Since he took over the reins as the head of the Lagos State Lotteries Board (LSLB) in October 2019, he has worked assiduously to sanitize the gaming industry in Lagos and to increase revenue for the state for use in developmental projects. In this interview with Joy Okosieme, Bashire Are, Chief Executive Officer of the LSLB, shares his experience on the job with a special focus on efforts his organization is making to sanitize the gaming industry. Excerpts
You have been in the saddle since last October, how challenging has the job been?
If whatever you are doing is not challenging, it is not worth wasting time on. We look for challenges and we solve the problems to move the society forward socially, economically, and otherwise.
We deal with the operators; we deal with the punters and also deal with the issue of addictive gambling or other sorts of addictions. That’s why if you see our slogan, it says, “we promote, we protect and we regulate”. So, as challenges come, we sit down and find a strategy to move forward.
One challenge that no one saw coming was the COVID-19. How has the pandemic affected the lottery board and life generally?
Well, as you can see nobody saw the pandemic coming, therefore, we were all caught unawares. Incidents like this come once or twice in a century, so, nobody prepared for it or envisaged it would be very near. No doubt, it has affected our operators, as you know sports betting is based on football, horse racing, basketball, formula 1 and all sort of sports. So, everything was shut down to the extent that they shut down the Vatican City, the King of Saudi shut down Mecca for Umrah. You can see the magnitude of what is going on but on the other hand, as a businessman; there is what insurance people call force majeure. Anything unexpected can happen, which is why that kind of risk is factored into a business.
In other climes we have witnessed budget adjustment, what kind of revenue cut are you proposing?
We are not proposing a revenue cut but revenue diversification in our sector. We have encountered about 455% revenue loss during the lockdown because everything about gaming and betting was virtually closed down. But innovation came out of it as most operators decided to go into virtual gaming. So, that really augmented the capacity to absorb the shock.
In your introductory comment, you talked about the LSLB promoting, protecting, and regulating. However, one challenge faced by LSLB is the surge in underage betting. What have you done to stem this ugly tide?
Thank you for your wisdom; it is a concern for me. My first major project when I got this appointment was the underage gambling campaign. I was appointed in October last year and by November, we did a huge campaign against underage gambling and we sanctioned some of the erring operators and also introduced a training programme for agents on ‘Know Your Customer’ (KYC) as prescribed by the CBN for financial and non-financial institutions. There is a ‘know your customer policy’ (KYC) from CBN, which will help identify underage bettors. Operators must make sure that whoever is coming to bet is 18 years old or more. We also printed huge stickers that must be posted conspicuously in every betting centre. Additionally, we covertly go into betting shops to bet and if you don’t ask for identification, then we can sanction you almost immediately.
In other countries like the UK and the USA, even if you have gray hair and you want to buy alcohol, they ask you for your ID. So, that’s how we are tackling underage betting. We also have some non-profit organizations that partner with us to go around schools to talk against excessive gambling, underage gambling, alcohol addiction, and others.
Are there any palliatives for operators as we have witnessed in other parts of the world, aimed at protecting the industry?
Yes, we do but most of the palliatives we have for the operators vary. We don’t have a ‘one size fits all’ package. Our taxes (good cause money) are not fixed; they are based on sales volume. So, if you sell, there is a percentage of your sales that you must pay for gaming tax, if you don’t sell, we don’t charge you.
So, when it comes to monthly gaming tax and levies they have to remit, it all depends on the volume of sales. So during the lockdown, if you are not selling anything, we don’t charge them anything.
Let’s talk about online gaming. In Africa right now; retail is still dominating the market. There is this school of thought that believes the pandemic might accelerate the transition from bricks and mortar to online. Is the Lagos state lottery board prepared for this impending?
Already, Lagos State is regulating online. However, retail will remain significant for a longer period because some categories of punters still believe in luck, sentiments, emotions, and the pragmatic nature of lotto. Conversely, online is booming in the areas of online casinos, sports betting, and virtual gaming.
You are obviously doing a lot from what we can see but there are still cases where stakers seem to be shortchanged by operators. What measures are you putting in place to check this ugly practice?
We have so many measures in place. Firstly, we make sure all our operators are bonded, so if an operator cannot pay the winners, the board can redeem the bond. Maximum winnings should be equal to the bond that we have collected from operators.
Instances of winning are based on statistics and probabilities, so we make sure all our operators are bonded one way or the other. Another thing we have done is to give license for promotions. Those that wish to promote products and services must also be bonded to protect consumers. We realized that there is a trend in promotional programmes and draws, so we have found a way to bond promoters based on the winnings that they have promised the people.
