eGaming Licensing

  • What is the process to obtain a licence?
    In principle, the process of establishing the business and obtaining the licence is relatively straightforward. 

    We liaise with the registration agent to open the local company and discuss the business model with the client to agree to the document drafting parameters at the earliest possible opportunity, so we can move forward with drafting and collating the suite of documents that make up the licence application and troubleshoot any potential pitfalls. 

    Based on the discussions we start the process of drafting a neatly knitted suite of documents that form the basis of the application. From the date we commence work, we would schedule having a suite of documents ready and submitted within three weeks. 

  • What are the requirements for a gambling licence?
    The basic requirements of an Isle of Man licence are as follows: 

    a) establish an IOM company – SolutionsHub will manage this process and work with a local corporate service provider in order;

    b) have at least two local directors, who must be individuals and not corporate entities;

    c) appoint at least one resident Designated Official (“DO”), or where that Designated Official cannot reside in the Isle of Man, an Operations Manager (“OM”) – we usually fulfil the role of an on-island Operations Manager unless you intend to relocate a senior employee to the Island;

    d) either register players on Isle of Man servers or they must operate under a network services licence which obliges them to establish the network services in the Isle of Man (Except in the case of software supply only licences where no play must take place on Manx servers);

    e) gambling and trading accounts should be located in a bank in the Isle of Man unless otherwise agreed. Banking outside the Isle of Man can also be approved if we have a commercial rationale (such as the group already holding accounts elsewhere);

    f) obtain a legal opinion on target markets – the GSC does not require a copy of a legal opinion, just a copy of a board minute where the directors have considered the legality of offering services into target jurisdictions;

    g) commence online gambling pursuant to this licence within nine months of the licence being granted; and

    h) provide the GSC with a copy of audited company accounts no later than six months after the end of every accounting year.

  • What types of licence are available?
    When going through the gambling licence application process, several types of licence are available.

    Full licence

    Permits all gambling verticals (casino, sports, esports, fantasy, poker, lottery, virtual, live dealer etc) and software supply. 

    Sub-licence

    Can be obtained if the applicant wishes to operate with a technology provider with a full OGRA licence regulated by the GSC. An applicant must still apply to the GSC for their sub-licence but at a reduced cost of £5,000 per year.

    Network services licence

    Must be obtained if the operator wishes to allow one or more foreign-registered players onto its Isle of Man server without re-registering the player details. 

    Token-based Software Supplier Licence

    Available to B2C and B2B operators that have created blockchain tokens that are intended to be used as the medium of the transaction by those who use the gambling software. 

    Software supplier licence

    Allows the distribution of new content without GSC approval. Games are simply added to the central register and freely added by customers. In addition, software suppliers licences can be a risk mitigation tool for game providers to ensure their resellers are legitimate and take the regulatory risk of software supply to non-regulated market operators. 

  • Do I need to make a new application to add more verticals?
    No. One only needs to submit updated information and the new vertical will be added to their licence. 
  • What are the benefits of an Isle of Man licence?
    The key benefits of the Isle of Man gambling licence include: 

    a) Speed; 12 weeks to have the application reviewed by the regulator (approval immediately thereafter);

    b) no corporate tax, withholding tax or capital gains tax;

    c) low gaming duty (1.5% max)

    d) granting assurance; we have a 100% success record for licence applications spread over a decade;

    e) no market restrictions; the IOM does not restrict your markets – it is up to the directors to comfort themselves they are operating in markets legally;

    f) banking; not technically a USP, but banking is certainly easier for gaming companies in the IOM. We also have a tried and tested access to foreign institutions for companies licenced in the IOM;

    g) world-class infrastructure, bandwidth and power resilience coupled with excellent data hosting facilities; and

    h) politically transparent and extremely stable with a single-party political system and easy access to politicians who work closely with the private sector through the Department for Enterprise.

  • Are cryptocurrency and blockchain models permissible?
    Yes, and you are in good hands; we are the only professional services business on the island dedicated to blockchain and cryptocurrency business and regulatory solutions. Since obtaining the first decentralised betting licence in 2017, we have gone on to secure almost all ICO funded, crypto betting and blockchain betting licences. 

Designated Business Act

  • What is the Designated Business Act?
    The Isle of Man introduced the Designated Business (Registration & Oversight) Act, in 2015 (the “DBA”), under which we can register a company as a ‘Designated Business’, meaning anyone who undertakes:

    “The business of issuing, transmitting, transferring, providing safe custody or storage of, administering, managing, lending, buying, selling, exchanging or otherwise trading or intermediating convertible virtual currencies, including cryptocurrencies or similar concepts where the concept is accepted by persons as a means of payment for goods or services, a unit of account, a store of value or a commodity.”

  • What is required to register?
    The DBA registration ensures businesses comply with customer/user verification and monitoring standards (applying a “risk-based approach”) while affording them the flexibility of operating unrestricted from a formal regulatory framework. 

    To comply with the DBA requirements, the applicant must; be an Isle of Man Company, appoint two Isle of Man resident directors, have appropriate user onboarding and ongoing monitoring and appoint a suitable Money Laundering Reporting Officer.

  • How long does it take to register?
    The time to register is at the FSA’s discretion, but we regularly experience a three-week turnaround. To ensure a timely registration we submit an additional document covering the sensitive issues not contained within the required registration forms. We also correspond with the FSA where necessary to speed up the process. 

