Virtual Casinos Bound for Isle of Man

19 December 2000
Internet gambling regulation took a step forward today with the announcement that the Isle of Man government is well on its way toward regulating e-gambling. The Online Gambling Regulation Bill was approved by the Manx Council of Ministers last Thursday, and is headed to the House of Keys. The legislation is slated for fast track approval, and is likely to receive royal ascent by March, according to Julian Lalor-Smith, the administrator for the Manx Department of Affairs.

The legislation will be very restrictive, Lalor-Smith added, and licenses will initially be limited to three "squeaky-clean" corporations that have "more to lose" in terms of reputation and customer approval than the Isle of Man government would be risking. Although he was unwilling to name any potential licensees, he indicated that a number of companies have approached the government for consideration.

According to the Department of Home Affairs announcement, "The Bill will provide a secure regulatory regime, involving the Gambling Control Commission…the Department of Home Affairs, the Financial Supervision Commission, Data Protection, Treasury and the Isle of Man Constabulary. Licence holders will only be permitted to offer games that are approved by regulation. Moreover, not all games will, necessarily, be available to all licence holders. This will ensure each licence holder is competent to provide each game."

The proposed regulations would require companies to be registered on the island, while designated officials would need to be residents. In addition, license holders must maintain sufficient financial reserves, with an initial £2 million deposit likely to be required.

The regulations also include provisions to protect players' privacy, prohibit sales to minors and prevent money laundering.

Finally, there are substantial player-protection provisions contained in the bill, such as making contracts legally enforceable; developing codes for advertising and the accuracy of any claims made on Websites; and including regulations for the conduct, fairness, and probity of gambling on an e-casino. Regulators would have rights of entry and power to inspect software and all gaming transactions.

The announcement of the proposed Online Gambling Regulation Bill follows the passage of the Betting Offices Bill, which will receive royal ascension soon. A copy of the legislation is not yet available. Under its terms, Lalor-Smith said, a restriction on the number of licenses available has been removed. Also, license holders will be allowed to take bets from punters outside of the U.K. and the British Isles. Further, provisions have been made for the Department of Home Affairs to develop any necessary regulations or requirements.

Click here to read the Isle of Man's proposed Online Gambling Bill.