Gaming Law 2023 Comparisons

An Isle of Man online gambling licence provides an operator with a well-regulated, safe, and reputationally secure jurisdiction from which to conduct its business. While the online industry has moved on from the days when an operator could comfortably conduct its international business with one or two licences, the Isle of Man (“the Island”) continues to be a central cog in any credible international online gambling operation.

Although the Island is similar to other offshore locations in that it has low gaming duty and an attractive tax system, what attracts the experienced operator to the Island’s shores is the lack of corruption, no organised crime, political stability, family safety, and an excellent, healthy lifestyle.

With the international push towards substance and tax transparency, it is expected that the Island will continue to have a key role to play as it has the capacity to provide substance and tax transparency as the norm. The Island’s regulator, the Gambling Supervision Commission (GSC), acts as a watchdog ‒ protecting not only the Island’s reputation by maintaining high regulatory standards, but ensuring that those operating on the Island do so in a compliant manner.

By carefully vetting and continuously monitoring both the applicants and licence holders, the Island’s regulator has created a safe business environment. This is now attracting experienced operators who want to operate in a business-friendly but well-regulated jurisdiction.

Social Gaming

The definition of online gambling within the OGRA is arguably wide enough to include social gaming that is conducted for money or money’s worth.

What may be considered relevant to social gaming is the use of virtual currencies in online gambling.

Pursuant to the Online Gambling (Registration and Accounts) Regulations 2008 (as amended by the Online Gambling (Amendments) Regulations 2016), it is now possible to open an account with an Isle of Man gambling operator by using anything that has a value in money’s worth. This includes convertible and non-convertible virtual currencies (CVCs and VCs respectively).

Convertible virtual currencies include cryptocurrency (such as bitcoins) that can be bought and sold through independent exchanges for fiat currency.

Non-convertible virtual currencies include virtual goods such as digital “skins” for avatars and weapons in video games, and other digital objects that have functions in video games, in addition to in-game currencies that can be used to buy such objects.

The following models are currently permitted:

• CVC/VC to fiat conversion prior to play;
• CVC/VC-in, CVC/VC-out – peer-to-peer;
• CVC/VC-in, CVC/VC-out – against the house; or
• VC-in, conversion, VC-out.

Models not currently permitted are:

• CVC/VC-X-in, CVC/VC-Y-out;
• CVC/VC-in, fiat-out; or
• fiat-in CVC/VC.

See the Isle of Man Gambling Supervision Commission’s Guidance for Online Gambling.

E-sports

The Island is a popular location for e-sports operators, with Luckbox being the first cryptocurrency-supported e-sports betting platform to be granted an online gambling licence.

The GSC has also approved the regulation of a form of e-sports whereby customers may bet on their own performance in online gaming competitions.

Fantasy Sports

Fantasy sports operators only need a standard online gambling licence in order to operate from the Island. In practice, fantasy sports would be offered as one of a number of sports games by a sports betting operator under its online gambling licence.

Skill Gaming

Skill games are not currently specifically regulated by statute.

Blockchain or Cryptocurrency

The Isle of Man Blockchain Sandbox has been established to guide blockchain businesses through current (and future) regulatory landscapes. This new strategy is set to position the Isle of Man as an international hub for blockchain businesses. Within this strategy are a number of new policies that set the Isle of Man apart from other jurisdictions as a fast follower of international regulation, thereby enabling the Island to offer a highly attractive and responsive regulatory environment.

With the exception of spread betting, all forms of online gambling are potentially licensable under the Online Gambling Regulation Act 2001 (OGRA). The following forms of gaming require an OGRA licence when conducted online:

• fixed-odds betting (eg, sportsbooks, including e-sports);
• bingo games;
• betting exchanges;
• online casino games (eg, roulette, blackjack, and slots);
• live dealing;
• peer-to-peer games (eg, poker, bingo, backgammon, and mah-jong);
• mobile phone betting;
• fantasy sports;
• financial trading (but not spread betting);
• pari-mutuel and pool betting;
• network gaming;
• virtual currency betting;
• lotteries;
• lottery reselling;
• certain spot-the-ball-style games; and
• network services.

The GSC has introduced a variant of an OGRA licence – ie, a software supplier licence or a token-based software supplier licence. Although the licence is not mandatory to supply software to licensed operators in the Isle of Man, obtaining this type of licence creates a simpler process for operators seeking to deploy games content. Suppliers’ software are listed on a central register.

Any software or service listed on the central register is deemed certified to the GSC standard, and any Isle of Man operator wishing to deploy those games or services will be permitted to do so without having to give notice to – or gain permission from – the GSC. Operators are not required to obtain testing certificates for software that is listed on the central register. In order to list software or services on the register, the software company is required to supply its certification directly to the GSC and not via an operator.

A token-based software supplier licence will be necessary for any licensee who wishes to make available software or related services that depend upon a blockchain-based token as the primary means of exchanging value. Token-based software suppliers are entities that have created blockchain-based tokens for use as currency in a gambling ecosystem.

An OGRA licence is not required for:

• gambling that is covered by a betting office licence;
• gambling that is covered by a casino licence;
• spread betting; and
• “free play” games.

Other excluded activities are listed in the Online Gambling (Exclusions) Regulations 2010 and the Online Gambling (Exclusions) Amendment Regulations 2014 and include:

• advertising and marketing analysis and services;
• IT provision and maintenance;
• customer support;
• web and software design; and
• purely administrative procedures.

