Publishment of National Risk Tolerance Statement by Isle of Man
The Isle of Man, a renowned licensing hub for gaming, has published its National Risk Appetite Statement (NRAS) to reinforce its iGaming framework against money laundering, terrorism financing, and other financial crimes. This move comes in response to the growing number of licensees in the Isle of Man and the associated risks.
The NRAS, a crucial step in protecting the island from fraud and exploitation, expresses a limited appetite for iGaming businesses with links to East or Southeast Asia due to heightened concerns about financial crime risks. These regions are identified as higher-risk jurisdictions, where operators must implement enhanced due diligence and risk mitigation measures to prevent exploitation for criminal purposes.
Operators connected to these regions are required to demonstrate the necessary knowledge, experience, and sophistication to control risks effectively and ensure their products and services cannot be abused. If identifiable risk factors accumulate without adequate controls, the Isle of Man regulator will refuse to authorize new business or review existing licenses, indicating intolerance for insufficient risk management linked to these jurisdictions.
The focus is on preventing criminal infiltration, financial crime, and related regulatory breaches given the Isle of Man’s reputation as a financial hub and the significant contribution of iGaming to its economy (16% of GDP). The NRAS promotes "proportionate enhanced measures" to tackle risk in higher-risk areas.
The Isle of Man Government and Gambling Supervision Commission (GSC) are investing in reinforcing the island's iGaming framework to maintain its reputation as a responsible and trusted jurisdiction. The NRAS aims to provide licensees and other industry stakeholders with a solid understanding of identified risks, vulnerabilities, and mitigations across ML/TF/PF related topics and across all sectors.
The Isle of Man is currently undertaking its third iteration of its National Risk Assessment, with more data becoming available soon. The NRAS does not repeat the Isle of Man's commitment to implementing the 40 recommendations by the Financial Action Task Force (FATF), but it is implied in the context of the overall strategy.
In conclusion, the Isle of Man is setting a more restrictive risk appetite in respect of licenses across all sectors when certain risk factors are present, particularly in the iGaming industry's ties with East and Southeast Asia. The NRAS provides clarity for industry and stakeholders on the Isle of Man's stance towards good quality, reputable business, emphasizing the need for robust risk management to ensure the island's continued success as a leading licensing hub.
[1] Isle of Man Government Press Release, "National Risk Appetite Statement for the Isle of Man published", link
[2] Gambling Supervision Commission, "National Risk Appetite Statement", link
The National Risk Appetite Statement (NRAS) emphasizes a limited appetite for online gambling businesses with links to East or Southeast Asia, due to concerns about increased financial crime risks. The Isle of Man regulatory body has set a more restrictive risk appetite, particularly in the iGaming industry's ties with these regions, to maintain its reputation as a responsible and trusted jurisdiction.
