An Isle of Man gambling license is highly regarded in the iGaming industry and is one of the most desired licenses among operators. It is an excellent location for online gambling businesses due to its liberal laws and competitive tax policy. It also provides operators the benefits of covering all currencies, a single license covering all gambling activities, and the ability to operate in various markets, including the UK.
The Isle of Man is a self-governing British Crown Dependency located in the Irish Sea. It is nestled between England and Ireland. The small island nation is most known for its rugged coastline, rural landscape, and medieval castles. It is also well liked for its economic stability and diversity, including a low-tax economy, making it an ideal spot for businesses, especially gambling operators.
The Gambling Supervision Commission (GSC) is the Isle of Man’s gambling control body. It was founded in 1962 and began as an independent regulator for land-based gambling operations. With the rise of Internet gambling, it extended its responsibilities to cover online activities as well. The GSC became one of the first to regulate online gambling when it created the Online Gambling Regulation Act 2001 (OGRA), which is the main legislation that regulates the online gambling industry within the nation.
The objective of the OGRA is to protect players and support operators of iGaming businesses. To uphold its glowing reputation within the industry, the Isle of Man places strict regulations on its eGaming licensees to ensure the protection of minors, fair gaming practices, and crime-free gambling.
Over the years, the Isle of Man has established itself as a leading jurisdiction (location, administration and regulation) for iGaming companies. In our Isle of Man gaming license review, we’ll provide you with the information you need about how to obtain a B2C (business to consumer) license from the GSC. We’ll touch on the various important aspects, including the different types of licenses, basic application requirements, costs, potential drawbacks and so on.
Isle of Man License Fast Facts
- First gambling license issued – 2001
- Regulator – Gambling Supervision Commission
- License provider – Gambling Supervision Commission
- Number of license types – 4 online gaming licenses
- Approximate license costs – £40,000
- Average time to obtain license – 10 – 12 weeks
- License validity period – 5 years
Types of Licenses – What Licenses Does Isle of Man Offer?
The Isle of Man offers gambling licenses for both land-based and online gambling operations. For the purpose of this review, we will be focusing only on those OGRA licenses that apply to online gaming.
There are four Isle of Man eGaming licenses (three B2C licenses) for which you can apply. These include:
- Full OGRA License – This B2C license is required by any business that wishes to offer licensable gambling activities and/or who wish to supply software. Gambling activities covered under this license include: casino games, bingo, poker, lottery, sports betting, and pool betting. Additionally, operators with a full license can offer technology, such as games, software, networks access to Isle of Man sub-licensees, etc. to sub-licensees. An OGRA license covers all parts of a business at the license-holder level and below. This license does not cover the gambling activities of a parent or holding company or cover the operations of sister companies.
- Sub-License – A business that wishes to operate exclusively with a technology provider with a full OGRA license can obtain a sub-license for a reduced license fee. This B2C license is ideal for smaller operators just starting out who would like to establish and grow their presence. Those who hold a sub-license are tied exclusively to the network operator and can use only the games and products that it has developed. If the sub-licensee would like to use games of another network, they would be required to upgrade to a full OGRA license.
- Network Services License – This B2C license is needed if an operator would like to permit one or more foreign registered players on its Isle of Man servers without registering the players’ details. All the benefits of a full OGRA license are available to a holder of this license.
- Token-based Software Supplier License – This is a B2B (business to business) license required by those who have created blockchain tokens that are intended to be used as the method of transaction by those using the gambling software. More specifically, it’s for operators who require players to obtain tokens to be able to participate in gambling, who pay affiliates using these tokens, etc.
In essence – in terms of a B2C license – the full license gives you the power to operate B2C. However, if you wish to accept players from other jurisdictions’ licensees without having to re-register them, a network license may be a better choice. On the other hand, if you’re a small start-up looking to save money while you establish and grow your business, a sub-license lets you run your operation using the technology and games of a full OGRA licensee. It can be an ideal license to start with until you’re ready to obtain your own full license. Thus, the type of license you will require depends on the type of business you intend to run.
