Why you need an Isle of Man license for your business (and how to get one)
Why do you need an Isle of Man license?
If you are looking for a Tier 1 license that covers a large geographic area, then the Isle of Man license may be the right choice for your business.
The price is too high for a startup, but if you want to have banks and software providers that other licenses like Curacao or Kahnawake can’t offer, then there’s really no substitute for the Isle of Man license.
How it’s better than the Curacao license? (or any Tier 2 license)
You can do business with more people
You can take advantage of real physical banks like Cayman National and Capital International Bank instead of dealing with EMIs.
Serious players recognize the license
You’ll get an instant credibility because players know that an operator must ensure at all times that player protection arrangements cover all the cash they have in their accounts. This way they don’t have to worry about the winnings you will have to pay.
Players are protected to the extent that even if an operator goes into liquidation, the player’s funds can be returned to the player.
Skilled workforce and an environment of continuous learning for residents and employees, where training for game-specific courses is readily available.
Extensive collection of professional service providers with experience in e-gaming, including lawyers and accountants.
The Isle of Man license comes in four different types:
Full OGRA license
OGRA stands for Online Gambling Regulation Act and is a normal B2C license that all operators must obtain in order to offer games with any element of randomness or chance.
Here is a complete list of games that require an OGRA license:
- Betting exchanges
- Online casino games (roulette, blackjack, slots, etc)
- Live dealing
- Peer to peer games (poker, bingo, backgammon, Mah-jong, etc)
- Mobile phone betting
- Fantasy football (or similar)
- Financial trading (but not spread betting)
- Pari-mutuel and pool betting
- Network gaming
- Certain spot-the-ball style games
- Network services
You can use The OGRA license to apply it to any number of white-label websites. They are treated as if they are different URLs of the licensee, even though control of the URL and its marketing is controlled by a different company and the games may be designed differently to reflect the brand.
If OGRA licensees wish to offer games or other software to operators, they can sign an exclusive agreement that allows operators to apply for the Isle of Man sublicense for as little as £5,000.
So instead of paying full price, an operator has the opportunity to obtain a sublicense for a fraction of the price and start selling products from the full OGRA license holder.
Isle of Man license has a sub-license
A sub-license can be purchased if an Isle of Man-based company wishes to work exclusively with a technology provider that holds a full OGRA license.
An operator can change its business model at any time and upgrade to a full OGRA license.
Network services license
A network services license must be purchased if the operator wishes to allow one or more players registered abroad on its server in the Isle of Man without re-registering the player details.
This license is useful if you decide to move players between different jurisdictions.
For example, you might run another business with a license from Curacao and ten thousand active players. Now you want to offer your clients games licensed in the Isle of Man.
With a network service license, you can avoid the process of re-registration, which would affect your conversion rate.
You can always upgrade your full OGRA license to a network service license at any time if needed.
Token-based software provider license
The token-based software provider license is available to companies that have created blockchain tokens to be used by gambling software users as a transaction medium.
For example, players obtain the tokens to participate in gambling, affiliates are paid with the tokens, and so on.
You can only apply for the Isle of Man license if you pass this checklist:
|Your business must be registered in the Isle of Man.||YES/NO|
|You must have at least 2 resident directors (individuals and not legal entities)||YES/NO|
|You must appoint at least one resident Designated Official (DO), or if this Designated Official cannot reside in the Isle of Man, an Operations Manager (OM)||YES/NO|
|You must either register players on servers located in the Isle of Man or operate under a network services license.||YES/NO|
|Your gaming and trading accounts must be held at a bank in the Isle of Man, unless otherwise agreed.||YES/NO|
|Whether you’re offering games to a player directly or through a third party, the game must be certified by a GSC approved test house.||YES/NO|
*You have to hit all YES’es to apply for a license
- BMM Australia Pty Ltd
- BMM Macau Limited
- BMM North America, Inc
- BMM Test Labs South Africa (Pty) Ltd
- BMM Spain Test labs, S.L.U
- BMM Compliance Singapore Private Limited
- Eclipse Compliance Testing
- Gaming Associates
- GLI Australia
- GLI Europe BV
- GLI LLC
- GLI UK Gaming Ltd
- Global Lab Limited
- iTech Labs
- Quinel Limited
- Trisigma B.V.
First Step – Apply and Pay
A complete application form must be submitted and an application fee must be paid in full. The fee is £5,000
Second step – provide personal declaration form for all key people:
- All shareholders with holdings above 5%
- Investors who invest more than £250,000 or more than 25% of the total amount invested
- The designated officers
- The operations manager
- Any person who’s a shareholder, individual investor, stakeholder, director, AML/CFT compliance officer
- Money Laundering Reporting Officer
- Senior management
If you need a reassurance then The Commission reserves the right to reject any applicant who appears to be establishing a nominal presence in the Isle of Man for the sole purpose of obtaining services or legitimacy.
Step Three – Your Directors will have to vouch
A letter from the Isle of Man based directors vouching for the integrity and background of the key individuals.
Fourth Step – A detailed business plan must be provided.
Once an application is accepted, the GSC will endeavor to complete the process within 12 weeks.
Step Five – Due diligence on individuals associated with the application
Step Six – Pass all business metrics
You must pass a financial account analysis, an ownership analysis, a business terms analysis, and a dozen other investigations to ensure that all critical aspects of your business are on proper footing.
Step Seven – Protect your clients money
OGRA expects the licensee to protect the deposits of players registered in the Isle of Man and ensure that they receive their true and fair winnings. During the application process, the regulator will review the adequacy of the method chosen to ensure that you’ve all the means to ensure this.
Step Eight – Meet your supervisor
Within a few weeks of acceptance of the application, the supervisor may seek an informal meeting with the applicant’s Designated Official(s) to discuss various aspects of the business.
Step Nine – Attend a final hearing
Approximately twelve weeks after formal acceptance of the application, the Commission will attempt to advise the applicant of its decision to grant the license. The Isle of Man company board members, the Designated Officials, and the Operations Manager (if there’s one) must attend this hearing.
Step Ten – “Go-live” Procedure
You’ll be added to the GSC website as soon as the Commission issues the license. From that point, you’ll have a maximum of nine months to go live.
Company taxation in the Isle of Man
|Corporate tax rate for residents||0%|
|Capital gains tax rate||0%|
Withholding tax rate
Online gambling is exempt from VAT, which means that while VAT isn’t due on revenue, VAT is not recoverable on expenses and overheads. The current VAT rate is 20%.
The following obligations apply to a full OGRA license
|What do you pay for||Value|
|For gross gaming revenue up to £20 million per year||1.5%|
|For gross gaming revenue of more than £20 million but not more than £40 million per year||0.5%|
|For gross gaming revenue in excess of £40 million per annum||0.1%|
|For gross gaming revenue from pool betting||15%|
The time it takes to get the license
|Compilation of due diligence documents||1 week|
|Incorporation of a company in the Isle of Man||3 weeks|
|Preparation of the gambling application||1 week|
Note: Evaluation of the application documents by the Gambling Supervision Commission takes 10-12 weeks until the license is granted after submission of the complete application.
Costs of holding a license
In addition to the £5,000 application fee payable at the beginning of the application process, the following costs may be incurred to obtain and maintain an OGRA license.
|А five-year OGRA license||£35,000|
|Network services license||£50,000|
|A token-based software provider license||£50,000|
Additional costs include incorporation of the company, adding key people needed to set up and maintain the company (Two Professional Company Directors, Money Laundering Reporting Officer, Designated Official). As well as taking care of obtaining the license. KYC, AML and CFT guidance
If you are looking for more information about the License of Isle of Man, fill the application below.