Suit claims federal officials flouted the law and undermined state sovereignty

“We view this as a legal matter and a consumer protection matter and there is also a fiscal interest for the state,” said Maryland Lottery and Gaming director John Martin."

he recent Supreme Court judgment in Attorney- General Of Lagos State & Ors V. Attorney-General Of The Federation & ORS (SC/01/2008) has significantly altered the legal and regulatory framework governing lottery operations in Nigeria. The decision, which invalidated the National Lottery Act 2005, has raised pressing concerns about compliance, regulatory oversight, and the continued operation of lottery services, particularly within the telecommunications and Value-Added Services (VAS) sectors.

It is imperative that we critically examine the implications of this judgement, the challenges it poses for industry operators, and the pathways toward ensuring regulatory compliance and business continuity. The task is not just to understand the judgment but also to develop proactive solutions that will ensure stability and sustained growth in the lottery and telecommunications industries.

State of the Regulatory Regime Before the Supreme Court Judgement.

In 2004, the Lagos State Government enacted the Lagos State Lotteries Law 2004. In 2007, the State Government also enacted the Casino and Gaming Regulatory Authority Law 2007, along with the Casino and Gaming Regulations 2008, the Pools Betting Control Law 2003, and the Pools Betting Tax Law 2003. In 2008, the Lagos State Lotteries Law 2004 was amended by the Lagos State Lotteries (Amendment) Law 2008.

In 2021, the Lagos State Government enacted the Lagos State Lotteries and Gaming Authority Law 2021. The long title of the 2021 Law describes it as: “A law to establish the Lagos State Lotteries and Gaming Authority, to harmonise all laws relating to gaming activities in Lagos State, provide for the regulation and control of all gaming activities, and for connected purposes.”

Section 107 of the 2021 Law expressly repealed the Lagos State Lotteries (Amendment) Law 2008, the Lagos State Lotteries Law 2004, the Casino and Gaming Regulatory Authority Law 2007, the Casino and Gaming Regulations 2008, the Pools Betting Control Law 2003, and the Pools Betting Tax Law 2003.

From these repealed laws and regulations, it is evident that the Lagos State Government has, since 2003, asserted its legislative authority over matters connected with games of chance. Notably, the Lagos State Lotteries Law 2004 predates the now-nullified National Lottery Act of 2005. The Lagos State Lotteries Law 2004, with its 2008 amendment, alongside the other laws mentioned, remained in force in Lagos State until April 19, 2021, when the Lagos State Lotteries and Gaming Authority Law 2021 came into effect. The implication is that, since 2003, the Lagos State Government, through its laws, has regulated every aspect of gaming and lottery activities in the state, including control and taxation. The government, through its enforcement agencies, has consistently ensured compliance with all its gaming laws by individuals and corporate entities.

With the enactment of the National Lottery Act 2005 by the National Assembly—which had nationwide application—a jurisdictional dispute arose, leading to confusion among stakeholders in the gaming and lottery business, as they were caught between compliance with Federal law and Lagos State law.

Up until November 22, 2024—when the Supreme Court finally settled the matter by nullifying the entire provisions of the National Lottery Act 2005 as unconstitutional—operators in the gaming and lottery industry appeared to comply with both the now-defunct Federal law and the Lagos State laws. For instance, obtaining a licence from the National Lottery Regulatory Commission (NLRC) was insufficient to operate or carry on gaming or lottery business in Lagos State without obtaining a corresponding licence from the Lagos State Government under the provisions of the Lagos State Lotteries and Gaming Authority Law 2021. In fact, Section 33(3) of the 2021 Law prohibits any person from operating or conducting any game of chance in Lagos State without obtaining a licence or authorisation from the Lagos State Lotteries and Gaming Authority.

In early 2024, the Lagos State Lotteries and Gaming Authority took stringent enforcement actions against gambling operators in the state who were identified as conducting gambling business or activities without proper licensing or authorisation from the state. Interestingly, many of the affected operators had been licensed by the now-defunct National Lottery Regulatory Commission under the National Lottery Act 2005. Earlier, in May 2020, the Lagos State Government had also declared certain gaming sites operating within the state illegal because they lacked a Lagos State issued licence, even though they were licensed by the NLRC, which had then claimed its licence had nationwide applicability.