Betting

It is an offence to use non-licensed premises for betting or to operate as a bookmaker without a permit (Section 11 and Section 14 of the Gaming, Betting and Lotteries Act 1988, or GBLA).

Racecourse Betting

Operators of racecourse betting must hold a licence, the conditions of which are set out in regulations made under Section 21(2) of the GBLA and/or specified by the GSC.

On-course pool betting can only be carried on at an approved racecourse and under the relevant permit (Section 23, GBLA).

Pursuant to Section 24 of the GBLA, the GSC may – if it thinks fit – grant a licence authorising any person of good character and over 25 years of age to set up, keep, and operate a totalisator on an approved racecourse.

Casino Games

The Casino Act 1986 relates to casino games – the following games, pursuant to the Casino Regulations 2011, are prescribed and may be played in the gaming rooms of a casino:

• roulette;
• blackjack;
• pontoon;
• punto banco;
• bingo;
• gambling on horse races shown on film or video;
• casino brag;
• poker;
• games of dice;
• baccarat;
• chemin-de-fer;
• backgammon;
• keno;
• playing on automatic machines;
• Wheel of Fortune; and
• Super Pan 9.

Games and activities other than these may not be played, offered, or conducted without the written permission of the GSC.

Controlled Machines

The siting of controlled machines (ie, slot machines, arcade machines, and quiz machines) falls under the control of the Gaming (Amendment) Act 1984 (GAA) and is subject to the certification and registration requirements and procedures set out in Part II and in Schedules 1 and 2 of that Act.

The supply of controlled machines is governed by the procedures established in Schedule 3 of the GAA.

Land-Based Lotteries

The GBLA and the National Lottery Act 1999 regulate lotteries in the Isle of Man. Apart from small society lotteries, the UK National Lottery is the only legal land-based lottery operated on the Isle of Man. A lottery that forms part of the National Lottery under the National Lottery etc. Act 1993 (a UK Act of Parliament) is not an unlawful lottery if it is designated in an order made by the Treasury (eg, National Lottery (Designation) Order 2009).

Restrictions

Sections 2 to 6 of the GBLA outline general areas where restrictions on gaming apply, including:

• playing or staking against a bank, whether the bank is held by one of the players or not;
• the nature of the game is such that the chances in the game are not equally favourable to all the players;
• charging for games;
• stake levies;
• betting in the street; and
• advertising.

The Isle of Man gambling legislation is split between gambling that takes place online, and land-based activities such as casinos, bookmaking, and lotteries.

Online Gambling

The regulation of online gambling is primarily covered by the OGRA, which also makes provisions for regulations to be made under the Act.

Currently the following regulations are in force under the OGRA:

• the Online Gambling (Advertising) Regulations 2007;
• the Online Gambling (Prescribed Descriptions) Regulations 2007;
• the Online Gambling (Systems Verification) (No 2) Regulations 2007;
• the Online Gambling (Betting and Miscellaneous Provisions) Regulations 2007;
• the Online Gambling (Disaster Recovery) (No 2) Regulations 2007;
• the Online Gambling Duty Regulations 2008;
• the Online Gambling (Registration and Accounts) Regulations 2008;
• the Online Gambling (Registration and Accounts) (Amendment) Regulations 2014;
• the Online Gambling (Licence Fees) Regulations 2009;
• the Online Gambling (Exclusions) Regulations 2010;
• the Online Gambling (Exclusions) (Amendment) Regulations 2014;
• the Online Gambling (Participants’ Money) Regulations 2010;
• the Online Gambling (Participants’ Money) (Amendment) Regulations 2014;
• the Online Gambling (Network Services) Regulations 2011;
• the Online Gambling (Amendments) Regulations 2016;
• the Online Gambling (Software Supplier Licensing) Regulations 2019; and
• the Online Gambling (Licence Fees) Regulations 2023.

Land-Based Gambling

The principal legislation for land-based gambling is the GBLA and the GAA, which set out legal requirements and restrictions relating to:

• lotteries;
• betting (including at racecourses);
• bookmaking;
• controlled machines; and
• totalisator (ie, a computer that registers bets and divides the total amount of the bet among those who win).

The GBLA also gives power to the GSC to make regulations. Regulations under the GBLA include:

• the Bingo Nights (Prescribed Conditions) Regulations 2010, which prescribe the conditions to be complied with where bingo is played as part of a fundraising event;
• the Racing Nights (Prescribed Conditions) Regulations 2010, which prescribe the conditions to be complied with by a lottery that forms part of a fundraising event;
• the Society Lottery Advertisements Regulations 2011, which provide how a registered charity (as defined) may advertise its fundraising lotteries; and
• the Licensed Betting Office (Opening Hours) Regulations 2017, which amend the days and times when licensed betting offices may be open.

Other relevant legislation includes:

• the Pool Betting (Isle of Man) Act 1961;
• the Pool Betting (Isle of Man) Act 1970;
• the Betting Act 1970;
• the Casino Act 1986;
• the National Lottery Act 1999;
• the Gaming, Betting and Lotteries (Amendment) Act 2001;
• the Gambling (Amendment) Act 2006;
• the Gambling Supervision Act 2010;
• the Casino (Amendment) Act 2018; and
• the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Act 2018.

