Miles Benham | Managing Director & Senior Advocate | Online Gambling in the Isle of Man was originally published on 09 December 2005
Online gambling has come of age. Earlier this year one of the giants of online poker, PartyGaming was listed on the London Stock Exchange with an initial valuation of over £4 billion. The company on the 8th December 2005 reported that it had average daily gross poker revenues of US $2.7 million. For a business that only commenced in 1997 this is a phenomenal achievement.
The online gambling sector is forecast to continue to grow. Christiansen Capital Advisors, LLC have reported that they estimate that the online gambling market generated revenue of approximately US $ 8.2 billion in 2004 and that this will increase to US $22.7 billion by 2009.
What may surprise many people on the Island is that the Isle of Man is one of the leading jurisdictions for online gambling and is arguably the birthplace of the current model of regulated online gambling.
In 2001 the Islands Parliament legalised online gambling and created a licensing system that allows operators to base their businesses on the Isle of Man and benefit from the Islands low taxes and excellent infrastructure. All licence holders are regulated by the Isle of Man Gambling Control Commissioners who ensure that the strict online gambling regulations are followed.
The Islands strong regulatory system is attracting the “blue chip” operators who want to be based in a jurisdiction where their hard earned reputation as market leaders is protected. With the operators are following the support services. The Island is for example home to Microgaming one of the biggest online casino software houses and Neteller plc an online money transfer service which is listed on the Alternative Investment Market (AIM) of the London Stock Exchange.
The Islands reputation as one of the leading online gambling jurisdictions was reaffirmed earlier this year when it was announced that PokerStars (www.pokerstars.com) the world’s largest tournament poker site is relocating its global headquarters to the Island and has been granted an online gambling licence. Since its foundation in 2001 PokerStars has hosted over 10 million poker tournaments, awarded over US$ 1 billion in prize money and dealt over 2 billion hands at its tables.
In addition to the well regulated and safe licensing environment, one key attraction for the leading operators is the Islands excellent telecoms infrastructure. The Island is connected to Britain and Ireland by two rings of self healing fibre optic cable with a capacity of 1.2 tera bits. The network is highly resilient and stable and the enormous bandwidth capacity gives the Island an unrivalled capacity for growth. Internet based businesses are reliant upon the telecoms network and even a few hours down time can spell disaster for a business as with the click of a mouse a customer can switch to a rival web site. By basing themselves on the Island operators can give themselves a competitive advantage over their business competitors who may be operating from jurisdictions with limited or unstable bandwidths.
The Island has all the ingredients in place to enable the Internet gambling industry and its support industries to continue to grow which should help make the Island a true centre for e-business and add another sector to the Islands diversified economy.
