Like in most countries, the COVID-19 pandemic has harmed the Nigerian population and its economic activities. In addition, it has spurred some silent changes in consumer behaviour that will have socio-economic effects. One of such unnoticed transformations is the growth of the gambling and betting sector during the COVID-19 pandemic period.
According to the Nigeria Sports Betting Sector Report 2019/2020, nearly 60 million Nigerians between the ages of 18 and 40 years are involved in active betting. Almost USD 2 billion are spent daily on sports betting. Over the last decade, anecdotal and empirical evidence suggests a nexus between an increase in active bettors and an increase in smartphone and internet subscription usage.floeli-alm.de Yet, there is another salient feature driving the upsurge in betting. It is the steady rise of the unemployment rate and the demand for betting driven by it. Access to smartphones, advert placement, and the urge to have an extra source of income has increased as well. So, to what extent did betting surge? And what are the cost and benefits of betting?
What the data tells usIn comparison to prior data on engagement in gambling/betting activities, an online polling survey conducted by NOIPolls, 2019 and Data Source, 2021, show that there has been a 9 % increase in the number of people engaged in betting and gambling since 2017. Around 7% to 25 % of consumers claim to have engaged in betting a few times per week. Similarly, the daily rate of in betting activities increased significantly from 1 % in 2017 to 9 % in 2021. The data also confirms that smartphone usage has augmented considerably over the last decade. It shows that more than 99% of respondents attested to owning a smartphone before the COVID-19 pandemic.
The debate that unemployment is a critical driving force for betting remains a recurring social issue. As such, the growing unemployment rate and underemployment have significantly contributed to an increase in betting behaviours. In the UK fixed odds betting (FOBTs) was more common among unemployed blackspots relative to more affluent constituencies. In the city of Aba, Nigeria, unemployment was a key driver of increased betting. At 33.3% for Quarter 4 in 2020, the unemployment rate in Nigeria has been projected to rise even further. This estimated growth in joblessness hinges on the adverse effect of Covid-19. Given this rate and the rise in betting activities, how can the Nigerian betting sector be regulated?
A potential revenue source for the StateAlthough the industry is relatively large compared to similar sectors, its potential is yet to be fully explored. Aware of its capacity in Nigeria to create employment opportunities, through the National Lottery Regulatory Commission, the government is in a position to design and implement reforms that would help regulate the bettors.
With the influx of foreign and domestic firms into the sector, an increase in the average GDP growth rate is expected over time. As highlighted in a recent study, the UK gambling industry contributes about 0.6 % of GDP.kinwiki.me Although unlikely to have a significant macroeconomic impact, it seems it could be an alternative revenue source for the Nigerian economy.
Further, with the emergence of several online betting platforms, government policies around e-business space will be essential towards curbing potential gambling hazards, regulating start-up gambling firms, and closing the gap created by illicit gambling activities.
For instance, in 2014, the UK government reformed its Betting (Licensing and Advertising) Act. Its purpose was to regulate the online casinos market. Through this Betting act, online casinos were required to pay a 15% consumption tax and obtain a license from the Betting Commission before commencing operations. It is highly recommended to replicate similar government actions in the Nigerian space.
Alternatively, government actions targeting sector development and efficient allocation of resources should channel profits from unclaimed betting wins to struggling economic sectors, such as education and health. Similarly, percentage cuts (or tax policies) on profits from claimed betting wins provide an additional source of revenue to the government.arbitragesoftware.net These actions are expected to stimulate selected sector growth and regularize the fast-growing betting industry.