The federal government lacks the power to regulate lottery and gaming in Nigeria.

A.G. OF LAGOS STATE & 21 ORS. v. A.G. OF THE FEDERATION & 15 ORS

SUPREME COURT OF NIGERIA

(ABBA AJI; GARBA; AGIM; TSAMMANI; ADAH; TUKUR; IDRIS, JJ.SC)

BACKGROUND FACT

The Attorneys General of Lagos State and twenty-one (21) other states (the Plaintiffs) invoked the original jurisdiction of the Supreme Court by filing an originating summons to challenge the legislative competence of the National Assembly (2nd Defendant) to enact the National Lottery Act. The Plaintiffs argued that the National Assembly did not have the constitutional authority to regulate lottery activities, as such activities are not listed under either the Exclusive or Concurrent Legislative Lists in the Constitution. They further contended that lottery regulation is not incidental or supplementary to any matter on the Exclusive Legislative List, thus placing it outside the legislative scope of the National Assembly.

Before the enactment and commencement of the National Lottery Act in 2005, the Plaintiffs had already passed state-specific laws regulating lotteries within their jurisdictions. The Nigerian Constitution designates matters not enumerated in the Exclusive or Concurrent Legislative Lists as residual, and such matters are within the exclusive legislative competence of the State Governments. Based on this provision, the Plaintiffs argued that the regulation of lottery activities is a residual matter that should fall under state authority, rather than federal control. However, in 2005, the National Assembly enacted the National Lottery Act, which established a federal framework for regulating and controlling lottery operations across Nigeria. The enforcement of the Act has been carried out through the administrative mechanisms of the 1st Defendant, which continues to regulate lottery activities in the Plaintiffs’ states. The Plaintiffs raised concerns that this federal regulation infringes upon their constitutional powers to legislate on lottery matters within their respective states.

One of the key issues raised for determination in the suit was: Whether the National Assembly possesses the legislative competence to regulate and control the operation of lotteries in Nigeria, particularly through the enactment and enforcement of the National Lottery Act.

ARGUMENTS

Learned Counsel for the Plaintiffs argued that the provisions of the Constitution do not confer legislative authority on the National Assembly to regulate or legislate on lottery. He contended that “lottery” does not fall within the scope of “trade and commerce” as contemplated under the Exclusive Legislative List. In advancing this argument, he maintained that lottery is neither a commercial nor an economic activity in the traditional sense. He asserted that the term “Trade and Commerce” in the Exclusive Legislative List pertains strictly to activities involving the exchange of goods and services through buying and selling, whereas lottery, as a game of chance, lacks the fundamental characteristics associated with commercial transactions. Counsel further argued that unlike trade and commerce, where transactions are premised on a guaranteed exchange of value, lottery is speculative and inherently risk-based. He emphasized that lottery does not meet the economic criteria of “social justice” or “equal status and opportunity” often attributed to regulated economic activities. Given its nature, he submitted that lottery cannot be equated with commercial transactions that involve predictable financial returns or economic productivity.

Expanding on his submission, Learned Counsel contended that the constitutional provision emphasizing the harnessing and distribution of Nigeria’s material resources does not extend to lottery. He distinguished lottery from mineral resources, such as crude oil, which constitute tangible and extractable national assets. According to him, lottery is a voluntary, privately operated activity that does not constitute a “material resource” of Nigeria. Instead, he argued that the government’s involvement in lottery is limited to revenue generation through taxation, which is already adequately governed by existing tax laws. Finally, Learned Counsel submitted that the doctrine of “covering the field” is inapplicable in this case. He noted that the subject matter of “lottery” is not expressly included in either the Exclusive or Concurrent Legislative Lists contained in the Second Schedule to the Constitution. In line with constitutional principles, he maintained that any matter not expressly listed in these two legislative lists falls under the Residual Legislative List. Since residual matters are within the exclusive legislative competence of State Governments, he concluded that the regulation of lottery falls solely within the jurisdiction of the States.

Read also: Regulation of Lotteries in Nigeria: Review of the Supreme Court’s Decision and its Implications

In response to the Plaintiffs argument, Learned Counsel for the Defendants asserted that the National Lottery Act was lawfully enacted by the National Assembly in the exercise of its legislative powers under the Constitution. He argued that the National Assembly’s authority to regulate lottery derives from its power to legislate on matters of commerce, as contained in the Exclusive Legislative List. Counsel contended that while state governments may issue lottery licenses within their respective jurisdictions, these licenses are inherently limited in scope, whereas the National Lottery Act provides a uniform regulatory framework applicable across all 36 states of the Federation and the Federal Capital Territory. In further justifying the National Assembly’s legislative competence, Counsel argued that the Act does not deprive states of their rights or revenue but rather ensures regulatory consistency and prevents a proliferation of conflicting state laws, which could lead to irregularities in lottery operations. He emphasised that both federal and state governments have a constitutional duty to promote economic activities, and a unified regulatory approach serves this objective by fostering national economic stability and oversight.

Additionally, Counsel submitted that the President’s exclusive power to issue national lottery licenses is constitutional and aligns with the National Assembly’s mandate to promote and regulate economic activities in Nigeria. He further argued that the doctrine of “covering the field,” as recognized in constitutional jurisprudence, applies in this case, thereby rendering any conflicting state lottery law subordinate to the National Lottery Act. Since the Act establishes a nationwide framework for lottery regulation, Counsel maintained that state laws must yield to federal legislation in areas of overlapping jurisdiction. The Court was urged to resolve the issue in favor of the Defendants, on the ground that the National Lottery Act was properly enacted within the National Assembly’s legislative competence.

DECISION OF THE COURT

In resolving this issue, the Supreme Court held that:

The National Lottery Act, 2005, enacted by the National Assembly, exceeded its constitutional authority and was therefore ultra vires and unconstitutional. The Court determined that lotteries, being a game of chance, do not fall within the scope of “trade and commerce” as contemplated under the Constitution, nor do they qualify as an economic activity within the meaning of constitutional provisions governing economic regulation. The Supreme Court further noted that the term “lottery” is not expressly listed under either the Exclusive Legislative List or the Concurrent Legislative List in the Second Schedule of the Constitution. Consequently, in line with the principles of legislative competence, matters not specifically assigned to the Federal Government under these lists fall within the Residual List, which is within the exclusive legislative jurisdiction of the State Houses of Assembly, thereby rendering the National Lottery Act unconstitutional.

Issue resolved in favour of the Plaintiffs.

B. Olanipekun, SAN with A. Adeyemi, Esq., O. Ajayi, Esq., A. Makinde, Esq., A. Kawu, Esq., O. Murtala, Esq., and R. Nmarkwe, Esq., for the Plaintiffs
I. Daagba, Esq., with V. Adodo, Esq., and H. M. Gbor, Esq., for the Defendants

This summary is fully reported at (2025) 1 CLRN in association with ALP NG & Co.
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