The Isle of Man’s e-gaming proposition

October 6, 2016 By


The Isle of Man has always been very supportive of innovative sectors, and this approach has been integral to our economic diversification, resulting in four decades of growth. The e-gaming industry is an excellent example of a sector we have nurtured to success. Established over 15 years ago, e-gaming is now the biggest GDP contributing sector on the Island, representing 16.7 per cent of the economy and growing by 32 percent in just one year- £168m in real terms. We expect to see this trend continuing into 2017, with new licensees relocating to the Island and the growth of existing companies.

Why the Isle of Man?

The global e-gaming industry has been through unprecedented levels of change in recent years, with an ever shifting regulatory environment, disruptive technologies and M&A activity between some of the industry giants throwing up challenges as well as opportunities.

It is therefore more important than ever for operators to choose a jurisdiction that gives them the support they need to help them navigate this shifting landscape, and the Isle of Man has benefitted by offering just that.

A strong regulatory environment is the first and foremost consideration for operators when it comes to selecting a jurisdiction base. The Isle of Man’s regulation and player protection standards are second to none, and we are unique in that no player has ever unlawfully lost money from an Isle of Man based company. We have a regulatory framework that has struck the perfect balance between keeping crime out and providing an impetus for growth.

Another priority for operators is the infrastructure available to them. The Isle of Man public and private sectors have invested significantly to provide a telecoms infrastructure that delivers seamless diversity with low latency, and offers supplier choice. We also have resilient power supplies and an excess of power capacity, producing so much that we sell our surplus back to the UK. As a direct result, an independent survey has verified we can offer the lowest cost hosting solutions of all our offshore competitors, and has resulted in many companies who are licensed elsewhere choosing the Isle of Man as the home for their DR provision.

Furthermore, the Isle of Man offers a very supportive business environment, including corporate service providers, financial advisers, and legal firms which specialise in the sector. It is therefore no surprise that the Island is home to a diverse mix of businesses, from some of the world’s biggest brands like PokerStars and Microgaming, to exciting early stage companies like Nous Global. The Island also has good Intellectual Property (IP) treaties and is a good place to structure IP.

The Government works collaboratively with the sector to make sure it is receiving the requisite support. An excellent example of this can be seen in the Enterprise Development Scheme (EDS) which was launched in April 2016, and offers grants, loans and equity investment for businesses looking to expand or relocate to the Isle of Man, including e-gaming companies. The EDS is structured to support on-Island businesses as well as those relocating, with a mandate to create a real return for the scheme and support the creation of jobs on the Island. It has received a very positive reception from entrepreneurial businesses so far.

Key focus areas for the Isle of Man e-gaming sector

A particularly exciting growth area for the Isle of Man e-gaming sector is eSports, and the Island has been licensing high-quality eSports businesses for more than two years now, including industry leader UNIKRN.

eSports games have changed the way competitive games are played and viewed. Research from SuperData expects the market to reach $1.23 billion by 2019. The transition of eSports into mainstream entertainment has been one of the most interesting developments over the last couple of years. One of the biggest eSports games, League of Legends, was viewed by 36 million people during its broadcast of the 2015 World Champions.

Daily Fantasy Sports (DFS) is another focus area for the Island’s e-gaming sector. DFS games are similar to regular fantasy sports games, but with the entire contest taking place in much shorter time frame. DFS has won significant popularity with players, and media companies have been showing an increasing interest in sponsorship activities. As a result, there has been a steady flow of venture capital going into the DFS industry.

The Isle of Man has been welcoming well-regulated DFS businesses, like Mondogoal for example, who have been licensed in the Isle of Man for over two years, and we continue to see great growth prospects in this area.

What’s next for the industry?

A recent industry report stated that the main challenge facing the global industry during the next five years is understanding consumers’ changing needs and behaviours, and staying close to them.

It will therefore be essential for companies to stay ahead of the curve, and offer creative and exciting products. It will be exciting to see what the industry leaders who are based on the Island come up with, as well as meeting the new businesses at the beginning of their journey.

With this winning combination of established and new, we expect the Isle of Man’s e-gaming sector to maintain its growth trajectory well into the next year, and continue to boost the Island’s economy.

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