On 10th October 2024, the Gambling Supervision Committee (GSC) provided testimony to the Economic Policy Review Committee. They outlined the actions required to prepare for MONEYVAL, detailed their organisational structure and operations, and discussed their approach to special licensing, harm reduction, and staff recruitment and retention.

Below are the key findings from their evidence session:

Preparation for MONEYVAL

• The GSC highlighted that since the previous hearing in January 2022, their primary challenge has been preparing for the MONEYVAL evaluation in 2026. This follows a study commissioned by the Government to assess the Isle of Man’s readiness, which identified several areas needing improvement. A key finding was that the Isle of Man’s enforcement approach was “out of alignment” with international best practices, with a particular need for a dedicated AML/CFT compliance division. 
• A significant part of this preparation has been conducting the National Risk Assessment, which has “dominated” their current workload. 
• While the GSC typically covers its costs and returns a “small surplus” to the Government each year, the establishment of the AML/CFT division has “significantly” reduced this margin. The GSC also noted that changes in enforcement practices could affect incoming and existing business, potentially leading to a further decrease net revenue if fewer businesses choose to operate on the Isle of Man.

Organisational Structure and Operations

• The GSC currently has one approved application for a Medical Cannabis Licence.
• The GSC currently oversees nearly 100 licences but has the capacity to manage up to 140. The Treasury sets annual licensing targets, which the GSC have informed are high. The number of licences granted annually is generally stable.
• The GSC have a standard licence fee of £36,750 per year, plus a £5,250 application fee. The GSC uses a “fixed fee” scheme, meaning the fee does not vary based on the time taken to process the application, unlike in other jurisdictions that charge according to the amount of time taken to process applications.

Special Licensing

• The GSC currently has one approved application for a Medical Cannabis Licence. 
• Medical Cannabis Licences are only issued when operators are ready to begin production, to avoid burdening them with fees prematurely. Currently, the GSC is in discussion with two operators seeking licences, and one licence has been issued for transport and storage.
• The GSC will be contributing to the Department for Enterprise’s eGaming strategy, and they indicated that this may lead to either the creation of new licence types or changes in policy to existing licence types.

Enforcement and Compliance

• The GSC noted that, previously, operators lacking the resources for compliance would have their licences suspended and be expelled from the sector. However, the GSC are now in a position to adopt a “proportionate response” to non-compliance, using various measures to bring operators back into compliance. 

Harm Reduction

• The GSC acknowledged being “less efficient” in harm reduction than in regulatory enforcement. Mark Rutherford, currently the Deputy Chief Executive and soon to be Chief Executive, plans to focus on this area going forward. 
• The GSC previously operated a system allowing at-risk gamblers to self-exclude by sharing their details with the GSC, who would then inform operators to deny services to those individuals. This system was discontinued due to GDPR rules, but the GSC noted that similar systems exist in the UK despite identical GDPR rules. They plan to consult with UK regulators on how to reinstate this approach.
• The Safer Gambling Coalition, which had been conceived with the aim ‘to amalgamate all of the data from all of those members of the Gambling Coalition and hand that over to an academic […] for analysis’ to inform regulatory and clinical practice, has not achieved this. The GSC cited a number of reasons for this, among which was gambling not being a priority for Public Health (in contrast to, for example, smoking and obesity). The GSC commented that international efforts to collate data may be more productive.

Recruitment and Retention

• The GSC described recruitment as an “incredible challenge” due to the high demand for AML/CFT staff. However, they are now fully staffed with 53 employees, including a newly recruited data scientist to help analyse data from licensees. 
• Historically, staff retention has been difficult, with trained inspectors often being poached by the private sector. The GSC noted that it takes about three years to train an inspector, and the time investment is significant. They currently have a large number of staff in training and would ideally collaborate with UCM to teach some of the required skills if resources allowed.
• To address retention issues, the GSC improved its workplace culture following two negative reports submitted through the Public Sector Integrity Line. They commissioned a comprehensive review by the Office of Human Resources, during which staff provided anonymous feedback. The results informed changes in workplace communications and other improvements.

For more information contact:

Clerk to the Committee
Legislative Buildings
Finch Road, Douglas
IM1 3PW
Tel: 01624 685500
Email: committees@tynwald.org.im