Although officials within the Isle of Man government aren't commenting, the
Financial Times of London on Monday reported that the three initial
licensees for online casinos in the Isle of Man are Stanley Leisure,
Sportech and MGM Mirage.
MGM Mirage will be the first U.S. gaming company with land-based operations
to open an Internet casino.
An official announcement of the three winners is scheduled for Thursday. The
Isle of Man's Department of Home Affairs has maintained since the beginning
of the application process that it would release no information about those
companies that applied for licenses other than to name the three who are
chosen.
The department on Monday reiterated its previous statements regarding the
application process, saying it received "unprecedented demand" from
operators wishing to move to the island. The department is expected to award
another nine licenses in November, bringing the total number of online
operators to 12 in the U.K. island located in the middle of the Irish Sea.
Park Place CEO Tom Gallagher hinted at a meeting of the Nevada Gaming
Commission in August that his company was one of those who applied for an
online license.
If Stanley Leisure, Sportech and MGM Mirage are indeed the first three
licensees, it is a safe assumption that companies like Park Place and
Harrah's, who were reportedly in the running, will be in the forefront on
round two of the licensing process.
The three chosen for the first licenses will pay a fee of £80,000 (US
$120,000) per year to the Manx government.
The Financial Times' report is of interest considering MGM Mirage's position
in the industry. The company, which was formed last year by the merger of
Mirage Resorts and MGM Grand, is one of the largest U.S.-based gaming and
entertainment groups.
Dan Wade, CEO of MGM, in August said that jurisdictions such as the Isle of
Man had more to offer U.S. companies with large land-based operations than
offshore locales in the Caribbean and elsewhere because of their regulations
and high standards.
According to the Financial Times, Sportech will use its popular U.K.-based
Littlewoods brand for its online casino. Littlewoods, which is based in
Liverpool, offers players football pools, telephone betting and online
gaming.
The announcement of the new licensees comes at an interesting time for
islands in and around the United Kingdom.
Alderney, another island north of the United Kingdom, is in the process of
forming an agreement with Guernsey, another British territory. The agreement
will create six licenses for online casinos by the end of the year.
Alderney, all of 3.5 miles long and 1.5 miles wide, has a working population
of only 1,300 but has already issued several online gaming licenses. It is
targeting online companies as well with its licensing fee structure.
For a comparatively small fee of o£50,000 (US $80,000) per year an operator
can set up an online casino in the jurisdiction. The island is targeting
major names with ties to the United States, Canada and Australia.
The Isle of Man is trying to pose itself as a center for investment by
Internet ventures.
The Financial Times reports that since being left out of the initial three
licenses in the Isle of Man, Park Place has begun negotiations with
Alderney, but remains in talks with the Isle of Man in hopes of securing one
of the licenses that will be awarded in November.
Internet casino licenses are not available in the United Kingdom itself. The
country's Gambling Review Report, published in July, recommended approval of
online casino licenses, though relevant legislation could take years to
enact. The ability of the British mainland to compete with its offshore
dependencies' low-tax regimes is also probably in question.
As self-governing Crown dependencies, the Isle of Man and Alderney are not
part of the United Kingdom and are therefore able to offer online gaming
licenses.