All licenses are valid for 5 years and each one requires the licensee to pay an annual fee. These costs will be discussed later in our review.
The License Process – How Do I Get an Isle of Man Gambling License?
An Isle of Man online gambling license is granted by the Gambling Supervision Commission. Any company that wishes to apply for a license must submit their application and corresponding fee to the Inspectorate. There are several elements to the application that are required. We’ve outlined the basics below.
Requirements for obtaining a license
Step 1 – Establish your company in the Isle of Man
You will need to incorporate your company in the Isle of Man. Your company is required to have two resident Directors. A Designated Official or an Operations Manger must be an Isle of Man resident. This person can be one of your Directors or a person sourced locally from a service provider.
In addition to incorporating your company in the island nation and appointing two resident Director, as a B2C licensee you must register your players on servers located on the Isle of Man. You must also protect player funds at all times, and all games offered, RNGs (Random Number Generators), and gambling systems must be certified by a GSC-approved testing house.
Step 2 – Due diligence checks
An integral part of the application process is undergoing and passing due diligence checks. Directors, Designated Officials, Money Laundering Reporting Officers, and any beneficial owner who controls 5% or more of your company will be subject to these due diligence requirements.
An applicant(s) must demonstrate that the activities they intend to offer are wholly transparent and credible. As such, each person and company connected to the application is subject to rigorous legal and financial due diligence checks. See the table below for examples of required documents.
All documents requested above must be provided for each key person in the business and all documents must not be older than three months.
Additionally, it is important to note that the GSC may request additional information while they evaluate your application. Other information that may be requested includes proof of business ownership, business model, terms and conditions of contracts, game rules, technical requirements, internal controls of systems, player registration, and so on.
Step 3 – Wait for the application to process
Once the application fee (£5,000) is paid and all necessary application forms are filled out and submitted, on average it takes between 10 – 12 weeks for the license request to process.
This typical 10 to 12-week period begins with the Inspectorate issuing a letter stating that the application has been accepted and processing the application is underway. If the application is approved and no more information is required, you will be granted an Isle of Man gambling license.
License Costs – How Much Does an Isle of Man License Cost?
The Isle of Man gaming license cost varies depending on the license you select. The fees that you will be required to pay include:
- Application fee
- License fee (annual)
- Personal income tax
- Gambling duty
The following table outlines the costs of B2C licenses in greater detail*.
To put this into clearer perspective, a full OGRA license will cost approximately £40,000 to start (the £5,000 application fee and £35,000 license fee). Each year after (factoring in the maximum personal income tax rates and £20 – £40 million GGY duty), it will cost £210,000 + 0.5% GGY duty.
On the plus side, the gambling tax policy is very competitive and there is 0% capital gains tax. Moreover, though there is a 20% VAT rate, online gambling is exempt from VAT on income.
*Note: Keep in mind that all fees listed above are solely for informational purposes to provide you with an overall idea of cost. Fees may vary and are subject to change.
Licensee Regulations – What Rules Am I required to Follow?
As a licensee you will be required to follow all laws, rules and stipulations that pertain to the specific license you hold. Ultimately, this means complying with conditions that include anti-money laundering procedures, KYC (Know Your Customer) security measures, responsible gambling measures, preventing criminal activities, etc.
The Gambling Supervision Commission also requires operators to put certain protocols in place to protect player funds. This isn’t only to ensure that players are paid what they win and are paid in a timely manner, but also in the event the business goes bankrupt. As such, operators must set up a separate account where the money players deposit is held to ensure that in the event of insolvency, players will have their money returned to them.
Every one of the mandatory requirements that must be upheld by a licensee is regularly checked and audited by the GSC.
In what regions does this license allow me to operate?
