Presentation to ICSA29 March 2011

E-Gaming Law and Regulation

Claire C Milne WSPartner

Chair of Gambling Supervision Commission

Overview

• The industry in the Isle of Man.

• The GSC – who we are and what we do.

• The legislation.

• Update on past 12 months.

• The future.

The E-Gaming Industry in the Isle of Man

E-Gaming Success

2006 2007 2008 2009 2010

Employment

230 360 460 543 652

Spending £60m £70m £91m £123m £154m

Taxes * £3m £4m £5m £11.2m £19.1m

*Income Tax, NI and Gaming duty

Source: MEGA Survey

GSC

• Originally established in 1962.

• Statutory Board under the Gambling Supervision Act 2010

• Remote and land based gambling. 25 online licence holders; all bookmakers; controlled games; Casino.

• 4 members plus Chair (Chair must be solicitor, advocate, barrister of at least 5 years’ standing).

• Director of Regulation – Steve Brennan.

• Head of Policy and 4 full time inspectors.

GSC – What Do We Do?

• Due diligence on operators, who are the beneficial owners?

• Licensing principles under Gambling Supervision Act 2010 are:-

a) Ensure remote gambling is fair and open;

b) Prevent remote gambling from being a source of crime;

c) Protect the young and vulnerable;

GSC – What Do We Do? Continued . . .

d) Ensure gambling products promoted by operators in the Isle of Man can compete effectively throughout the world.

• Issue licences and post licensing reviews.

• Ensure regulations are complied with – AML/KYC/ring fencing of player funds/fairness of play/software testing.

The Legislation – The Online Gambling Regulation Act 2001

(“OGRA”)• Online Gambling Regulation Act 2001

– covers remote casinos, lotteries and all forms of betting undertaken by means of a telecommunication.

• Excludes:-

a) Insurance and investment business (IPA and FSC).

b) ISPs.

Regulation continued. . .

c) Software developers.

d) Disaster recovery (covered by secondary legislation).

e) Online Gambling (Exclusion) Regulations 2010

Regulation continued. . .

• Operators require to be incorporated in the Isle of Man.

• Designated Official or Operations Manager resident in the Isle of Man (section 10 of OGRA).

• Transactional servers in Isle of Man.

• Banking in the Isle of Man.

• Ring fencing of player funds

Regulations1. Online Gambling Duty Regulations 2007.

2. Online Gambling (Advertising) Regulations 2007.

3. Online Gambling (Prescribed Descriptions) Regulations 2007.

4. Online Gambling (System Verification) (No 2) Regulations 2007.

5. Online Gambling (Betting and Miscellaneous Provisions) Regulations 2007.

6. Online Gambling (Disaster Recovery) (No 2) Regulations 2007.

7. Online Gambling (Registration and Accounts) Regulations 2008.

8. Online Gambling (Licence Fees) Order 2009.

9. Online Gambling (Participants’ Money) Regulations 2010.

10.Online Gambling (Exclusions) Regulations 2010.

Copies available at www.gov.im/gambling/regulatory.xml

Update – Past 12 Months

• Gambling Supervision Act 2010.

• Online Gambling (Exclusion) Regulations 2010.

• Increase in licence holders.

The Future?

• EU

• USA

• Licensing at point of consumer?

Questions?