Version: 020415
Editor: Franka Pals
Publisher: Novamedia
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The Isle of Man is located in the Northern part of the Irish Sea, midway between the coasts of Northern Ireland, Ireland, Scotland and Wales. Douglas is the capital of the Isle of Man.`The Island is a British crown dependency belonging to neither the United Kingdom nor the European Union. The Island's ancient Parliament is called Tynwald and has a high degree of domestic legislative and political autonomy. The United Kingdom Government is, by convention, responsible for the conduct of the external relations and defence of the Island.
The Isle of Man has a restricted relationship with the European Union by virtue of Protocol 3 of the Act of Accession of the UK. This extends the European Union legal regime to the Island for limited purposes, principally customs and the movement of goods. The Island neither makes nor receives any financial contribution from European Union funds.
Tynwald is the oldest legislature in the world in continuous existence. It has two branches: the House of Keys and the Legislative Council. The majority of Members sit as independents, and the virtual absence of party politics encourages a high degree of consensus. This has contributed to the remarkable stability of the Manx system.
The government's policy of offering incentives to high-technology companies and financial institutions to locate on the island has paid off in expanding employment opportunities in high-income industries. For the first time in history the Isle of Man is now wealthier than the United Kingdom on a per capita basis, according to the Manx Government's 2001 Policy Review, published October 1st, 2001. Chief Minister Donald Gelling MHK revealed that the Government has finally achieved a key economic target in overtaking the UK in terms of national income (GDP), per head. The target was set in the first ministerial policy document, 'The Development of a Prosperous and Caring Society', in 1987 when latest figures showed Manx GDP per head at just 58% of the UK equivalent.
he Isle of Man became widely know by its TT races, which date back to 1907. Its great history carries many deadly accidents
| Population: | 73,489 (July 2001 est.) |
|---|---|
| Age Structure | - |
| Currency: | British pound (GBP); there is also a Manx pound |
| GPD | purchasing power parity - $ 1.4 billion ( 1999 est.) real growth rate: 13.5% (1999 est.) per capita: |
| Internet: | see next page: 3.1 |
| Telephones | see next page: 3.2 |
From November 8th, 2001, each and every adult on the Isle of Man received personalised e-habitant Activation Codes. From that day, the codes will be used to activate each recipient's e-habitant account via the Internet. E-habitant is the first venture of its kind to bring the entire Isle of Man community together electronically. For Isle of Man businesses, e-habitant opens new gateways for promoting and selling their products and services. And it allows domestic users of the system to manage many of their normal day-to-day affairs over the Internet, including purchasing goods with optimum security
The e-habitant system is fast, simple and secure and offers users access to secure services such as banking and shopping without the need to remember numerous user IDs and passwords. For e-habitants, paying bills, placing bets, and making travel arrangements have never been easier. A secure, digitally signed e-mail service allows users to communicate safely with other ehabitants, as well as with standard e-mail users. The issuing of a digital signature to all adults in the community represents a significant step in building the necessary electronic business infrastructure for a community. By combining lifestyle services, digital signatures and a secure infrastructure, e-habitant on the Isle of Man has achieved a unique and viable solution to the major problems that have hampered similar e-business and e-government projects.
On November1st, 2000, the Isle of Man Government enacted the ETA 2000, which legalised electronic transactions for business. The key part of this legislation is the ability to attribute the same legal status to electronic documents as their paper-based counterparts, when appropriate measures such as secure digital signatures are used. The e-habitant system provides a unique feature allowing users to digitally sign documents, an essential requisite for online financial dealings. E-habitant will be free to all domestic users on the Island.
Many blue-chip organisations and retail operations on the Isle of Man have already entered into a partnership with e-habitant and include the Department of Trade & Industry, the Isle of Man Post Office, Littlewoods Leisure, Ernst & Young, and AMD. Local companies such as Dickinson, Cruickshank & Co, Miracles, Manx Airlines, IOM Steam Packet Company, Black Grace Cowley, Bridson & Horrox and Stuart Smalley have also become e-habitant partners.
From November8, 2001, the business level security and capability enjoyed by these organisations will be available to every household on the Isle of Man through the e-habitant system.