The following regulations are currently in force under the Casino Act 1986:

• the Casino (Licence Application) Regulations 1986, which set out to whom an application for a casino licence should be made and matters that should be included in such a licence application;
• the Casino Regulations 2011, which ‒ in addition to prescribing the games that may be played ‒ also provide for the administration, operation, financial provision, and enforcement and licensing of casinos; and
• the Casino (Temporary Premises) Regulations 2013, which prescribe the procedures and requirements relating to temporary certificated premises.

The GAA, and the regulations made thereunder, sets out provisions relating to the sale, supply, and the keeping for use of controlled machines.

The following regulations are currently in force under the GAA:

• the Controlled Machines Regulations 1985;
• the Controlled Machines (Exemption) Order 1992;
• the Certification of Premises (Application Fees) Order 2003;
• the Controlled Machines (Suppliers Licences) (Fees) Order 2003;
• the Controlled Machines (Prescribed Amounts and Percentages) Regulations 2014; and
• the Controlled Machines (Exemption) Order 2016.

The National Lottery Act 1999 extends the UK National Lottery to the Isle of Man.

For further information, visit Legislation and Regulations.

Section 3 of the Gambling Supervision Act 2010 defines gambling as:

• gaming – within the meaning of the GBLA (see 3.3 Definition of Land-Based Gambling);
• making, negotiating, and receiving bets and wagers;
• organising, managing, promoting, or participating in a lottery; and
• supplying or operating controlled machines (within the meaning of the Gaming (Amendment) Act 1984).

See also 3.4 Definition of Online Gambling.

Gaming is defined in Section 1(1) of the GBLA as “the playing of a game of chance for winnings in money or money’s worth, whether or not any person playing the game is at risk of losing any money or money’s worth”.

A “game of chance”, as per Section 1(4) of the GBLA, “does not include any athletic game or sport but, with that exception, includes a game of chance and skill combined and a pretended game of chance or of chance and skill combined”.

Section 1(1) of the OGRA defines online gambling as:

• gaming, where a player enters or may enter the game, or takes or may take any step in the game, by means of telecommunication;
• betting that is negotiated or received by means of telecommunication; and
• lotteries in which any participants acquire a chance by means of telecommunication.

For the purposes of the OGRA, Section 1(2) of the OGRA provides that a person “conducts” online gambling if:

• they take part in the organisation, management, or promotion of gaming or a lottery;
• they carry on any business involving the negotiating or receiving of a bet; or
• they maintain, or permit to be maintained, in the Island, any computer or other device on (or by means of) which the game or lottery is operated or the bet is received.

Telecommunication is defined as a communication sent, transmitted, or received by means of a telecommunication system (which has the same meaning as per the Telecommunications Act 1984).

Online

The key offences with regard to online gambling are:

• conducting online gambling, other than in accordance with an online gambling licence granted; and
• permitting a minor or a person to participate in online gambling if they are in a prescribed country or territory at the material time.

Land-Based

The key offences with regard to land-based gambling are:

• using, or causing or permitting any other person to use, any premises for the purpose of effecting any betting transactions without holding the requisite licences; and
• being involved in the organisation or management of unlawful gaming.

The legislation provides for a detailed list of penalties for unlawful gaming, which range from fines through to imprisonment.

There are no recent or forthcoming legislative changes.

The Isle of Man regulator of all gambling activity is the GSC, an independent statutory board established in 1962. The GSC comprises the Inspectorate and the Commission.

The Inspectorate is managed by its chief executive.

The Commission comprises five independent members of the public, who are appointed by the Isle of Man Treasury. Typically, the Commission sits once a month to consider regulatory matters and licence applications.

The GSC adopts a hybrid model of prescriptive regulatory requirements combined with risk-based oversight. The statutory framework of gambling legislation and underlying regulations provides the skeleton upon which the Inspectorate monitors the activities of the operator through regular compliance reporting and active contact and interaction with the operator and its key staff.

There are no recent or forthcoming changes.

Online Gambling

Any person who establishes its operations in the Isle of Man and conducts any online gambling (within the meaning of the OGRA) must hold a licence under the OGRA.

There are a number of different licences under the OGRA, including:

• a full OGRA licence – operators with a full licence can offer technology such as games, software, and network access to sub-licensees;
• sub-licences under the OGRA – these are obtained where the applicant wishes to operate exclusively with a technology provider that has a full OGRA licence regulated by the GSC;
• a network services licence – this is obtained where the operator wishes to allow one or more foreign registered players onto its Isle of Man server without re-registering the player details; and
• a software supplier licence (software supply and software supply (token-based)) – see 2.1 Online for further details.

Land-Based Gambling

Betting

Per Section 11 of the GBLA, in order to use premises as a betting office in the Isle of Man, the premises must be licensed as a betting office by the GSC.

A bookmaker must hold a permit as well as a betting office licence if they carry out business at premises other than a racecourse (Section 14(1), GBLA).

Bookmaking or pool betting carried out at a racecourse requires a licence in relation to the specified racecourse, provided that the occupier of the racecourse holds a racecourse licence (Section 22 and Section 23, GBLA).

The Commission may separately grant a licence authorising any person of good character and over the age of 25 to set up, keep, and operate a totalisator on an approved racecourse (Section 24, GBLA).

Casinos

A maximum of two casino licences can currently be issued by the Island’s Council of Ministers.

The licence prescribes the types of games that can be played at the casino. The Island’s regulators have adopted a fairly flexible approach and new varieties of the traditional casino games have been trialled in the Island’s current sole casino.

Controlled machines

Prize machines (ie, slot machines), non-prize machines (ie, arcades), and quiz machines are subject to a licensing regime for both supply and siting in public premises.

