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Types of Licence & Basic Criteria

TYPES OF LICENCE

SETTING UP YOUR E-GAMING BUSINESS ON THE ISLE OF MAN 

The Isle of Man OGRA (Online Gambling Regulations Act) excludes certain activities from its scope.

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While restrictions on the following activities may be current in other Isle of Man legislation, an OGRA Licence is not required if you are supplying or offering the following:

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  • The UK National lottery

  • Gambling which is covered by a Betting Office licence

  • Gambling which is covered by a Casino licence

  • Spread betting

  • Activities defined by the Insurance Act 2008

  • Offering pure freeplay games

  • Marketing, market analysis and marketing services

  • Administration

  • Web design

  • Software design

  • Provision of IT services

  • Protection of player funds

  • Provision of IT which just presents the results of play

  • Provision of call centres and customer support

  • Supply of downloaded software

  • Provision of relay servers

  • Hosting disaster recovery facilities

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More detailed information about these exclusions should be researched here, and professional legal advice is always recommend if you are unsure wether your businesses is excluded or falls within other Isle of Man Legislation. 

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LICENCE OPTIONS           COST PER ANNUM

NETWORK LICENCE 

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FULL LCIENCE 

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SUB LICENCE

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B2B SOFTWARE LICENCE 

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B2B TOKEN PLATFORM LICENCE 

£50,000 

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£35,000 

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£5,000 ​

 

£35,000 â€‹

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£50,000 

Licences operate under the same piece of legislation – the Online Gambling Regulation Act 2001. As such all of the licences are consistent in many aspects, and the following is true of all of the licences offered –

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  • All licences cover all gaming verticals

  • Applications are processed in 8-12 weeks if there are no unexpected issues

  • There is a £5,000 application fee

  • Cryptocurrency and digital assets viable as stakes/deposits/withdrawals across all licences

  • If your business model involves registering players and taking bets, you will require one of the three following licences.

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FULL LICENCE 

The Full licence could be considered the ‘standard’ licence. Full licence holders register their own players and keep their player data, and are responsible for anti-money laundering (AML) and know your customer (KYC) requirements relating to them. The Full licence costs £35,000 per annum, and Full licence holders can also allow other businesses to either Sub-licence or White Label under them.

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SUB LICENCE 

Sub licensees must enter into an agreement with a Full licence holder in order to operate, and they can only offer games they have
either produced in-house and/or games the Full licensee has the rights to offer. However, the Sub-licence fee is only £5,000 per annum, White Labels can be offered, and Sub-licensees keep their player data – although they are responsible for their AML and KYC compliance as though they were a Full licence holder.

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NETWORK LICENCE 

Network licences operate the same as Full licences, however Network licence holders have more B2B options to complement their opportunities to Sub-licence and White Label. Network licence holders can enter into agreements with other operators located in other jurisdictions, who become known as Network partners once these agreements are in place. Network licence holders can then allow the Network partner’s registered players to play their games without being required to reregister them, and they also do not have any AML or KYC responsibilities for these players, as this lies with the Network partner. No fees are due to the Gambling Supervision Commission (GSC) for adding Network partners; however they do need to be reassured about the Network partner’s controls before being added. Network partners are not liable to pay any duty or fees to the GSC. A revenue sharing agreement between the Network licence holder and Network partner is generally in place and normal practice. The Network licence costs £50,000 per annum.

B2B SOFTWARE LICENCE 

If your business model involves selling services to other e-Gaming businesses, you can elect to apply for the Software Supplier licence.

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Due to industry demand the GSC released its Software Supplier licence in February 2019. This licence is elective rather than mandatory, however many software businesses choose to become licensed in order to demonstrate adherence to top-tier Isle of Man standards, thus giving reassurance to B2B partners such as operators, banks, payment processors, investors, shareholders and others. Further to this, a software supplier holding a licence can have their products listed as approved on the GSC’s website, and any IOM B2C operator can then deploy these games on their site withoutneeding to acquire RNG testing certificates, as the GSC will have already received these from the software supplier.

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As well as software developers, the licence can also be applicable to other service providers in the gaming industry such as affiliates and live dealer studios, who may also benefit from the reputation of the Isle of Man’s regulatory standards, along with their B2B partners.

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Some of the standard licence conditions do not apply to the Software Supplier licence, i.e. those which relate to player registration such as server location, KYC and AML, as no player data is held. If player data is held you will require a B2C licence. No gaming duty is due as no bets are taken, however other requirements such as having directors located on-Island still apply.

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There are two types of Software Supplier licence –

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1. Standard fiat platforms/software - £35,000 per annum

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2. Token/blockchain enabled platforms/ software - £50,000 per annum

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For blockchain enabled platforms, applicants must meet further conditions not applied to fiat platform applications –

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  • Applicants must prove their understanding of their technology

  • Tokens must be available and not in development

  • A news blackout will be enforced throughout the application process in order to prevent attempts to inflate the value of tokens

WHITE LABEL 

As White Labels are treated as non-licensable, there are no licence fees or gaming duty due. Also, as no player data is held, there are no AML or KYC responsibilities to take care of. These duties would generally be performed by the licensee offering the White label. Under a White Label arrangement your business would market a website, from which the services provided are processed by a licence holder, and thus all regulatory responsibility would lie with this licence holder. A revenue sharing agreement would generally be in place between this operator and your business. At times and where pre-agreed, an exit strategy may be arranged whereby the White Label can take the player data they have generated with them when their relationship comes to an end with the licensed operator. White Labels can typically go live within 4 to 8 weeks and can be a good introduction to the sector. 

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Read more from this source here

BASIC CRITERIA

In order to apply for an Isle of Man Online Gambling Regulations Act 2001 (OGRA) Licence, the following conditions must be met:

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  • A company must be incorporated in the Isle of Man

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  • There must be two local Directors

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  • A resident Designated Official or if the D.O. is not resident then there must be a resident Operations Manager. These can be the same person as the resident Directors and if necessary can be sourced locally from a service provider

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  • All player registration must take place on servers located on the Isle of Man for B2C licensees

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  • An application fee of £5,000 is paid and all relevant application forms are completed

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  • Player funds must be protected at all times for B2C licensees

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  • All games, RNGs and gambling systems must be certified by an approved test house. A list of approved testing companies is available on the Gambling Supervision Commission’s website: www.gov.im/gambling

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  • Directors, D.O., Money Laundering Reporting Officers and beneficial owners owning 5% or more of the company will be subject to Due Diligence obligations

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Once the GSC is satisfied that a complete application has been received, it will typically process the application within 10-12 weeks. This period officially begins when the GSC issues a letter stating that your application has been accepted and the process is underway.

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