The Isle of Man’s Gambling Supervision Commission (GSC) and Treasury have approved changes to the island's gambling regulation that allow virtual currencies like Bitcoin to be accepted as cash, according to a report from the GSC’s Mark Rutherford, deputy chief executive. The regulation, called the Gambling…
The Isle of Man’s Gambling Supervision Commission (GSC) and Treasury have approved changes to the island’s gambling regulation that allow virtual currencies like Bitcoin to be accepted as cash, according to a report from the GSC’s Mark Rutherford, deputy chief executive.
The regulation, called the Gambling Regulation Package 2016, includes other changes, such as expanding voluntary gambling controls that an operator can offer players.
The suggested changes remain subject to approval by government drafters, the report noted, although any deviations will be in wording rather than intent.
The regulation classifies cryptocurrencies as property rather than currency.
An operator will be able to accept virtual currencies subject to regulatory safeguards on the safety of the way value is stored and on the protection of value. The GSC also requires an operator’s cryptocurrency exchange to have a reporting requirement to a creditable financial intelligence unit.
Licensees will be allowed to open accounts for players who use convertible virtual currencies. A money deposit is required to open an account using a credit card, debit card or other means the commissioners approve.
GSC has proposed including a change in the phrase “deposit of money” to include the words: “a deposit of money or the deposit of something which has a value in money or money’s worth” where the format of the money’s worth still requires the GSC’s approval.
Another change in the regulation is to clarify that sub-licensees can use all parts of a full licensee’s platform.
One function of gambling companies is to capture and process payment details, categorize AML/CFT risk and capture data for purposes of commercial marketing. The non-gaming functions are known as the “back office” and often are more extensive than the games they support.
An island-based CSP has approached the GSC to license a model whereby a licensee supplies a back office to entrepreneurs seeking to concentrate on games and marketing exclusively. The GSC supports the proposed model but observes that the law originally only anticipated games being supplied.
The model is designed for smaller start-up operations by leveraging the sub-license model, in which the yearly OGRA fee is reduced by £30,000 to £5,000 in exchange for the sub-licensee creating an exclusive partnership with the full licensee.
The law is currently framed so that it can be interpreted to exclude the use of any parts of a full licensee’s platform except for specific games. The GSC wants to broaden the services a full licensee can offer a sublicensee. Full licensees will be able to offer added, non-licensable services as they see fit.
Another change is that the GSC will list jurisdictions and transactional organizations from whom it will recognize test certificates as equal to those of the Isle of Man. Approved testing laboratories that simulate play and ensure payouts and randomness verify the fairness of games offered to the public online. The test lab issues a certificate to the regulator.
The standards required to obtain a certificate vary widely among jurisdictions. The regulation establishes restrictions for accepting test certificates. It has the effect of making it hard to accept certificates issued to other territories’ gambling authorities.
The GSC wishes to accept certificates from approved testing laboratories in regard to non-Isle of Man standards or of any transactional standards that emerge, including those the IAGR multi-jurisdictional testing framework cites.
The legislative drafter that lists the acceptable test standards can administratively maintain certification of the system for gaming and lotteries.
Another change is the creation of a wider choice of controls for gamblers. Operators make functions available with specific options for setting maximum bets or stakes. A player is not permitted to increase any such maximum except after seven days’ notice.
Bet and stake limits are not often used by players, and the controls are problematic in some ways.
A proposed change allows a more effective functionality.
Another aspect of the change addresses the clarification on the protection of winnings.
Still another addresses the ability to offset unused amounts of license fees when upgrading and downgrading license types.
Bitcoin has become well established as a currency for daily transactions on the Isle of Man, a U.K. dependency in the Irish Sea that aspires to be a global cryptocurrency leader, CCN has reported. The Isle of Man, known to some as “Bitcoin Island,” boasts a progressive government, outstanding technological expertise, and an exceptional Internet infrastructure.
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Last modified: January 10, 2020 2:53 PM UTC