Lottery

The National (UK) Lottery is available on the Island and apart from small society lotteries, this is the only legal lottery operating on the Island. See also 2.2 Land-Based.

Society lotteries

These are small-scale lotteries conducted for charitable or cultural fundraising. They are not conducted for commercial gain.

Online Gambling

There is no restriction on the number of licences that can be issued under the OGRA.

Land-Based Gambling

There are no restrictions on the number of licences that can be issued under the Gaming, Betting and Lotteries Act 1988 or the Gaming (Amendment) Act 1984 for the supply and siting of controlled machines.

However, in relation to land-based casinos, a maximum of two casino licences can currently be issued by the Island’s Council of Ministers. Currently, one casino licence is in issue.

Online Gambling

Subject to Section 8(2) of the OGRA, an OGRA licence remains in force for a period (specified in the licence) of up to five years unless it is cancelled or surrendered. Licensees can apply to the commissioners for renewal of the licence at any time before the expiry date for subsequent five-year periods (Section 7, OGRA).

The licensee who holds an OGRA licence may surrender the licence by giving notice in writing to the commissioners. The surrender or expiry of a licence does not affect liability for anything done or omitted under the licence (Section 7, OGRA).

Section 13 of the OGRA sets out circumstances in which the commissioners may cancel or suspend an OGRA licence.

A licence can be cancelled or suspended by the authorities if a holder:

• is convicted of an offence under the Casino Act 1986, the OGRA, or the GBLA;
• is convicted of any other indictable offence;
• fails to pay fees due; or
• ceases to be eligible for any other reason.

Licences Issued Under the GBLA

Licences issued to persons under the GBLA who are conducting gambling activities will continue in force for the period stated in the licence, unless they are cancelled or surrendered.

Schedule 1 of the GBLA sets out the circumstances in which the Commission may refuse to grant or renew a licence.

Licences Issued Under the GAA

A licence to site controlled machines must be renewed on an annual basis. A licence to supply controlled machines is renewed on a five-year basis.

Land-Based Casino Licence

A casino licence remains in force for a period of one year from the date on which it is granted, unless it is cancelled or surrendered (Section 5 (1), Casino Act 1986).

Subject to Section 5(3) and Section 5(4) of the Casino Act 1986, the board may renew a casino licence for successive periods of one year upon the application of the holder of the licence (Section 5(2), Casino Act 1986).

Section 5(3) of the Casino Act 1986 provides: “A casino licence shall not be renewed so as to be in force after the expiry of ten years after the date on which it was originally granted.”

Section 5(4) of the Casino Act 1986 provides: “The board shall not renew a casino licence if, after consultation with the Council of Ministers, it is satisfied that the holder of the licence would not be eligible to be granted a licence anew on one or more of the grounds specified in Section 3(6).”

Section 3(6) of the Casino Act 1986 provides that the Council of Ministers shall not grant a casino licence to any person unless it is satisfied:

• that they are a person of integrity;
• that they have adequate knowledge and financial means available to operate the casino;
• that they are the occupier of the whole of the casino and any associated premises and have such security of tenure of the casino (and any associated premises) as the Council of Ministers considers adequate;
• that they intend to operate all the facilities and amenities to be provided at the casino and any associated premises; and
• that, where the licence is intended for a body corporate:
1. the body is incorporated in the Island; and
2. the relevant share capital of the body is beneficially owned by a person or persons of integrity.

In addition, Section 5(6) of the Casino Act 1986 provides that, subject to subsections (3) and (4), the board shall not refuse to renew a casino licence unless the holder of the licence:

• is convicted of an offence under Section 39 of the GBLA (cheating);
• is convicted of an indictable offence by any court in the British Isles or the Republic of Ireland;
• is convicted twice within any period of 12 months of an offence under Section 134(1) of the Licensing Act 1961 (drunkenness in licensed premises);
• has failed without reasonable excuse to comply with the conditions of the licence;
• has ceased to:
1. be the occupier of the whole of the casino; or
2. control the operation or management of all the facilities of the casino; or
• has failed without reasonable excuse to comply with any provision of this Act (or regulations thereunder) relating to the management or operation of the casino.

Online Gambling

The application process is easily accessed and supported by comprehensive guidance notes.

The applicant for an OGRA licence must be an Isle of Man company and must have at least two local directors. The applicant must also appoint at least one designated official. If the designated official is not resident in the Isle of Man, the applicant must appoint an operations manager in addition.

Details of all directors of the applicant company, together with details of the applicant’s designated official (DO) and operations manager (OM), must be included in the application. Such persons are also required to complete personal declaration forms, provide references and complete a vetting process.

Details of the shareholder and beneficial owners of the applicant must be included in the application and such parties are also required to complete application forms, provide references and complete a vetting process. The requirements for due diligence for shareholders vary slightly for publicly listed companies.

Investors who provide a prescribed level of investment to the applicant are also required to complete application forms, provide references, and complete a vetting process.

The application forms and supporting documentation are submitted to the GSC together with the application fee. After completion of a vetting process, the applicant is invited to a licensing hearing before the Commission. If successful, the applicant must pay the licence fee before going live. It typically takes between 10 and 12 weeks for the GSC to process the application.

Licences Issued Under the GBLA

Per Section 16 of the GBLA: “Schedule 1 shall have effect in relation to the grant, transfer, and renewal of, and other matters relating to, bookmakers’ permits and betting office licences.”

