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Online Gaming in Isle of Man

Authored by - Appleby (Isle of Man) LLC (Last updated Oct 2023)

Overview

Open

Isle of Man Online Gaming Overview

Regulated
The Isle of Man (“Island”) is an established licensing jurisdiction and is home to a large number of start-ups, SME, and multi-licensed operators. The Island has been licensing online gambling since 2001 and has since developed a wealth of experience and an internationally recognised reputation that places consumer protection at the heart of its objectives.

In the Isle of Man, the gambling regulator that oversees all forms of online and land-based gambling on the Island is called the Gambling Supervision Commission (“GSC”) and it is an independent statutory board. The GSC regulates land-based gambling operations (casino, amusement, slots, betting offices and lotteries) and online gambling services. The GSC was established in 1962 to protect the interests of gamblers and in 2001, the Isle of Man was one of the first jurisdictions in the world to regulate online gambling. The status and constitution of the GSC are set out under the Gambling Supervision Act 2010, and under that legislation, the regulatory objectives of the GSC are:

  • To ensure that gambling is conducted in a fair and open way.
  • To protect children and other vulnerable persons from being harmed or exploited by gambling.
  • To prevent gambling from being a source of crime or disorder, associated with crime or disorder, or used to support crime.

All forms of online gambling are regulated under the terms of the Isle of Man Online Gambling Regulation Act 2001 (“OGRA”).

OGRA regulates gambling and therefore activities such as marketing, free-play games with no prizes, call centres, customer support and design of software do not require a licence – although note that this is fact-specific. A licence is available for software in certain circumstances – see further below. Whether or not a licence is required under OGRA will always come down to specific facts and circumstances and must be checked, but as a general rule, performing activities such as registering players, offering the games or striking the bet using Isle of Man infrastructure will require a licence.

Note that in certain circumstances work permits may be allowed to move certain staff to the Island. As of March 2016, e-gaming workers have been granted certain exemptions from requiring a work permit, but certain conditions apply.

Market size
The gambling and digital technologies industry represents a significant size of the Island’s economy; in 2021, Digital Isle of Man reported that the gambling industry contributed approximately 18% to the Island’s GDP. This is anticipated to show further growth throughout 2023, with an already strong start. Digital Isle of Man reported in February 2023 that there had been a record-breaking 79% increase in licences over the last 5 years, a 17% increase on the previous year.

Competitive landscape
The Island has 75 licensed operators, the highest ever number, including Games Global and The Rationale Group. Please refer to link to current register of licence holders under OGRA.

Top Key Attractions and Challenges
Attractions

  • The Island has a strong supportive business ecosystem that works closely with and supports the online gambling sector. This includes (but is not limited to) lawyers, banking services, data hosting centres, payment services and corporate service providers
  • The Island has an advanced telecoms infrastructure with first class fixed and mobile networks and highly resilient bandwidth connectivity delivered by excellent data centres with specific and long running experience of the online gambling sector
  • Attractive financial benefits; low betting duty (on a sliding scale from 0.1% to 1.5% based on GGY), 0% corporation tax (there are some exceptions to this, but they are not relevant to the online gambling sector), 0% Capital Gains Tax and 0% Inheritance Tax. Additionally, the Island offers attractive personal tax rates and allowances also allowing for annual income tax caps for personal taxation aspects
  • The Isle of Man is a stable jurisdiction, has been “whitelisted” by the Organisation for Economic Corporation and Development (“OECD”) in recognition with complying with global standards and has been positively marked by the Financial Action Task Force (“FATF”) as a leading nation for compliance with international standards of AML/CFT measures
  • The GSC was at the forefront in issuing guidance setting out when it will allow its licensed operators to use the use of digital currencies and virtual goods

Challenges

  • Use of crypto is limited by the GSC
  • All small islands have challenges regarding travel and therefore the Isle of Man is not unique in this regard
  • The Isle of Man is not and never has been a part of the EU. Despite there being no EU Directive for gambling services, it is recommended that further review of each member state be carried out to ensure relevant licensing requirements (if any) are clearly understood and relevant
  • Work permit issue as noted above

Licensing & Regulation

Well-regulated / Unregulated (Open)

Isle of Man Online Gaming Licensing & Regulation

Licence Triggers
Generally speaking, should an operator perform any of the following functions on the Island, then an OGRA licence will be required:

Registration of players – where an operator holds and stores personal data for the purposes of gambling (e.g., username, passwords, age, addresses, etc.) Striking of the bet – where a player commits to bet on the...

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Enforcement

Regular / Punitive

Isle of Man Online Gaming Enforcement

Regulating bodies
The GSC has power to issue licence conditions that licensees must comply with, and these can be specific to a particular licensee depending on the circumstances.

Anti-money laundering (AML) and countering the financing of terrorism (CFT) requirements.

The current substantial Isle of Man anti-money laundering (AML) laws are:

The Anti-Terrorism and Crime Act 2003 The Terrorism and...

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Marketing

Restricted

Isle of Man Online Gaming Marketing

Online
As a licence condition, operators are required to demonstrate to the GSC compliance with all Advertising Standards Authority Codes and industry self-regulatory codes or such other codes as may be applicable. All operators are required to provide hyperlinks on their websites to any problem gambling organisation that may be specified by the GSC.

The Online Gambling (Advertising) Regulations...

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Fees

Low

Isle of Man Online Gaming Fees

Application fees
Different licences are available. The type of licence depends on the service being provided and not the product. The licences that are available are as follows:

A main OGRA licence initial application fee is GBP 5,250. Sub-licences under OGRA can be obtained if the operator wishes to operate exclusively with a technology provider with a full OGRA...

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Taxes

Low

Isle of Man Online Gaming Taxes

Licence taxes
Gambling Duty for online gambling operators is charged on gross gaming yield. The rates of the duty are:

For gross gaming yield not exceeding GBP 20,000,000 per annum – 1.5% For gross gaming yield exceeding 20,000,000 but not exceeding GBP 40,000,000 per annum – 0.5% For gross gaming yield exceeding GBP 40,000,000 per annum – 0.1% For...

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Future Outlook

Positive

Isle of Man Online Gaming Future Outlook

The Isle of Man values the contribution made to its economy by the sector. The GSC introduced an approved software register in January 2019 under the terms of the Online Gambling (Software Supplier Licensing) Regulations 2019. These regulations introduced a new form of online gambling licence that allows software providers to apply for a licence for the provision of gambling...

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Legal Expert

Appleby (Isle of Man) LLC

Office locations Bermuda / British Virgin Islands / Cayman Islands / Guernsey / Hong Kong / Isle of Man / Jersey / Mauritus / Seychelles / Shanghai

Appleby is one of the largest offshore law firms in the world. As the only offshore law firm with a presence in all three Crown Dependencies (Jersey, Guernsey and Isle of Man) Appleby continues to hold notable rankings in Chambers and Legal 500 across all its offices. Legal 500 named Appleby on the Isle of Man as the best firm on the Island in 2019. Appleby Isle of Man is the only Tier 1 firm noted for gaming and gambling on the Island and has as one of its partners, the only leading individual noted by Legal 500 for this sector in the Island and has the only general member of the IMGL.

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Contact Isle of Man - Appleby (Isle of Man) LLC

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