The Nigerian Tax Act 2025 delivers a major win for gaming and lottery operators by explicitly exempting “stakes” from Value Added Tax. Under Section 185, Subsection M, the law lists money, stakes, and securities, along with any interest on them, as fully exempt from VAT.
It defines a stake simply as the amount wagered in a game, ensuring that core betting transactions are exempt from this tax. This change brings long-awaited clarity to an industry plagued by confusion.
Operators can now confidently update their pricing and systems, knowing wagers themselves won’t trigger VAT charges. PwC highlights how this aligns with core VAT principles, which generally exempt pure money transfers such as those in betting from taxation.
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While stakes dodge VAT, the Act’s Section 62 keeps lottery and gaming profits firmly under corporate income tax. Businesses can still deduct payouts to winners, agent commissions, and regulatory fees when calculating taxable income.
Gaming now spans all gambling and wagering, from traditional bets to digital pursuits like video poker and slots. Lotteries include any mix of skill and chance, even those linked to real or virtual sports events.
This setup underscores the government’s focus: tax the profits from gaming operations, not the initial cash bets. PwC urges operators to draw clear lines between exempt stakes and taxable extras, such as service fees or platform charges, to sidestep disputes with authorities.
The exemption arrives amid Nigeria’s booming digital gaming scene and heightened regulatory attention. Past FIRS guidelines and tax pushes had sparked debates over staking taxes, but this reform paves the way for smoother compliance and growth for licensed players.