Applications under the GBLA are made to the GSC, with copies of such applications being provided to the Chief Constable and to the Collector of Customs and Excise in the Isle of Man.

Within a prescribed period, the applicant must also cause notice of such application to be published in a newspaper that is published and circulated in the Isle of Man. Such notice shall state that any person who desires to object to the grant of the permit or licence should notify the GSC by the date stated in the notice.

See Schedule 1 of the GBLA for further details.

Society lottery licences are only issued for organisations conducting small lotteries (including raffles, bingo nights, and virtual horse racing) in order to raise money for charitable or cultural (eg, sports clubs) purposes.

The application requires details of the society conducting the lottery and the individual responsible for promoting the event.

The fee is GBP5 and must be renewed upon the start of each new year.

Licences Issued Under the GAA

In order to site a controlled machine on a public premises, an application for a licence to do so must be made to the GSC and renewed annually. Details of the directors and owners of the company in ownership of the business must be provided.

Should the premises be licensed to sell alcohol, the key persons of the company will have been approved by the licensing court. As such, the GSC will automatically deem these individuals to be fit and proper to hold the licence to site machines. If the premises is not licensed to sell alcohol, the GSC will run police background checks on each key person to ensure they are persons of integrity.

A floorplan detailing where the machine(s) will be sited is required upon application. An inspection of the premises will be made by a representative of the GSC to ensure that:

• the location of the machine does not pose a fire or security hazard; and
• the machine can be monitored by staff, either directly or via CCTV.

Notice of the application must be placed in two local newspapers within seven days of the application being lodged with the GSC.

The application fee will depend on the type of venue in which the machines are to be located.

With regard to a licence to supply controlled machines, an application is also made to the GSC that provides details of all shareholders over 10% and directors of the applicant company.

All key persons will be subject to a police background check.

The application fee is GBP1,610, and GBP805 upon the licence’s five-year renewal.

Licensed suppliers are generally responsible for keeping the GSC up to date on any controlled machines being introduced to – or removed from – a licensed premises, unless the machine is independently owned by the premises.

Casino Act 1986

A maximum of two casino licences can currently be issued by the Island’s Council of Ministers. Currently, one licence is in issue. The Casino (Licence Applications) Regulations 1986 set out the application procedure for a land-based casino licence; however, specific guidance should be sought from the GSC in relation to applications for licences under the Casino Act 1986.

See also 4.6 Duration of Licences.

See 4.7 Application Requirements.

Online Gambling

There is currently a GBP5,250 administration fee payable upon initial application for a network services licence, full or sub-licence, or software supplier licence.

Land-Based

Refer to the GSC website.

Online Gambling

The current costs are as follows:

• GBP52,250 per annum for a network services licence;
• GBP36,750 per annum for a full licence;
• GBP5,250 per annum for a sub-licence;
• GBP36,750 per annum for a software supplier licence; and
• GBP52,250 per annum for a token-based software supplier licence.

Land-Based

Refer to the GSC website.

Licences may be obtained:

• for a betting office by the holder of a bookmaker’s permit;
• for a certificate to operate controlled machines (slot machines, arcade machines, and quiz machines) from a public premises; and
• for a casino.

While the land-based sector is mature and there is little new activity or legislative change, operators are subject to the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Code 2019 and are required to update their systems and procedures to comply with its amendments from time to time.

An advantage of the Isle of Man over other jurisdictions is the sheer simplicity of its licensing system and the proactive and helpful way the regulator works with the operators to create a business-friendly environment. Most operators only require one licence for all their business requirements and the complex web of licences, fees, and regulations found in other jurisdictions simply does not exist on the Island.

A standard online gambling licence allows the operator to conduct almost all forms of online gambling on a B2C basis under one licence. Operators can be divided into those that specialise in bookmaking, those that specialise in gaming, and those that provide a full suite of different gambling products on a global basis. An operator can also use the same licence for its B2B operations, as long as those operations do not fall with the requirements of a network licence, as discussed in 6.2 B2B Licences (Suppliers, Software, Etc).

There are no restrictions on where the operator may take play from and it is up to the operator to obtain its own legal advice to determine the legal position of its operation. In practice, operators will combine the Isle of Man licence with licences in jurisdictions where a local operator’s licence is required.

A standard online gambling licence can be used for both B2C and B2B and there is not a separate licensing system just for B2B. Where operators wish to operate within a gambling network and take play from the customers of operators based off the Island – without having to register those players as their own – then they require a network licence. The network licence combines all the powers of a standard licence but adds the ability to operate within a gambling network. Network licences are used by a variety of operators and, for example, give access to greater liquidity for poker networks and slots tournaments.

A new software supplier licence is now available that enables the suppliers of software to be licensed and to have their games listed on a central register on the Gambling Commission website. The licence is attractive to software suppliers that wish to operate in a safe, regulated, tax-neutral environment.

The majority of B2B activities that would potentially be licensable under the Online Gambling Act 2001 are excluded from licensing by the Online Gambling (Exclusions) Regulations 2010. This enables support services to the online gambling industry to operate on the Island without the need for a special licence or any licensing fees.

The provision of affiliate services is not a regulated activity on the Isle of Man.

An OGRA licence covers a number of white-label sites. The GSC guidance notes provide that players are required to register with the licensee. The white-label sites are treated as though they were different URLs of the licensee, even though the control of the URL and its marketing may be controlled by a different company and the games may be skinned differently to reflect the brand.

