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Read Full BioThe Isle of Man has released its first-ever National Risk Appetite Statement (NRAS), targeting the growing eGaming sector as it seeks to establish its position as a leading, well-regulated international financial hub.
The NRAS declared that it needed to outline more precise boundaries of the acceptable risk levels in response to the financial crime threats that eGaming poses, particularly those originating from East and Southeast Asia.
The directive, which was published last week, marks a critical step in the island’s ongoing Financial Crime Strategy 2024–2026.
The purpose is to enable authorities to strengthen their legal powers in high-exposure sectors, such as eGaming, while still balancing the island’s need for economic competitiveness.
Isle of Man Exercises Regional Caution to a Raised Global Risk Level
“The purpose of this Statement is to give clarity on the national risk appetite within the eGaming sector as well as any other business sectors that may have activity linked to eGaming,” the document states.
Given that the eGaming industry contributes approximately 16% of the island’s GDP and employs over 1,000 people, the sector is vital to the self-governing territory. However, it is not immune to international criminal exploitation.
In particular, the Isle of Man authorities have expressed concerns about foreign organized crime units, often linked to online gambling operations originating in East and Southeast Asia, but have also seen a strategic opportunity with the regulatory shifts in the region.
Concern was recently reinforced by recent reports issued by the UN Office on Drugs and Crime (UNODC), which showed the evolving threat has already been identified in several other jurisdictions worldwide.
“In respect of existing business, this Statement is considered to be a trigger event,” the document warns, insisting local firms reassess customer risk and take mitigating action if necessary.
In addition to this, regarding new applications, the regulators also expressed an “extremely limited appetite” for issuing new licenses if multiple high-risk factors are present.
A New Degree of Scrutiny Among Asian Connections
In the regulator’s document release, it stated that a major red flag would be businesses owned or under the control of those rooted in East or Southeast Asia.
This is primarily due to it increasingly becoming a region linked to scam centers, unlawful banking practices, and the continued infiltration of criminal elements within their legitimate financial systems.
As a result, the Isle of Man now requires more advanced due diligence to be done, particularly for software suppliers and other business-to-business (B2B) relationships.
The island’s Gambling Supervision Commission (GSC), which oversees the awarding of eGaming licenses, has announced that it has enhanced its internal criteria by collaborating with intelligence agencies, which in turn monitor and update its risk criteria.
However, while the NRAS indicated high-risk applications will still be accepted, eGaming firms must now prove they have the mitigation systems in place or risk being rejected.
The first NRAS of its kind is part of a broader commitment by the Isle of Man to comply with global anti-money laundering (AML) standards. As outlined in its Financial Crime Strategy, regulators intend to create a “hostile environment to criminals,” which will be followed by a wider-ranging National Risk Appetite Statement later this year.
