The chief executive of Digital Isle of Man, Lyle Wraxall, has publicly acknowledged that a recent e-gaming risk assessment that effectively barred new business from parts of Asia was a significant error. Speaking at the Digital Isle conference at the Comis Hotel, Wraxall highlighted the challenges faced by the island’s e-gaming sector over the past 18 months, particularly in light of concerns about infiltration by global crime syndicates.
A National Statement on eGaming and Financial Crime, released in June 2023, indicated a “limited appetite” for granting licenses to businesses with ownership or control from East and Southeast Asia. Wraxall reflected on the repercussions of this statement, stating, “The national risk appetite statement was a huge mistake in my opinion and I think has been accepted as a huge mistake by the AML/CFT team.” He described the situation as “a pretty big cock-up,” emphasizing that feedback from the industry regarding the rushed communication of the assessment has been unequivocal.
Industry representatives expressed concern over the lack of a formal retraction or apology from the government. David Artus, senior accounts manager for Domicilium, stressed the need for reassurance from officials. “What this industry needs is some assurity from the government. It would be really helpful if you’ve made a mistake, just to ‘fess up and tell the industry that was a mistake,” he said. Wraxall agreed, acknowledging the need for better communication moving forward.
In response to the backlash, Wraxall announced plans for a comprehensive risk appetite statement that would allow for amendments to the existing wording. He stated, “Obviously, we need to make sure we don’t make the same mistakes with the future version. I admit that’s not being well-communicated.” While he clarified that Digital Isle of Man cannot apologize on behalf of other government functions, he recognized the importance of addressing the industry’s concerns.
The agency faced additional scrutiny last year following a trip to Manila, where officials sought to attract offshore gaming operators who had been banned in the Philippines due to alleged criminal ties. This discussion is particularly relevant as the Isle of Man prepares for a critical inspection by MoneyVal in less than a year.
Recent statistics reveal that 64 online gaming licenses have been surrendered or cancelled over the past 12 months, a decline from a peak of nearly 100. The conference also noted the loss of 60 jobs at Games Global/Microgaming, highlighting the ongoing challenges within the sector.
Wraxall provided an update on the island’s e-gaming strategy, noting that a strategic document drafted in April had undergone multiple reviews. He indicated that elements reflecting a sense of ambition were removed due to concerns about their potential impact on the upcoming MoneyVal assessment. The document has since been rebranded as a “statement of strategic intent,” which he believes will help them navigate the upcoming evaluation. “The document does not have much left of it, in all honesty,” Wraxall admitted, underscoring the significant adjustments made in response to regulatory pressures.
As the Isle of Man grapples with the implications of its risk assessment and prepares for further scrutiny, the future of its e-gaming sector remains uncertain.