From your explanation, it appears that only those registered with you will be bonded. However, there are still some illegal businesses in the state, unregistered gaming companies who pass them themselves off as registered; what are the things punters should look out for?
If you followed the news in the past two months, you will find that we have continued to list the names of our licensed operators in national newspapers. And if you come to our website too, it is always there. We have seen situations where punters play games and those operators were not licensed by the Lagos State Lottery Board. It is there on our website if you want to play games, make sure they are licensed in Lagos State to be protected.
There have been clashes between the federal and state governments concerning regulation. Lanre Gbajabiamila, the Director-General of the National Lottery Regulatory Commission(NLRC) said at the Sports Betting West Africa conference last year that anybody who wants to register for an online license should so with the NLRC. What is your take on this?
Well, the most important thing is to follow the law. You may have misunderstood him. If you look at the law, we have the concurrent list and the exclusive list and anything that is not within those is residual. There are more than 16 settled Supreme Court cases that address which matters fall under residual items that should be legislated by respective state Houses of Assembly. So, it is very straightforward and clear. When it comes to the issue of online betting, are you saying because people file personal income taxes online nowadays from any part of the nation to the other, it must now be regulated by the federal government? Or does online betting make the constitution of the Federal Republic of Nigeria invalid? So, it is very clear that gaming regulation falls under the residual list. If the Nigerian people want it otherwise, let the constitution be amended to add it to exclusive and concurrent lists. We must learn to respect our constitution.
A follow-up to the answer-if I obtain my licence from the federal government, can I operate in Lagos without hitches?
I’m sure that anyone that will invest a huge amount of money in gaming must have gathered some business intelligence and information about the constitution of Nigeria. Every operator should get a legal adviser and the internal legal adviser can advise those operators on the position of the constitution as amended today. He should also advise operators on whom to pay and this is one of the reasons we formed an association of gaming regulators. We have at least 20 member states. The rule of law must prevail for Nigeria to move forward.
At the federal level, for example, the Nigeria Customs Service continually increases revenue base for the government; since you came on board in October, have you been under any pressure to double the revenue generated?
I don’t have to be under pressure to do that. I think if you are saddled with this kind of responsibility that is what you should do. A lot of people don’t know that about 20 percent of the cost of the construction of the new airport road came from this office. We also sponsor people on health matters when it becomes critical. Some of the Lagos State Emergency Management Agency equipment were bought by funds from this office. That is why we call our taxes “Good Cause Money”. Everything we collect is for good cause. The money is divided into four- infrastructure, education, social and health, and sports. That is what we do. Thus, it is a continuous mission for anybody that is on this table to source for more revenue legally without making life difficult for the operators.
In a nutshell, for people viewing your agency as promoting vices, what message do you have for them?
Let me tell you something, the Harvard University in the United States that most Nigerians are dying to attend was built with lottery money; the same thing with Yale University. Some notable universities around the world are funded with money gotten from lottery. So, why not regulate so that you can manage it, but when you do not regulate, charlatans come in and violence will then erupt. Gaming is for entertainment and leisure.
I want us to look at the issue of betting shops during the pandemic. How do you enforce the use of facemask and social distancing in betting shops?
As far as Lagos State is concerned, if you follow the trend of governance in Lagos State from 1999 to date, Lagos has been a state that governs with methodology; we are a government of methods.
I’ll give an example. Today, the Lagos State Safety Commission has put in place a strategy to open businesses like restaurants, gaming centres, cinemas, and some other customer-facing businesses. You must register before you can be allowed to open. The registration is meant to manage the pandemic protocols under the leadership of Mr. Governor, Mr. Babajide Sanwo-Olu.
Lastly, What are your plans for this office?
There are so many plans. Number one is to actualize our mission of becoming the most preferred gaming regulator in West Africa, not even in Nigeria. And if we have to do that, we have to abide by the international standards. So, going by international standards, we are partnering with regulators in Europe, the United States, South America, and the Caribbean. We must be at par with global standards to compete effectively. We are also planning to reform our laws to address the realities of today.
Our ‘know your customer’ policy must be 100 percent implemented by all operators. That is why we are developing a new agent registration strategy because agents will be liable too. If there is no accountability or a form of liability, we can’t achieve the prevention of underage betting. Those are the things we want to do in the first year and increase our revenue. And you can see, there are some virtual games that people are spending money on. For instance, Candy Crush made $1.5 billion in 2018 and I know some Nigerians were paid as players of Candy Crush especially in Lagos with more than 20 million people. So, how do we make money from Candy Crush and others? Those are the things we want to do, that is why we must adopt international standards.