Manx Telecom announced, December 5th, 2001, that it has switched on its Third Generation (3G) network. This is the first 3G network in Europe to go live. Manx Telecom is now developing a range of mobile data applications over its Isle of Man network using 3G handsets and other devices. Manx Telecom has been partnered in its 3G project by its parent company, mmO2, and by NEC and Siemens. Manx Telecom's proven track record in launching leading edge technology products such as ADSL was vital in establishing and leading 4. the 3G project. The rollout of 3G on the Isle of Man will be watched closely by other operators throughout Europe as they prepare for the introduction of their own 3G services. The experience of customers on the Island, and the applications they most use and enjoy will influence future 3G services in other countries.In addition to voice calls over the network, 3G also offers video telephony and high speed access to the Internet over a mobile device. Shopping on the move or downloading a video clip of your favourite football team's winning goal are just two of the possibilities this will bring about.
On May 21st, 2001, the Treasury announced the details of the changes that it will be making to the way in which it will be collecting the taxes on general betting and also how it is planning to tax international bets and gaming via the Internet. For all betting duties, with the exception of the National Lottery, it is intended that the tax base used will change to a percentage of gross yield. The gross yield being the total amount of all bets or stakes made and the price of the chances sold, less the value of all the winnings and prizes due. This is a similar calculation to that recently announced by the UK Chancellor during his Budget speech.
To start this process Treasury intends to introduce two statutory orders, the first preparing for licences to be granted under the Online Gambling Regulation Act 2001 which makes provision for a duty of excise called online gambling duty. The new duty is to be based on the gross gaming yield.
The order will set out importantly, the rate of duty in addition to rules and procedures regarding payment of the duty. In respect of on line gaming, as opposed to other forms of on line betting, there will be a single rate of duty to be set at 2 1/2 %. This rate will apply to all such business irrespective of where the person playing the game is based.
The second order to be brought forward by the Treasury will affect a change to general betting duty and is an intermediate measure whilst it further considers the changes announced in the recent United Kingdom budget. The order will reduce the current rate of duty, which is based on the percentage of the actual wager or winnings, from 6% to 2%. This new rate is roughly the equivalent to a 10% rate based on gross yield. For international bets the rate will remain at 0.3% of the amount staked. When it becomes clear how the UK are adapting their law and the impact that that may have on the Island, then the Treasury will make any necessary further orders. These rates apply to online, telephone and traditional bookmaking types of activity.
The Treasury Minister the Hon Richard Corkill MHK said of the changes: "By taking appropriate and prompt action now, we have removed the uncertainty attached to the future of Island based businesses operating gaming on the internet. We have also on behalf of the betting industry maintained a competitive environment for all bookmakers licensed and situated in the Isle of Man. We note that the United Kingdom has indicated its intention to reduce its betting duty rates by more than half by the end of the year (2001, TEGF). In the Isle of Man the Treasury has considered its position and decided that there is no reason for Island residents to wait any longer."
Taxation at a glance:
Double taxation relief is granted on any income arising or accruing from sources outside the Isle of Man, which has been subjected to tax in its country of origin. Where the rate of Manx income tax at which the taxed income is brought into charge in the Manx assessment is less than the rate applied by the country of origin, the double tax relief given equates to the Manx income tax charged. Therefore no further Manx income tax is payable on the taxed income.
The Isle of Man is taking a lead in allowing other forms of well regulated gambling to be offered over the Internet through the introduction of an Online Gambling Regulation Bill which was approved by the Council of Ministers on Thursday 14th December, 2000, for introduction into the House of Keys.The Online Gambling Regulation Bill will permit gambling on the Internet and similar forms of online and interactive gaming to be regulated. Tight regulation is the key to success both for companies providing services and for the Island itself.
The Bill provides a secure regulatory regime, involving the Gambling Control Commission (previously named Gaming), 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 number of licences will initially be restricted to three to avoid overburdening the new regulatory system whilst it finds its feet. However, the Council of Ministers is provided with the power to increase the number of licences if this is deemed necessary and beneficial to the Island.
Companies will have to be registered in the Island, their designated officials will have to be resident here, and licence holders must maintain sufficient financial reserves. Regulation will protect players' privacy, prohibit sales to minors and prevent money laundering. There are also other playerprotections within the Bill, such as contracts being enforceable in law, codes on advertising and accuracy of web-site claims and regulations governing the conduct, fairness, and probity of gambling on the site. The regulator will also have rights of entry and powers to inspect software and all gaming transactions.
A secure regulatory environment is likely to attract major companies. The Bill provides an important opportunity for the Island to benefit from a growing e-commerce market, but the Island's reputation for probity has to be protected. Regulation has therefore been given a very high priority within in the Bill.
The 'Online Gambling Regulation Act 2001' was Approved by Tynwald and came into operation July 1st, 2001.