The software services licence is the latest addition to online gambling in the Isle of Man. Updated guidance regarding the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Code 2019 was issued by the GSC in December 2020.

The value of a registered player’s account with an Isle of Man licensed operator is protected at all times by a licence condition in the operator’s licence. This means that if an operator goes into liquidation, the player’s funds can be repatriated to the player. Agencies that arrange and administer the mechanisms that guarantee the players’ monies do not need an OGRA licence to provide this service.

It is the responsibility of the designated official to ensure that the operator remains socially responsible in its operations by excluding youth, crime, unfairness and problem gambling from its operations. The operator’s terms and conditions must include rules on self-exclusion for problem gamblers.

There are no recent or forthcoming changes.

Operators are required to pay a percentage of their revenue to support problem gambling initiatives.

Gambling activities have been separated out from the AML/CFT Code 2019 (see 8.3 AML Requirements) into an industry-specific code, the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Code 2019 SD 2019/0219 (“the Code”).

An operator must not enter into, or carry on, an ongoing customer relationship or carry out an occasional transaction (ie, a transaction – whether carried out singly or as several transactions that appear to be linked – that is conducted outside an ongoing customer relationship) with or for a customer, unless the operator institutes, operates, and complies with the systems, procedures, record-keeping, controls, and training requirements of the Code. The principal elements of such, as outlined in the Code, are:

• a risk-based approach – risk must be assessed at a business, technology, and customer level;
• customer due diligence – for each new ongoing customer relationship or transaction that exceeds the occasional transaction threshold (ie, an occasional transaction that exceeds EUR3,000), an operator must establish, record, maintain, and operate appropriate procedures and controls;
• record-keeping and reporting – this includes keeping a register of disclosures (internal, external, and any others made to the Financial Intelligence Unit) and a register of money laundering and financing of terrorism enquiries; and
• staffing, training, and monitoring compliance – this includes the appointment of an AML/CFT compliance officer and money laundering reporting officer (MLRO) of sufficient seniority and experience.

These procedures and controls must:

• take into account the size and risks of the operator;
• apply to foreign branches and majority-owned subsidiaries; and
• be approved by the senior management of the operator.

An operator must register on the designated reporting platform as provided by the Financial Intelligence Unit (a requirement of Sections 142 to 144 of the Proceeds of Crime Act 2008 and Sections 11, 12, and 14 of the Anti-Terrorism Crime Act 2003).

The ultimate responsibility for ensuring that customer due diligence complies with this Code is that of the operator, regardless of any outsourcing.

Any person who contravenes the Code is guilty of an offence that is punishable:

• upon summary conviction, by up to one year in prison or to a fine not exceeding level 5 on the standard scale (ie, GBP10,000, as set out in Section 55 of the Interpretation Act 2015), or both; or
• upon conviction on information, by up to two years’ imprisonment or to a fine, or both.

Full details of the provisions are available in the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Code.

There are no recent or forthcoming changes.

On 1 June 2019, the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Code 2019 came into effect.

Schedule 4 of the Proceeds of Crime Act 2008 lists the businesses to which the Code applies.

The requirements of the Code (see Appendix A) include the following.

• A risk-based approach to customer due diligence, including enhanced customer due diligence for higher-risk customers. There must be a business risk assessment, customer risk assessment, and a technology risk assessment.
• Identification and verification of identity of beneficial owners and applicants for business ‒ for example, through satisfactory evidence of name, date of birth, address, and nationality.
• Provisions to deal with relationships involving politically exposed persons (PEPs) – including determining whether any applicant for business, beneficial owner, or existing customer is a PEP and requiring senior management approval to continue or commence a business relationship with a PEP based on the level of risk that they pose.
• Identification of any sanctioned individuals or entities – any detection of which will require reporting to the relevant authorities.
• Identification of customer source of funds and wealth where appropriate.
• Provisions with respect to foreign branches and subsidiaries – ensuring measures taken by foreign branches and subsidiaries are consistent with the Code.
• Ongoing monitoring of existing business relationships – including reviews of customer due diligence information and scrutiny of transactions.
• Reporting of suspicious transactions – when merited, following a robust assessment of the circumstances.
• Maintenance of adequate records – in terms of completeness, format, location, and period of retention, including a register of all enquiries made to the institution by the investigating authorities.
• Adoption of adequate internal controls and communication procedures – including written procedures for preventing money laundering and a register of all disclosures made by the relevant person to the investigating authorities.
• Maintenance of procedures and controls to prevent the misuse of technological developments for money laundering or terrorist financing.
• Screening of staff – in order to be satisfied as to the integrity of new directors or partners and new appropriate employees.
• Appropriate training for employees – to educate them on a regular basis about money-laundering techniques, their obligations under the law, the internal procedures to forestall and prevent money laundering, and the procedures to follow if money laundering is known or suspected.
• Appointment of an MLRO who is sufficiently senior in the organisation and has full access to the board. The MLRO is responsible for the reporting procedures and maintaining all internal and external disclosures in relation to money laundering and terrorist financing. A deputy MLRO should also be considered.
• Establishment of internal reporting procedures – relevant businesses must establish written internal reporting procedures that cover:
1. to whom staff should report suspicious transactions;
2. the establishment of a reporting chain;
3. the appointment of an MLRO;
4. the MLRO’s access to all relevant information, which the MLRO should take into account;
5. the prompt reporting of suspicious transactions by the MLRO as soon as practicable to the Financial Intelligence Unit; and
6. the establishment of a register recording certain minimum information.

