Is Gaming Licence Transferable in Nigeria?

The question of whether an existing gaming licence can be transferred in Nigeria is a significant one for investors eyeing the country's burgeoning gaming sector. Adick Joshua Adick highlights this issue, outlining the broader implications for market entry, mergers and acquisitions, and consolidation. The Lagos State Lotteries and Gaming Authority Law, 2021 provides a clear framework for such transfers, outlining the process and the authority's role in facilitating them.

Section 45 of this law stipulates that a transfer requires the applicant's consent and outlines the procedural protections, including the right to contest refusal and the responsibility for any liabilities that may transfer with the licence. This regulatory provision is crucial as it allows investors to consider market entry strategies beyond the conventional process of establishing a new gaming entity.

However, the transfer of a gaming licence is not a simple commercial transaction. The existing licence is a regulatory authorization and not an ordinary asset that can be freely assigned. This means that the transferee assumes not only the benefits but also the liabilities of the existing licensee, making due diligence an essential step in any proposed transaction.

The attractiveness of an existing licence acquisition should be balanced with the need for thorough due diligence to uncover any potential issues such as outstanding regulatory fees, tax liabilities, AML/KYC compliance, and other compliance concerns. The regulatory approach in other Nigerian states, including Enugu, also reflects a trend toward establishing transfer mechanisms, indicating a broader shift in the sector.

For international investors, this means that while a licence transfer is feasible, it is not universally applicable across jurisdictions. Each regulatory environment has its specific requirements, necessitating a tailored approach to market entry strategies.