC”) which is an institution established further to the Lottery Act[8] the National Lottery Regulatory Commission (NLRC) shall no longer exercise regulatory authority beyond the Federal Capital Territory (FCT) or over entities and businesses operating outside the FCT. Henceforth, the NLRC shall be limited to issuing licenses solely to lottery companies and businesses that operate or intend to operate within the FCT. Consequently, all previously issued licenses to lottery companies operating outside the FCT are hereby annulled.
Fourth, the respective States of the Federation, which possess legislative authority over residual matters and were previously unable to regulate lottery businesses within their jurisdictions, are now empowered to enact laws governing the operation of such businesses within their territories.
Fifth, lottery businesses and companies shall be mandated to obtain the requisite licenses and permits from the respective States in which they operate, except for entities conducting operations within the Federal Capital Territory (FCT) that have already secured licenses from the National Lottery Regulatory Commission (NLRC) to operate within the FCT.
Further, companies involved in lottery business will no longer be required to pay 7% of their net proceeds as lottery tax to the Federal Government stipulated under the Lottery Act[9], except for entities operating within the Federal Capital Territory (FCT), lottery businesses are now required to remit taxes in accordance with the applicable state laws governing lottery operations and to the respective state governments.
Furthermore, the Supreme Court’s decision stands as the final and binding authority on the matter, with no possibility of appeal. Consequently, the ruling must be enforced by all relevant authorities and individuals unless or until the National Assembly amends the Constitution to expressly place lottery regulation under the Exclusive or Concurrent Legislative List[10].
Conclusion
The Supreme Court’s ruling affirms that lottery regulation is solely within state governments’ legislative authority, resolving jurisdictional conflicts and reinforcing federalism. States can now regulate and tax lottery businesses without federal interference. To ensure smooth operations, states should establish clear regulatory frameworks, and operators must comply with state laws. If a unified framework is needed, the National Assembly may amend the Constitution. This decision brings legal clarity and strengthens state autonomy in Nigeria’s gaming industry.
REFERENCE
- Aelex: Regulation of Lotteries in Nigeria: Review of the Supreme Court’s Decision and its Implications available at https://www.aelex.com/regulation-of-lotteries-in-nigeria-review-of-the-supreme-courts-decision-and-its-implications/ Accessed February 2025. ↑
- TEMPLARS Client Alert: Supreme Court Declares National Lottery Act Invalid: Implications on Lottery Businesses in Nigeria available at https://www.templars-law.com/app/uploads/2024/11/Client-Alert-Supreme-Court-Declares-National-Lottery-Act-Invalid.pdf Accessed February 2025. ↑
- Subsequently, all other states of the federation were joined as parties to the suit. ↑
- Ibid. ↑
- Item 62 of the Exclusive Legislative List. ↑
- (2021) LPELR-. 54042 (CA). ↑
- In that case, the Court of Appeal held that item 62 of the exclusive list which mentions “trade and commerce” contemplates lottery. ↑
- See section 1 of the Act. ↑
- Section 35A of the National Lottery (Amendment) Act 2017. ↑
- In Boye v. Adeyeye (2012) 12 NWLR (Pt. 1314) 357, it was held that “The finality of the decision of the Supreme Court in civil proceedings is absolute unless specifically set aside by a later legislation. ↑
