Isle of Man: E-Commerce
Online Gambling Regulations Act 2001
This page was last updated on 24 February 2020.
During 2001 the Department of Home Affairs introduced the primary and then the secondary legislation to legalise the Isle of Man based operation of well-regulated online gambling sites. The primary legislation, the Online Gambling Regulation Act, came into force in May, and four sets of regulations were approved by Tynwald in June. Various sets of regulations were updated in 2004, 2005 and 2006. Isle of Man gambling and e-gaming legislation and regulations can be found here.
The 2001 Online Gambling Regulation Act quickly attracted licence applications, and by the end of 2002, six licences had been issued. However, after this initial success, the Isle of Man saw a steady exodus of prominent online gambling firms in 2003, a situation that many in the industry blamed on an inflexible regulatory environment.
In the early stages, when the Isle of Man opened its arms to online casinos in 2001, it attracted the cream of the online gambling firms, including Littlewoods, MGM Mirage and Sun Online (whose Casino Atlantis online was later bought by Kerzner International). However, the five firms that were initially granted licences dwindled to just one, Littlewoods, after MGM Mirage closed, and Rank Interactive's Hard Rock Casino online moved its operations to Alderney. Earlier in the year, Casino Atlantis also closed, and Actionline's Club Fiore left the island for Canada.
While a lack of access to the potentially large US market (where online gambling is technically illegal) has hampered growth in the industry, some observers have cited the Isle of Man's 'tier one' regulatory status as one of the most crucial factors behind the industry's decline in the jurisdiction.
In January 2004 Irish bookmaker Paddy Power announced that it intended to relocate its London-based telephone betting service to the Isle of Man to take advantage of the more attractive tax regime. The bookmaker had also decided to base its online casino away from the UK mainland, although it has decided to locate it in the Channel Island jurisdiction of Alderney, which does not levy betting taxes.
By May, 2004, it was becoming clear that changes in the regulatory structure of the e-gaming sector in the Isle of Man were being successful in attracting some big name players to the jurisdiction. The government said it had issued six gaming licences in the previous twelve months to firms such as Paddy Power and Chronicle, two of the largest players in the online sports betting sector, attracted by the island's favourable regulatory regime and low duties.