Civil Penalties

Any person who contravenes the Code shall be guilty of an offence and liable:

• upon summary conviction, to custody for a term not exceeding 12 months or to a fine not exceeding GBP5,000; or
• upon conviction on information, to imprisonment for up to two years or to a fine, or both.

Where an offence under the Code is committed by a body corporate, an officer of the company can also be found guilty of the offence if it is proved that the offence:

• was committed with the consent or connivance of said officer; or
• was attributable to neglect on the part of an officer of the company.

Offences and penalties under the Proceeds of Crime Act 2008

Offences concerning criminal property under the Proceeds of Crime Act include:

• concealing, disguising, converting, or transferring criminal property or removing criminal property from the Isle of Man;
• entering into, or becoming concerned in, an arrangement that the person knows or suspect facilitates the acquisition, retention, use, or control of criminal property by – or on behalf of ‒ another person; and
• acquiring, using, or possessing criminal property.

Any person found guilty of such offences will be liable to:

• custody for a term not exceeding 14 years and/or an unlimited fine for a conviction on information; or
• custody for a term not exceeding six months and/or a fine not exceeding GBP5,000 for a summary conviction.

In addition, there are a further two relevant offences under the Proceeds of Crime Act 2008:

• failing to disclose knowledge or suspicion that another person is engaged in money laundering due to information that came to them in the course of “business in the regulated sector” (which includes the business of providing online gambling); and
• tipping off.

Any person found guilty of either offence will be liable to:

• custody for a term not exceeding five years (two years for tipping off) and/or an unlimited fine for a conviction on information; or
• custody for a term not exceeding six months (three months for tipping off) and/or a fine not exceeding GBP5,000 for a summary conviction.

Offences and penalties under the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Act 2018

A person who commits an offence under this Act for which no penalty is provided elsewhere in this Act is liable on summary conviction to a fine not exceeding GBP5,000 or custody for a term not exceeding six months, or both.

Proceedings in relation to any contravention of this Act may not be commenced or continued if the Commission has directed a person to pay a civil penalty under Section 22 for such contravention, unless the person has declined to pay the civil penalty.

The GSC is the regulatory authority for advertising by operators.

“Advertisement” includes every form of advertising or promotion, whether via:

• the internet;
• a radio or television programme;
• a message (whether broadcast or not) in a written or printed publication;
• the display of notices, signs, labels, or showcards;
• circulars or other documents; or
• any other medium.

Land-Based

Per Section 7 of the GBLA, it is an offence for a person to issue (or cause the issue of) any advertisement that:

• informs the public that gaming takes place, or is to take place, on the premises;
• invites the public to participate in any such gaming;
• invites the public to subscribe money or money’s worth to be used in gaming on the Island or elsewhere; or
• invites the public to apply for information about facilities for subscribing any money or money’s worth.

This wide-ranging prohibition on the advertising of gaming is subject to an equally wide set of exemptions. The following are key examples of such exemptions.

• Casinos – a land-based casino can advertise itself and its games. The advertising is controlled and subject to specific casino advertising regulations.
• Prize machines – controlled machines, more commonly known as slot machines, may be advertised.

Online

Operators of online gambling sites must comply with the Online Gambling (Advertising) Regulations 2007. Every advertisement must comply with the following general requirements:

• it shall not be indecent or offensive;
• it shall be based on fact;
• it shall not be false, deceptive, or misleading in any material particular;
• it shall not contain any statement as to the legality (or otherwise) of online gambling or any kind of online gaming, online betting, or the like in any other jurisdiction;
• it shall not be directed at any jurisdictions in which online gambling or any kind of online gaming, online betting, or the like is prohibited;
• it shall not have any sexual content;
• it shall not be directed at persons under 18;
• it shall not contain any material in breach of copyright; and
• if it makes any claim as to the potential payout or win in relation to any online gambling, it shall contain sufficient information to enable a person to determine readily and easily the expected percentage return to them over a period of time, disregarding any exercise of skill by them.

See 9.3 Key Legal, Regulatory and Licensing Provisions.

Section 7 of the GBLA sets out restrictions on advertising in relation to gaming. See 9.3 Key Legal, Regulatory and Licensing Provisions for further details regarding Section 7 of the GBLA.

Any person who contravenes Section 7(1) of the GBLA shall be guilty of an offence, which may result in a custodial sentence or fine (or both).

The advertising of a land-based betting office is also restricted and must comply with GSC guidelines and the GBLA. Any person – or, in the case of an advertisement in connection with the office or offices of a particular licensee, that licensee – who publishes an advertisement or causes or permits it to be published in contravention of such provisions shall be guilty of an offence, which may result in a custodial sentence or a fine (or both).

In case of a breach of the advertising rules for online gambling, the operator and the designated official can be subjected to a fine of up to GBP5,000.

If subsection (6) is contravened, any person who published the advertisement or caused or permitted it to be published – or, in the case of an advertisement in connection with the office or offices of a particular licensee, that licensee – shall be guilty of an offence.

There are no recent or forthcoming changes.

The GSC must be notified when any of the following occur:

• a designated official ceases to be a director of the licence holder;
• a new director is to be appointed to the company;
• the beneficial ownership or ownership structure of the operator is to be changed;
• an official (DO, OM, or MLRO) dies; or
• the licence holder is targeted for a merger or a takeover bid in which the beneficial owners or officials are likely to be reviewed or changed.