The dispute over whether the Federal Government or State Governments had exclusive control over lottery and gaming regulation predates the Supreme Court’s November 22, 2024, decision. In 2005, the Lagos State Government filed an Originating Summons on February 2, 2005, before the Lagos State High Court against National Sports Lottery Ltd and National Sports Lottery Management Company Ltd. The state government sought:

1.A declaration that the respondents had no legal right to carry on, operate, or conduct any lottery business, by any name or mode, to members of the public in Lagos State without first obtaining a license issued by the Executive Governor of Lagos State under the Lagos State Lotteries Law 2004.

2.A perpetual injunction restraining the respondents, their agents, servants, and privies from conducting such business without obtaining a license from the state in accordance with the Lagos State Lotteries Law 2004.

The respondents challenged the jurisdiction of the Lagos State High Court through a preliminary objection. This jurisdictional challenge escalated through the appellate courts, eventually reaching the Supreme Court, which, in 2023, ruled in favor of the Lagos State High Court’s jurisdiction. The Supreme Court directed that the merits of the case be determined by the Lagos State High Court, affirming that it had jurisdiction over the issues raised in the case. The case is reported as ATTORNEY-GENERAL OF LAGOS STATE v. NATIONAL SPORTS LOTTERY LIMITED & ANOR (2023) LPELR-60359(SC)

Interestingly, while the appeal against the Court of Appeal’s verdict was still pending before the Supreme Court in 2008, the Lagos State Government, through its Attorney General, invoked the original jurisdiction of the Supreme Court pursuant to Section 232[1] of the Constitution to challenge the validity and constitutionality of the National Lottery Act 2005.

1.The Supreme Cout Judgement and Its Implications

The Lagos State Government in 2008 invoked the original Jurisdiction of the Supreme Court to seek a resolution of the dispute between it and the Federal Government on the validity and enforceability of the National Lottery Act 2005, Cap. N 145 LFN 2004 within the territory of Lagos State. Being a constitutional matter, a full panel of the court comprising of seven Justices heard and determine it.   In the suit the Lagos State Government sought the following declaratory and injunctive reliefs:

•A DECLARATION that lottery or game of chance is not one of the 68 items in the Exclusive Legislative List in Part I to the Second Schedule to the Constitution of the federal republic of Nigeria 1999 (as amended) (“the1999 Constitution) in respect of which the National Assembly has the vires to make laws for the whole of Nigeria and not incidental or supplementary to any matter mentioned in the list.

•A DECLARATION that having regard to the clear provisions of Section 4(2) and (3) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) (“the 1999 Constitution”) the National Assembly lacks the vires to legally and constitutionally make any law to regulate and control the operation of lottery in Nigeria.

•A DECLARATION that having regard to the clear provisions of Section 4(4) (a), (b) and Part II of the Second Schedule of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) (“the 1999 Constitution’, matters relating to lottery do not fall within items which the National Assembly and the state house of assembly are concurrently empowered to make laws with regard thereto.

•A DECLARATION that having regard to the clear provisions of Section 4(7)(a) and (c) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended)  the Lagos State Government (represented by the 1st Plaintiff) and the and 2nd  – 22nd Plaintiffs’ State, have the power, to the exclusion of the 1st and 2nd Defendants, to make laws to regulate and control the operation of lottery within their states.

•A DECLARATION that having regard to the clear provisions of Section 4(4)(b), (7)(a) and Section 299(a) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) the power of the National Assembly to make laws to regulate and control the operations of lottery is limited by the 1999 Constitution to only the federal capital territory.

•A DECLARATION that Sections 17, 18, 19, 20 and 21 of the National Lottery Act N145, Laws of the Federation of Nigeria, made by the National Assembly are inconsistent with the provisions of the 1999 Constitution.

•A DECLARATION that the National Lottery Act, N145, Laws of the Federation of Nigeria is inconsistent with the provisions of the 1999 Constitution.

•AN ORDER nullifying Sections 17, 18, 19, 20 and 21 of the National Lottery Act, Cap N145, Laws of the Federation of Nigeria.

•AN ORDER nullifying the entirety of the National Lottery Act CAP N145, Laws of the federation of Nigeria.

•AN ORDER of perpetual injunction restraining the 1st defendant either by himself,

 agents, privies, agencies of the