With a full OGRA Isle of Man network services gambling license you can technically operate in any region where online gambling is not forbidden. As the Isle of Man has been whitelisted by the UK Gambling Commission, you are also able to advertise to residence in the UK.
That being said, if you intend to operate in regulated markets, such as the UK, keep in mind that you will be required to adhere to local laws. This could mean – among other aspects – being required to obtain the appropriate permissions or license(s) from the specific jurisdiction’s governing regulatory body.
Some examples of regions where you may require additional local permission/licenses include (but are not limited to): Sweden, Denmark, Spain, Italy, France, Romania, as well as certain US states and certain provinces in Canada where online gambling has been officially legalized and regulated.
License Pros and Cons – Is an Isle of Man License Right for Me?
Is an Isle of Man iGaming license right for you? The best way to decide if a license from this jurisdiction (or any of the world’s other respected online gambling control boards) is to first weigh the main benefits and drawbacks.
Isle of Man gaming license advantages
- All game types covered – A single licence covers all types of gambling activities, including casino, sports betting, pool betting, bingo, poker, and lottery.
- Foreign players are accepted – You can offer your products and services to players in foreign markets with an Isle of Man network license.
- All currencies are supported – This doesn’t only include popular fiat payments like credit/debit cards, eWallets, prepaid cards and bank transfers, but also cryptocurrencies like Bitcoin, Ethereum, etc.
- You can advertise in the UK – This license has been whitelisted by the UK Gambling Commission, which means you can advertise to UK residents. It also allows you to operate in other markets where online gambling is not forbidden, though you may be required to adhere to laws from local regulators.
Isle of Man gaming license drawbacks
- High annual fee – The annual fee is higher than other jurisdictions and is something you will need to factor into your yearly business budget, while also keeping in mind you will need to renew the license every 5 years, which will be another fee. However, many who have this this license often find that the benefit of holding one is worth the cost.
- Licensees subject to taxes – As a license holder you are subject to 1.5% tax on gross gaming yield, up to £20,000,000. Though this tax policy is competitive compared to other jurisdictions, there are other gaming control boards that have no tax at all for international businesses such as Antigua and Barbuda and Kahnawake.
Isle of Man Gambling License FAQ
Yes. Operating without an iGaming license is illegal and can land your site on block lists, lead to fines, and possible jail time. Although you do not need to get a license from the Isle of Man, you should obtain one from a reputable jurisdiction, such as one of the others you’ll find among our gambling license reviews.
The type of license you need will depend on the type of gambling business you intend to run. That being said, most operators will need a full OGRA license, which covers all types of gambling activities, software etc. However, smaller operators may benefit from a cheaper sub-license.
The license costs a minimum of £40,000. That said, cost depends on the type of license you get. It’s also important to keep in mind that there are other fees to consider, including annual fees, personal income tax, and net profit.
On average it takes about 10 – 12 weeks for the application to process and for a license to be granted.
An Isle of Man gaming license provides several benefits. Among these include all gambling activities are covered by one license, all currencies are supported, you can operate in a variety of markets, and the tax policy is relatively competitive.
How Can Casinnovate Help Me Get an Isle of Man License?
Although you do not require representatives, such as lawyers or corporate service providers to apply for or make your Isle of Man license application through them, these professionals can perform much of the administrative procedure on your behalf, which can make the complex application process easier.
Attaining the help of professionals who are experienced with the Isle of Man gaming license procedures can also help to ensure that no mistakes are made during the application process, improving your chances of being granted a license.
Casinnovate can help you connect with the professionals who can assist you in the licensing procedure and/or who can provide you with software and services that are compliant with this jurisdiction’s eGaming laws. Some of the reputable software providers and companies we recommend include:
2WinPower
Metric Gaming
Do you have more questions about an Isle of Man gambling license? Or are you curious about other ways that Casinnovate can help you enhance your existing business or assist you in getting your first online casino or online betting operation off the ground? Get in touch with us today!