Beneficial owners and new directors may not become involved in an Isle of Man licensed gambling operation until the GSC has conducted and concluded its diligence checks. All changes in ownership must be notified to the GSC. Any changes to a shareholding interest that is over 5%, where the licence holder is a private limited company, require prior approval from the GSC. A 20% threshold applies where the licence holder is a publicly listed company.

See 10.2 Change of Corporate Control Triggers.

OGRA – Online Gambling

Certain procedures must be completed before certain key personnel can begin their duties. These are detailed below.

Changes in beneficial ownership

Beneficial owners may not become involved in an Isle of Man licensed gambling operation until the GSC has conducted and concluded its diligence checks. All changes in ownership must be notified to the GSC. Any changes to a shareholding interest that is over 5% where the licence holder is a private limited company requires prior approval from the GSC. A 20% threshold applies where the licence holder is a publicly listed company.

Changes in designated official or operations manager

New designated officials and operation managers may not commence their duties until they have been approved by the GSC.

Changes in directors

All directors of an operation must be approved by the GSC before they commence their duties – see Guidance for Online Gambling for further details.

Casino Act 1986

Section 4(3)(b) of the Casino Act 1986 provides that “the holder of the licence, if a body corporate, shall notify the board of any change in the beneficial ownership of any relevant share capital in the body”.

Section 4(3)(c) of the Casino Act 1986 provides that “where the holder of the licence is a body corporate, that no person shall be appointed to be a director of the body unless the board is satisfied that he is a person of integrity”.

Gaming Betting and Lotteries Act 1988

Section 16 of the GBLA provides: “Schedule 1 shall have effect in relation to the grant, transfer and renewal of, and other matters relating to, bookmakers’ permits and betting office licences.”

Schedule 1 paragraph 15 provides the following.

• “(1) Where the holder of a permit is a body corporate:
1. no person shall be appointed as a director thereof, except with the prior approval of the Commission; and
2. the body corporate shall not permit the acquisition by any person of a majority of its issued share capital, except with the prior approval of the Commission, and, where the person acquiring such share capital is a body corporate, sub-paragraph (a) shall have effect as if that person were the holder of a bookmaker’s permit.
• (2) If the holder of a permit is a body corporate and any person is appointed a director in contravention of sub-paragraph (1)(a), or the holder of the permit fails to comply with sub-paragraph (1)(b), that person or the holder of the permit, as the case may be, shall be guilty of an offence.”

See 10.2 Change of Corporate Control Triggers.

The GSC’s powers of enforcement include:

• suspending, varying or cancelling the online gambling licence;
• removing approval of key officials of the operator;
• obtaining an order from the High Court for disclosure of the beneficial owner of an operator;
• the power to enter any premises that it has reasonable cause to believe are, or have been, used for any purpose connected with online gambling;
• requiring any person to produce any documents or other records relating to – or connected with – the conduct of online gambling, and to take copies of such documents or records;
• requiring any person to provide the GSC with access to any computer programme used – or to be used – in connection with online gambling; and
• obtaining a warrant from a justice of the peace to enter and search premises.

Proceedings for offences under the OGRA or the gambling regulations can only be instituted by – or with the consent of – the Attorney General. The proceedings would then be instituted through the Island’s criminal courts.

Financial penalties are calculated and enforced by the Isle of Man courts as court fines.

See 11.3 Financial Penalties.

Corporate Tax

Isle of Man companies are subject to tax on their worldwide income. The standard rate of corporate income tax in the Isle of Man is 0%.

VAT

Online gambling is exempt from VAT. The current VAT rate is 20%. Specialist VAT advice should be sought because, as a result of Brexit, the VAT landscape has changed for the better for online gambling companies that are operating from the Island.

Gambling Duty

Gambling duty is charged as a percentage of gross gaming yield or retained profit on online gambling, pool betting and betting. It is not charged on:

• gambling on gaming machines, which are subject to machine games duty;
• gaming in a casino;
• bingo, unless conducted online; or
• on-course betting or National Lottery games.

Gross gaming yield means the total amount of all bets or stakes made and the price of all chances sold in the course of gambling – minus the value of all winnings and prizes due.

Gambling duty is generally charged on the gross gaming yield basis. The exceptions to this general rule are the following forms of gambling, which are charged on the retained profit basis:

• prize draws, prize competitions, or lotteries;
• poker or other games where individual players play against one another using systems or facilities provided by the operator;
• sponsored pool betting and pari-mutuel betting that employs the use of a totalisator, or any form of pool betting;
• a betting exchange;
• where the operator acts as a bet-broker; and
• spread betting.

The rates of gambling duty are as follows:

• for gross gaming yield or retained profit not exceeding GBP20 million per annum – 1.5%;
• for gross gaming yield or retained profit of more than GBP20 million per annum, but not exceeding GBP40 million per annum – 0.5%;
• for gross gaming yield or retained profit exceeding GBP40 million per annum – 0.1%; and
• the prescribed proportion of gross gaming yield for pool betting is 15%.

Machine Games Duty

This is payable by any person or organisation that operates machine games. In general, machine games are fixed-odds betting terminals, slot machines and quiz machines, where the prize can be bigger than the stake.

The operator of the machine is required to register with Customs and Excise and account for the duty. Machine games duty is 15% of the net takings (profit) on an inclusive basis.

The Island’s legislation and regulation is constantly being kept under review. Any future changes are likely to be driven by changes in technology or updates to the AML requirements.