While other countries around the world adapted existing gambling laws for online gaming, the Isle of Man was among the first places to create new legislation specifically for the online market. The Online Gambling Registration Act (OGRA) of 2001 was crafted to draw business to the island, but also with player protection at the forefront of its implementation. The new laws were created by the existing gambling body, the Isle of Man Gambling Supervision Commission (GSC), which has a history dating back to 1962.
The GSC requires online gaming companies to have an OGRA licence for the following:
The GSC is aware that there may be more to offer than is covered by the OGRA, and accepts all proposals on other activities.
The Isle of Man’s online gaming industry tripled in size from 2006 to 2011. By this point it was employing over 700 people, nearly 1% of the island’s total population, while also adding £150m to the country’s coffers. Some of the employees had moved over from the financial sector, which is the biggest industry and driving force in the Isle of Man’s economy, as well as the one which was hit hardest during the financial crisis.
Perhaps as a direct result of the crisis, the Isle of Man amended its gaming laws in 2010, creating the Online Gambling Exclusions Regulations. The change allowed online gaming firms to perform non-gambling endeavors, like advertising, payment solutions, or software downloads on the island, with no online gambling licence required.
Due to its independent status, the Isle of Man is able to offer companies a number of incentives to move their business there, including VAT exemption, 0% corporation tax and low duty on the gross gaming yield (currently 1.5% on the first £20 million per annum) 0.5% on the next £20 million per annum and then 0.1% on anything above £40 million. Added to this is the country’s strong reputation among both businesses and players and its position on the UK’s white-list of reputable gaming jurisdictions.
The Isle of Man held an AAA rating from S&P until 2011 and from Moody's until 2013, when it was downgraded by one notch following the financial crisis after the firms deemed the country too vulnerable to external shocks due to its small size and undiversified economy.
While the downgrade of the S&P rating was a small blow to the Isle of Man’s reputation as a whole, the online gaming industry seems unfazed by the whole episode. The growing presence of the online gaming sector has led to £1bn of both public and private investment in telecoms infrastructure on the island. It is this, alongside the various tax sweeteners offered by the British Crown dependency, which brings companies to nest in the Irish Sea.
What's more, the recent introduction of the United Kingdom Point of Consumption Tax, which is based on the location of the player, not the company, has not affected the Isle of Man as much as other online gambling jurisdictions because the majority of gamers using Isle of Man operators live outside the UK.
Online gaming firms, not only from neighbouring countries but from around the world, especially the Asian market, find the Isle of Man to be an attractive proposition, mainly due to the tax breaks the island offers. Mahjong Logic Ltd is just one example of an organisation that has chosen to base themselves on the island. Beyond offering a suitable home to online casinos and bookmakers, big-brand game development companies such as Microgaming and Playtech have offices there too, as do gaming software solution firms like Iforium and Continent8.
One of the biggest events that takes place on the island is the Isle of Man TT, which attracts tens of thousands of visitors each year as well as a huge amount of sports betting.
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