Regulator
The regulator in the Isle of Man is Gambling Supervision Commission (GSC). The GSC provides license and regulates all land-based gambling operations (casino, amusement and slot machines, betting offices and lotteries) as well as all online gambling activities.
The first requirement for the international operator to obtain a gaming license in Isle of Man for providing the online services to end-users (players) is to register a company limited by shares incorporated in the Island (OGRA, Section 4(1)).
1. Requirements to the shareholders, directors and share capital
To obtain a gaming license in the Isle of Man for providing online services to players, an international operator must comply with several requirements related to shareholders, directors, and share capital as outlined in local legislation. The GSC is the regulatory body overseeing these requirements. Here’s a breakdown of these requirements based on the Isle of Man’s regulatory framework:
1.1. Shareholders
Corporate and Individual Shareholders: The Isle of Man allows both corporate and individual shareholders. However, there are specific requirements for each.
Due Diligence: Shareholders (beneficial ownership), especially those holding significant stakes, must undergo rigorous due diligence. This involves providing detailed information about their identity, financial background, and any past involvement in criminal activities.
Background Checks: The Isle of Man GSC conducts thorough background checks on shareholders to ensure they are fit and proper persons. This includes assessing their financial stability and business integrity. The GSC conducts background checks to ensure that shareholders are of good repute and have no criminal convictions or history of financial misconduct.
Corporate Shareholders: If the shareholders are corporate entities, the GSC will also scrutinize the corporate entities’ structure and background.
1.2.Directors
To obtain gambling license in Isle of Man operators must adhere to specific criteria regarding directors. There should be evidence of competent and integrity-driven leadership.
Fit and Proper Test: Directors of the operator must pass a “fit and proper” test. This assessment evaluates their integrity, experience, and ability to run the business effectively. The GSC scrutinizes their past conduct, qualifications, and experience in the gaming industry.
Minimum Number of Directors: The Isle of Man requires that the company have at least two directors. At least one of these directors must be a resident of the Isle of Man or have a suitable connection to the Isle of Man.
Qualifications: Directors should have relevant experience in managing businesses and knowledge of the gambling industry. They must demonstrate their ability to manage the operations in compliance with local laws and regulations.
Disclosure and Background Checks: Similar to shareholders, directors must undergo background checks and provide detailed information about their past professional conduct and any potential conflicts of interest.
Ongoing Obligations: Directors are expected to adhere to ongoing obligations related to compliance, reporting, and operational standards. Any changes in directorship must be reported to the GSC promptly.
1.3.Share Capital
Minimum Capital Requirement: The Isle of Man requires gaming license applicants to meet minimum share capital requirements. The exact amount can vary depending on the type and scale of gaming operations. As of the latest regulations, a typical minimum share capital requirement is £100,000, but this can vary based on the specific license type. Operators must ensure they meet these requirements to cover operational risks and ensure financial stability.
Capital Adequacy: The operator must demonstrate sufficient financial resources to sustain its operations and cover potential liabilities. This includes proving that the capital is not only adequate at the time of licensing but also throughout the operation of the business. The GSC assesses the adequacy of share capital as part of the licensing process to ensure the operator can sustain its gaming activities and fulfill financial obligations.
Paid-Up Capital: The capital must be fully paid-up and not subject to any restrictions or encumbrances. The GSC requires proof that the capital has been deposited and is available for use by the company.
Source of Funds: The operator must provide evidence of the source of its share capital. This includes documentation proving that the funds are derived from legitimate sources and not linked to criminal activities.
Key Points for Compliance
Regulatory Compliance: Ensure all aspects of the company structure, including shareholders and directors, comply with the Isle of Man’s regulatory requirements.
Regular Reporting: The operator will need to regularly report to the GSC, including updates on any changes in shareholders or directors.
Ongoing Monitoring: Maintain transparency and regular updates to the GSC regarding any changes in ownership or management.
Operators must draft gambling rules aligned with the jurisdiction, publish them in multiple languages on their website, and develop internal AML/CFT policies for risk assessment and reporting.
Business Plan: A detailed business plan demonstrating the operator’s operational structure, marketing strategy, and financial projections is often required. This helps the GSC assess the viability and sustainability of the proposed gaming operations.
In addition, to maintain its reputation as a safe jurisdiction for gambling, licensees must comply with Isle of Man policies, protect player funds, and follow advertising standards and anti-money laundering policies. Violation of these requirements may result in the revocation of GSC’s license during its five-year period of validity.
2. Licensing procedure and required documents to submit
2.1. Registering a legal entity
For obtaining a license for online gaming the first thing to do is to register a company with the local registry. To do this, it is necessary to appoint at least 2 directors, rent a local office and collect a package of necessary documents. The company registration period is up to 48 hours at a cost of about $130. For an additional fee, there is the possibility of incorporation in 2 hours.
Once the company has been incorporated, a bank account will be opened, then hire local employees for key positions and sign a local office lease.
2.2.License application
After company registration. It is necessary to apply for the online gambling license. For this purpose it is necessary to gather a package of properly executed documents. Among them are as follows:
corporate policy,
software documentation,
articles of incorporation,
information on directors, key personnel, and shareholders
completed personal declarations by directors and shareholders,
proof of criminal record of founders,
copies of passports of owners,
financial statements,
detailed description of all games,
RNG certificate,
policy on the exclusion of minors and players with gambling addiction.
anti-money laundering and KYC policies;
risk management and responsible gaming procedures;
technical specifications of the online platforms.
The package of documents may be supplemented depending on the type of license and services. If it is collected incorrectly or incompletely – the regulator may request additional information. This may increase the time of obtaining a license.
2.3. Submission of the application
The application to the regulator is submitted together with the collected documents.
According to Online Gambling (License fees) Regulations 2023, the fee payable on an application for the grant of a license is £5,250. The annual fee payable by the holder of a license on the grant of the license and on each anniversary of the license is £36,750 (47,000 USD) for a full license or a software supplier license.
Once the application has been accepted, the general time period for a license to be processed is typically 10 to 12 weeks. The inspectorate may request to meet with the Designated Officials and the Operations Manager (where appointed) to discuss the business model and gain an understanding of the key officials with regard to the business being proposed. Assuming there is no delay in the application process, there will be a formal hearing approximately 12 weeks after the application has been formally accepted. Notification will be received as to whether the application was successful shortly after the formal hearing.
You can always reach out to us if you need any help or recommendation to apply for a gaming license in any jurisdiction.
