Isle of Man’s GSC Advances with Major Regulatory Overhaul Following Industry Consultation

The Isle of Man Gambling Supervision Commission (GSC) has confirmed it will move forward with its proposed Gambling Supervision Commission Bill after concluding a public consultation process, marking one of the most extensive updates to the island’s gambling regulatory framework in years.

The draft legislation aims to modernize oversight across seven separate gambling acts, introducing standardized mechanisms for inspection, investigation, and enforcement. The consultation, launched earlier this year, attracted 15 submissions from a range of stakeholders, including licensed operators, service providers, and legal experts. Overall, respondents expressed strong support for the GSC’s initiative to harmonize its powers and bring regulation in line with the Isle of Man’s evolving risk profile.

Concerns, however, centered on “the scope and proportionality of certain investigatory powers” and the balance between regulatory rigor and maintaining commercial competitiveness.

Among the most significant reforms is the introduction of a standardized inspection and investigation schedule across all major gambling legislation, including the Online Gambling Regulation Act 2001 (OGRA), the Gambling Supervision Act 2010, and the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Act 2018. While the majority of participants supported this alignment, 13 out of 15 respondents questioned “the breadth of the GSC’s proposed powers,” particularly in relation to their potential applicability to unlicensed software suppliers, former employees, or businesses with no direct connection to Isle of Man operations.

In response, the GSC clarified that “these powers are purely investigatory and do not impose ongoing obligations on unlicensed entities.” The Commission explained that the provisions are designed to facilitate information gathering relevant to licensed or suspected unlicensed gambling activity. The GSC further emphasized that “several safeguards” are in place, including proportionality requirements, judicial oversight for compulsory disclosure, and adherence to data protection and legal privilege principles.

Additional feedback addressed the regulator’s authority to enter private dwellings and investigate former license holders. The GSC assured that such measures “would only be used where there is reasonable suspicion of unlicensed gambling” and would be subject to “24-hour notice and occupant consent,” except in circumstances requiring a search warrant.

Several submissions also discussed the proposed definitions of “associate,” “controller,” “beneficial owner,” and “senior manager.” Some respondents expressed concern that the “associate” definition was overly broad, potentially extending to family members and informal connections. The GSC defended the inclusion, stating that it is “necessary to identify hidden influence or control over licensees,” but pledged to apply “a risk-based approach” and seek such information only when “material to an application or investigation.”

Views on ownership thresholds varied, with some advocating for definitions of “control” based on holdings of between 5 percent and 25 percent. The GSC decided to maintain its existing approach: 5 percent for private companies and 20 percent for publicly traded ones.

It also noted that it retains “flexibility to adjust these levels via secondary legislation if needed.”

Proposed amendments to the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Act 2018 generated nine responses, most focusing on the new power to impose civil penalties on key persons and senior managers. Industry reactions were mixed—while some welcomed greater personal accountability, others warned the move “could deter individuals from taking compliance roles already in short supply.” The GSC acknowledged these concerns, affirming that it would adopt “a proportionate application,” and clarified that penalties would only be issued “following formal investigation,” with individuals exempt if they could demonstrate “reasonable steps were taken to prevent breaches.”

The regulator also confirmed that deputy money laundering reporting officers (DMLROs) will now be included in the “key person” definition, aligning with existing AML/CFT codes.

The consultation further examined proposed amendments to the Gambling Supervision Act 2010, notably the removal of section 5(3)(h), which previously required the GSC to consider “the desirability of facilitating industry development and global competitiveness.” Some participants argued that this deletion could make regulation more risk-averse and “hinder the island’s ability to attract new business.” The GSC responded that industry promotion “falls under the Department for Enterprise’s remit,” while its own statutory role remains to act as “an independent regulator safeguarding integrity and reputation.”

Another point of discussion was the addition of a new objective requiring the GSC to “implement and apply recognized international standards.” Some respondents voiced concerns that this could result in “over-reliance on global norms that may not fit local conditions.” The GSC assured that it would interpret and apply such standards “proportionately and contextually,” ensuring their suitability to the island’s specific business environment.

Eight submissions focused on proposed amendments to the Online Gambling Regulation Act 2001, which include new fitness and propriety guidance, a license surrender process, and greater control over management and ownership changes. The move toward a consistent “fit and proper” standard received widespread support, with the GSC confirming it will issue “public guidance to clarify expectations.” The new license surrender provisions—intended to prevent operators from leaving the market to avoid regulatory scrutiny—will include “procedural transparency to avoid unnecessary delays for compliant firms.”

Some stakeholders also raised concerns over the GSC’s expanded authority to issue directions requiring operators to “remove or replace certain directors, controllers, or owners.” The Commission reiterated that this power “would only occur where there are reasonable grounds to question integrity or propriety” and pledged to provide “detailed guidance to ensure predictability.”

Few comments were received on amendments to the Gaming, Betting and Lotteries Act 1988, the Casino Act 1986, and the Gaming (Amendment) Act 1984. Respondents generally supported updates to cross-references and the addition of new direction powers, which the GSC described as “alternative regulatory tools short of enforcement action.”

After reviewing all submissions, the GSC confirmed that it will proceed with the draft legislation as proposed, with the Bill expected to be presented to Tynwald in October and potentially enacted in 2026. The Commission thanked participants for their engagement and reaffirmed its commitment to continued dialogue, encouraging licensees and other stakeholders to “attend upcoming drop-in sessions for further discussion.”

The GSC underscored that the comprehensive reforms are designed to ensure the Isle of Man’s gambling sector remains “robust, compliant, and globally credible,” while upholding the island’s longstanding reputation for “integrity and innovation in gaming regulation.” 

By fLEXI tEAM