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The Pre-Regulated Playing Field: A look at Online Gambling Jurisdictions in 2024: Isle of Man

In a new series, Asia Gaming Brief looks at existing and upcoming grey market licensing jurisdictions and compares what they offer to the industry. This edition takes a look at the Isle of Man.

Over the following weeks, we will shine a light on everyone from Anjouan to Curacao and Tobique, presenting you the basic facts and analyzing the pros and cons or every jurisdictions based on our in-depth expertise, industry feedback, and decades of experience in the field. We are starting the series with one of the oldest eGaming licensing jurisdictions in the game, the Isle of Man.

The Isle of Man is a self-governing British Crown Dependency in the Irish Sea, located between England and Ireland. It has a population of around 85,000 and outside of being the home to many gambling companies is most famous for the annual TT motorbike races. Its government, Tynwald, can pass its own laws and has used this power to introduce 0 percent Corporation Tax and 0 percent Capital Gains Tax for most companies located on the island.

Isle of Man licenses are issued by the local Gambling Supervision Commission and governed by the Online Gambling Regulation Act 2001. They are therefore often called OGRA licenses, valid for five years, and split into the following categories:

  • Full License

A Full License covers the majority of activities an operator can carry out, including B2C, B2B, Sub Licensing and White Labels. It also covers all gaming verticals such as casino, live casino, esports, bingo, keno and sports betting. An operator can combine multiple activities under one Full License, for example B2C and B2B, fiat and crypto, and only pay one license fee.

  • Network License

A Network License allows the same activities as a Full License but in addition also allows operators to accept players from other (global) operators on their gameplay and back office servers without the need to register them. The most common use cases are networks and progressive jackpots.

  • Sub License

The Isle of Man Sub License differs from Sub Licenses in other jurisdictions in that it requires the Sub Licensee to have an exclusive relationship with a Full License holder. This means a Sub License holder must use the products of a Full License holder and cannot add new games or products outside of this unless the company applied for their own Full License. As a result, Sub Licenses are rare in the Isle of Man as most operators either choose a White Label or a Full License instead.

  • Software Supplier License

Supplying games and platforms on a B2B basis does not require a license in the Isle of Man per se, and companies are free to do so providing their products carry accepted certification when supplied to Isle of Man licensed operators. In addition, the regulator does offer a specific Software Supplier License that covers casino games, back-office platforms, live-dealer casinos, betting platforms and operators who act as re-sellers for these products.

Acquiring a Software Supplier License entitles the license holder to have their company listed on the Isle of Man’s official register of software providers. Next to signalling legitimacy to potential business partners elsewhere, this also means other Isle of Man licensed operators can use the products on this register immediately without notifying the GSC.

  • Token / Blockchain based Software Supplier License

Just like the Software Supplier License, this license is optional and obtaining it entitles the licensee to add their products to the Isle of Man’s official register of software providers.

  • White Labels

White Labels are usually carried out under a Full B2C License, as the Isle of Man does not require White Label partners to have their own license. Instead, all activity takes place under the Full License of a main license holder, usually the platform or games provider. Therefore, a specific White Label license is not available per se.

The Pre-Regulated Playing Field: A look at Online Gambling Jurisdictions in 2024: Isle of Man
  • A Full License costs £36,750 ($46,700) p.a. plus a £5,250 ($6,600) application fee;
  • A Network License costs £52,500 ($66,800) p.a. plus a £5,250 ($6,600) application fee;
  • A Sub-License costs £5,250 ($6,600) p.a. plus a £5,250 ($6,600) application fee;
  • A Software Supplier License costs from £36,750 ($46,700) p.a. plus a £5,250 ($6,600) application fee;
  • A Token/Blockchain based software supplier license costs £52,500 ($66,800) p.a. plus a £5,250 ($6,600) application fee.

  • On the first £20 million ($25.4 million) of profit, 1.5% duty is payable;
  • On the next £20 million ($25.4 million) of profit, 0.5% duty is payable;
  • On any amount in excess of the first £40 million ($50.8 million) profit, 0.1% duty is payable;
  • The Isle of Man has 0% Corporation Tax, 0& Capital Gains Tax and VAT is charged at 20%. VAT costs can be reduced through suitable group structuring.

The Isle of Man regulator does not maintain a list of prohibited territories per se, and instead requires licensees to ensure they operate legally when targeting certain regions. Operators are expected not to enter countries where a local license is required or where gambling is illegal. In practice, this means operators obtain legal opinions as part of the licensing process that provide adequate comfort that activities are permitted for an Isle of Man company. This approach means that many lucrative grey markets can still be targeted with an Isle of Man license.

The Isle of Man GSC states a turnaround time of 12 to 16 weeks from the moment the application is submitted to the time of the hearing and issuance of the license. Realistically, and taking into account the required preparatory work on the side of the applicant, an Isle of Man license can be obtained in around six months end-to-end.

Yes. It is a requirement to have a Genuine Presence on the Isle of Man and this means a locally incorporated company with two resident directors. Licensees must also have a Designated Official on island, or, where the individual resides off-island, an Operations Manager.

There is technically no requirement to visit the island in person or live there, as local corporate service providers often supply the required local directors and manage day to day affairs. The GSC does prefer to meet the people behind a project in person at the license hearing. It is also a requirement that the servers where the bets are struck are hosted in the Isle of Man. Local IT service providers can assist in this process, eliminating the need to have company staff on island.

Yes, the Isle of Man’s Tier 1 status means most banks and payment service providers are happy to deal with companies licensed here. Various on-island banking options are also available covering fiat and crypto currencies.

Yes, an Isle of Man license is widely accepted by games and platform suppliers, as well as many professional organizations and sports governing bodies. This opens the doors to sponsorships and other opportunities.

Few people will disagree that Isle of Man is the most respected grey market licensing jurisdictions in the industry right now, but this Rolls Royce reputation comes at a cost. While the local regulator still has a reputation as being business friendly and approachable, a new enforcement regime and generally tightening compliance requirements mean added work and expenses to maintain compliance.

The island’s friendly tax rates are helpful but the charging of a gaming levy puts the island behind some of its gambling tax free competitors. The need to have an on-island presence, which usually means the use of local service providers specializing in this field, also adds cost and complexity. The Isle of Man government does offer financial and other support for companies wishing to open their own offices on the island, but high costs, difficulties in recruiting suitable staff on island, and reported delays in immigration affecting the relocation of existing staff members can make this a challenging undertaking.

While the Isle of Man is without a doubt a very respected grey market licensing jurisdiction, the relatively high compliance costs associated with its gambling licenses make it more suitable for existing gambling companies and suppliers wanting to operate at the highest regulatory level or add to their license portfolio. Startup companies may find the regulatory hurdles difficult and expensive to overcome.

Frank Schuengel
Frank Schuengel
Frank Schuengel is an online gambling industry veteran with over twenty years of experience in Europe and Asia. Equally at home in the Isle of Man and the Philippines, he started his career as a sports trader before setting up and running whole operations, and more recently focusing on the regulatory and licensing side of things in the worlds of fiat and crypto eGaming. When he is not writing about gambling topics, he can be found cycling around Manila and advocating sustainable transport solutions for a Philippines based mobility magazine.

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