Allocation Licensed Operators
On September 20th, 2001, Hon Allan Bell, Minister for Home Affairs of the Isle of Man, announced the allocation of the Island's first three international Internet gambling licences. The combination of a competitive tax regime and a strict regulatory environment has attracted a rush of applications from large casino and gaming operators round the world searching for a safe, well regulated base for their proposed online casinos. Mr Bell revealed that the three licence winners were:
Sportech plc is the holding company for Littlewoods Leisure, the UK gaming company, which is acquired in a reverse takeover completed in September 2000. Sportech is developing the Littlewoods gaming and leisure business, utilising new channels of distribution to bring more games to more players, capitalising on the strength of the Littlewoods brand, namely its association with the values of trust and integrity.
Founded in 1923, Littlewoods Leisure is one of thethe UK's oldest established gaming companies.Today the company provides a unique portfolio of betting and gaming products, including football pools, sports betting and lotteries, to a regular playing customer base of 1.6 million households.
Colin McGill, Managing Director, Sportech plc, said: "This is very good news for Sportech and another major step forward in our E-gaming strategy.The Isle of Man jurisdiction has an unrivalled global reputation for probity and security, meaning that we can offer our customers the levels of assurance they have come to expect from the Littlewoods name. The stringent checks carried out by the Isle of Man authorities represent the strongest possible endorsement of our Company's online offering. Littlewoodscasino.com will provide existing and new customers with further opportunities to enjoy the Littlewoods gaming experience."
Terry Lanni made clear that MGM MIRAGE intended to move forward deliberately, but cautiously and went on to say: "we look forward to working closely with the Isle of Man Government and domestic regulatory authorities to develop a safe, secure and enjoyable internet gaming system which provides satisfactory assurances that internet wagers are only accepted from jurisdictions in which such activity is legal, that underage gaming is prevented, and that access to problem gamblers is limited."
Sun International Hotels Limited (NYSE: SIH) is a leading developer and operator of premier casinos, resorts and luxury hotels. The company's flagship destination is Atlantis, a 2,317-room, ocean-themed resort located on Paradise Island, The Bahamas. Atlantis is a unique destination casino resort featuring three interconnected hotel towers built around a 7-acre lagoon and a 34-acre marine environment that includes the world's largest open-air aquarium. Sun International Hotels Limited also developed and receives certain revenue from the Mohegan Sun casino in Uncasville, Connecticut.The Native American-themed Mohegan Sun is one of the premier casino gaming properties in the Northeastern United States and one of the most profitable casinos in the United States.In the luxury resort hotel business, the company operates eight beach resorts in Mauritius, Dubai, the Maldives and The Bahamas.
Tobin Prior, CEO, SunOnline Limited said: "This is a great opportunity to extend our powerful brands and gaming expertise into the online gaming world. We have set out to achieve a meaningful position in legitimate online gambling and the licences issued in the Isle of Man today and the regulatory environment which will prevail now make this a practical possibility."
All three successfully surmounted strict compliance procedures including police, treasury and data protection checks on individuals as well as their companies. In addition, the Island's Gambling Control Commission must approve both the games and the underpinning software. Tough money laundering rules including "know your customer" practices will be enforced, to parallel the Isle of Man's strict and much praised financial regulations.
Once the gaming begins, an official statistician will check that the odds match the outcome. Online customers will have the additional protection of a £2 million bond set aside by each company to guarantee the payouts to winners.
Nine more licenses to be issued As well as these first three licences, Tynwald, the Isle of Man Parliament, approved a further nine licences for issue when suitable applicants are identified. The request for additional licences is partly due to the quality of some of the other applicants and the interest expressed by other large companies in obtaining licences.
Mr Bell said: "The world wide web has opened up global opportunities undreamt of a few years ago. It abolishes borders, creates global distribution channels and means that a jurisdiction like the Isle of Man, with a population of 75,000 can be the centre of a world business. We intend to be a central player in what is likely to be a fast-growing global gaming business, based on the internet. The quality of partners we have selected makes this ambitious goal entirely attainable. But great opportunity also brings great responsibility. The Isle of Man has won five major awards in a year as the world's foremost international finance centre because we are careful to combine a fair and competitive tax regime with very tough regulations. We have extended this winning combination into the brave new world of international online gaming to give encouragement to businesses and confidence to customers and to our international regulatory partners."
The entire text of the IOM Online Gambling REgulation Bill is available from http:// www.ey.com/global/gcr.nsf/Isle_of_Man/ E-ComIsland_GamblingAct