Big Debate: Can the Isle of Man become Europe’s premier igaming licensing hub?

Yes

                   

Mark Robson, former head of e-gaming, Isle of Man Department of Economic Development

Clothing, food, transportation – in fact, most things in life – seem to follow a cyclical trend, and licensing appears to be no different. At the start of this industry, a single ‘.com’ licence was all that was needed to launch your site into a global player pool. Then ‘.country’ licensing gained momentum and sites had to secure accreditation from most jurisdictions their players reside in. At the time, this resulted in gaming companies refining their marketing and customer relation management strategies, with many of them choosing to focus their efforts on core markets. This in turn led to a view of the regulators that facilitated the infancy of the industry now having less relevance. The increased cost of regulation no doubt has contributed to the continued consolidation seen in our industry, and this sees no sign of abating. A broad spectrum of financial interest has also been seen from typically conservative sectors too, with ‘blue chip’ investments becoming increasingly prevalent, with shares in gaming companies traded daily on the international stock exchanges. With the significance of the role companies outside of our industry now play in daily operations (banking, KYC, data control, etc.), the broader position of an entire country’s reputation is seen as comparable to that of its gambling regulator. In this respect, the Isle of Man reinforces its position – not only by being the only global licensing jurisdiction where no player has ever lost money as a result of an operator becoming insolvent, but by also having long-standing partnerships and treaties with the world’s leading countries and financial centres. Add to this its consistently high rating by industry monitors like Moody’s and S&P, and this really is an island that punches well above its weight. When considering all of the above, a broader question should be considered: ‘Can the Isle of Man remain a premier igaming licensing hub?’ Absolutely!

No

Reuben Portanier, partner, Afilexion Alliance

                        The Santa Casa vs Bwin European Court of Justice case in 2010 initiated a domino effect in the licensing evolutionary process across the EEA. It had set the start for EEA states to forgo the EU Treaty principle to provide services freely across the EEA, giving birth to country-based licensing frameworks. That case shifted the paradigm of having European ‘licensing hubs’ to that of European gaming hubs from where gambling companies establish themselves and operate across European countries from the country of establishment, by holding licences in the other European jurisdictions. The Isle of Man enjoys international repute and is currently attracting many operators, but it will be very difficult to become a large ‘licensing’ European hub for two reasons. • Geopolitical: The Isle of Man was not part of the EEA, unlike Malta. The latter managed to develop itself into Europe’s largest gaming hub due to its robust regulatory framework (which Isle of Man has as well), but also due to it being an EU Member State. Not being part of the EEA does not allow gaming companies in the Isle of Man to exploit the EU Treaty principle of Freedom of Establishment, and thus they cannot automatically apply for a licence in an EEA country using the Isle of Man company. The Santa Casa vs Bwin case greatly diluted the concept of a European licensing hub, however it did not dilute the Freedom of Establishment concept, which Malta fully exploits. • Strategic: The Isle of Man’s strategy is consciously not positioning as a European licensing hub but is instead promoting its strengths of flexibility, repute, regulatory expertise and innovation to target other parts of the world. Although the Isle of Man is pointing in a direction other than towards being a European licensing hub, their strategy, based on strong, fair and innovative regulation, together with their efforts to create bridges with Asia and Africa, will continue to attract more operators.