Designated Asset Exchange

  • Can one register and operate a legitimate digital asset exchange from the Isle of Man?
    Yes. Regulation makes the Isle of Man an ideal location to set up a crypto exchange. P2P, OTC, order book matching and other models are acceptable. 
  • What is required to register?
    Exchanges are required to register with the Financial Supervision Authority as a Designated Business. The registration ensures businesses comply with customer/user verification and monitoring standards (applying a ‘risk-based approach’) while affording them the flexibility of operating unrestricted from a formal regulatory framework. 

    To comply with the DBA requirements, the applicant must; be an Isle of Man Company, appoint two Isle of Man resident directors, have appropriate user onboarding and ongoing monitoring and appoint a suitable Money Laundering Reporting Officer.

  • How long does it take to register?
    The time to register is at the FSA’s discretion, but we regularly experience a three-week turnaround. To ensure a timely registration we submit an additional document covering the sensitive issues not contained within the required registration forms. We also correspond with the FSA where necessary to speed up the process. 

Digital Asset Custody

  • Can one register and provide digital asset custody from the Isle of Man?
    Yes. Insured, uninsured, hot and cold storage models are acceptable. 
  • What is required to register?
    Custody providers are required to register with the Financial Supervision Authority as a Designated Business. The registration ensures businesses comply with customer/user verification and monitoring standards (applying a ‘risk-based approach’) while affording them the flexibility of operating unrestricted from a formal regulatory framework. 

    To comply with the DBA requirements, the applicant must; be an Isle of Man Company, appoint 2 Isle of Man resident directors, have appropriate user onboarding and ongoing monitoring and appoint a suitable Money Laundering Reporting Officer.

  • How long does it take to register?
    The time to register is at the FSA’s discretion, but we regularly experience a three-week turnaround. To ensure a timely registration we submit an additional document covering the sensitive issues not contained within the required registration forms. We also correspond with the FSA where necessary to speed up the process. 

Initial Coin Offering

  • Can businesses launch an ICO in the Isle of Man?
    Yes. We have assisted numerous companies to conduct regulatory-compliant token offerings from the Isle of Man. 
  • What are the benefits of conducting an ICO under a supervised framework?
    Perhaps in 2016 one could launch an ICO without disclosing who the founders were, especially as the crypto community accepted the explanation of “privacy: blindly as a legitimate reason for those establishing a new tokenised business to not disclose themselves. However, in 2017/18 we saw too many “pump-and-dump” scams and the ethos has completely swung away from the privacy of the founders to absolute transparency. 

    This has meant that individuals running ICOs are far more concerned with the legal implications of their actions and founders understand that mistakes in the area of Anti Money Laundering & Countering of Terrorist Financing (“AML/CFT”) carry enormous personal risk and unverified source of funds leads to significant money laundering risks, terrorist financing risks and other potentially criminal activities, punishable by a significant custodial sentence. 

    Now we are seeing credible business people launch ICOs who are far more concerned with the long-term value and protecting themselves in a supportive jurisdiction by: 

    a) ensuring the legal integrity of the ICO with international and domestic AML/CFT 

    b) understand and engage with data protection rules

    c) efficient corporate structuring 

    d) reducing risks of receiving the proceeds of crime/terrorism

    e) avoiding non-compliance with local company laws 

    f) working with partners who have access to FIAT banking facilities to pay suppliers and staff

    g) paying professional and layers fees to structure the ICO correctly so they can obtain a listing on premium cryptocurrency exchanges, as failure to do so can result on not being able to list, or later delisted, vastly devaluing the tokens worth for holders

    Demonstrating an ICO is conducted to globally acceptable standards under a reputable financial services regulator is a great way to alleviate fears and ‘hard cap’ the ICO.  

  • Should an ICO take due diligence?
    It is imperative that any ICO engages with regulation and does not ignore or circumvent it. This includes ensuring tokens are sold in jurisdictions it is legal to do so, verifying purchasers in compliance with international AML/CFT standards, accounting properly for cross-border transactions, utilising the best corporate vehicles for the individual project and protecting/utilising data.

    Mistakes in these areas carry enormous personal risk to ICO organisers as unverified source of funds can unwittingly lead to  money laundering and terrorist financing exposure which are criminal activities punishable by significant custodial sentences. Similarly, data misuse, leakage and/or breaches carries disproportionately extreme penalties. Ensuring that the contractual relationships between parties permit the transfer of personal details is the best way to avoid potential fines of up to 5x turnover, or up to €20m, whichever is higher.

    Ensuring the legal integrity of the ICO with international and domestic AML/CFT, data protection, corporate structuring and contractual requirements significantly reduces the risks and protects against non-compliance with local company laws which will result in local authorities closing the Company, or Foundation, inability to obtain FIAT banking facilities to pay suppliers, staff etc., inability to obtain a listing on premium cryptocurrency exchanges, and as has been happening recently, being delisted, vastly devaluing the tokens worth for holders.

  • What is required to register?
    ICOs are required to register with the Financial Supervision Authority as a Designated Business. The registration ensures businesses comply with customer/user verification and monitoring standards (applying a ‘risk-based approach’) while affording them the flexibility of operating unrestricted from a formal regulatory framework. 

    To comply with the DBA requirements, the applicant must; be an Isle of Man Company, appoint two Isle of Man resident directors, have appropriate user onboarding and ongoing monitoring and appoint a suitable Money Laundering Reporting Officer.

  • How long does it take to register?
    The time to register is at the FSA’s discretion, but we regularly experience a three-week turnaround. To ensure a timely registration we submit an additional document covering the sensitive issues not contained within the required registration forms. We also correspond with the FSA where necessary to speed up the process.