"In the first half of 2016, the Island is looking to introduce regulation around crowdfunding platforms" | Yogonet International
Exclusive interview with Mark Robson, Head of e-Gaming, Isle of Man’s Department of Economic Development

"In the first half of 2016, the Island is looking to introduce regulation around crowdfunding platforms"

Mark Robson talks about the prospects for the online gaming industry in Isle of Man, and shares thoughts on the emerging e-gaming markets.
2016-01-07
Isle of Man
Reading time 4:30 min
Mark Robson talks about the prospects for the online gaming industry in Isle of Man, and shares thoughts on the emerging e-gaming markets.

The gambling sector is betting on a wave of mergers and acquisitions. How does this affect the industry? Will smaller operators be able to survive these changes?

The slew of M&A activity will continue into the next year with new deals made as well as transactions finalized, for example, GVC’s much talked about merger with bwin.party.

In the short-term, smaller operators will no doubt come under pressure, but in the long-term mergers and acquisitions will make effective competition a necessity. Start-ups which have genuinely innovative offerings and well thought-out and practical financial plans will shine through and drive interest amongst investors.

In addition to M&A, it will also be interesting to see the impact of stock market listings of gaming companies on funding.

How do you see the online gaming sector evolving over the next years in Isle of Man and around the world?

The e-gaming industry is now the biggest GDP contributor on the Island representing 16.7% of the economy with £168m (USD 247M) worth of growth in just one year - a rise of 32% and we expect to see this growth continuing into 2016 with new licensees and the growth of existing businesses.

In the first half of 2016, the Island is looking to introduce regulation around crowdfunding platforms which, we hope, will be welcomed by the gaming start-up community and give another competitive proposition to the Island’s e-Business offering.

Also, to provide funding and a supportive environment to innovative and exciting start-ups, the Isle of Man Government has launched a £50 million (USD 73M) Enterprise Development Scheme, which is expected to go live in Q1 2016, which start-up gaming companies can apply for.

Worldwide, the industry will continue to adjust to the unprecedented changes in the landscape from regulatory developments to headline grabbing mega-mergers and acquisitions; from the increasing popularity of eSports to the growth of emerging gaming markets. It will be another exciting year for the industry.

A Supreme Court Appellate Division judge allowed DraftKings and FanDuel to operate in New York until January 2016. Are these games of skill or chance? What are your thoughts on the legalization of these games?

Currently, there are a lot of noises around eSports and DFS because of the US crackdown and concerns around age verification. But the growing popularity is unmissable. It appears the general consensus is that these are becoming more accepted as games of skill rather than games of chance.

We see great potential for continued growth, as well as other gaming opportunities as eSports and DFS continue to gain traction and receive legal approval. The Isle of Man has been licensing these businesses for many years and we are seeing great demand in licensing enquiries. With its gold standard in player protection, KYC and robust IT infrastructure including carrier-class data connectivity, five hosting centres and overall cost-effectiveness, the jurisdiction is well placed to make the most of this in a well-regulated environment.

Does the future of the industry lie in the use of Bitcoin? How does its use impact the industry?

Whether the future lies in the use of Bitcoin or other cryptocurrencies for carrying out transactions is hard to say, especially as tech giants such as Google and Apple are disrupting the payments industry. But we do expect more games to integrate digital currency payments in their features.

Furthermore, the Isle of Man sees great potential in blockchain, the technology behind digital currencies, in changing the way storage, processing and verification will happen in the future. With blockchain unique features which make online transactions more secure (harder to hack into) whilst maintaining privacy, we think the e-gaming industry will embrace this in the times to come.

Recognizing blockchain potential, the Isle of Man has established a supportive framework to allow well-regulated high quality blockchain businesses to establish on the Island and thrive. The Isle of Man introduced the anti-money laundering regulation for Digital Currency - the ‘Proceeds of Crime Act, schedule 4’, which recently received Royal Assent. The Island is the first jurisdiction to introduce this initiative.

On November 10, the sixth annual e-Gaming Summit was held. What feedback did you receive from attendees?

The KPMG eGaming Summit Isle of Man was a success, drawing over 200 delegates from around the world and the feedback was very positive.

The event was a combination of key note speeches and panel discussions. The attendees liked the element of live polling which was introduced for the first time; they could answer speakers’ question via software in real time and this drove up the engagement levels.

The Summit drew in key stakeholders and representatives from the industry internationally to debate and discuss on the topical issues such as cloud computing, M&A, multi-jurisdictional licensing processes and their impact on e-gaming clusters. Overall, it was a very lively, enriching and forward looking event.

What do you expect to see at ICE 2016?

ICE is no doubt the biggest fixture in the international eGaming calendar. It’s a fantastic event which brings together the biggest names in the industry as well as the smaller players.

ICE is always futuristic and this year will be no different. We expect more innovative and disruptive technologies being showcased. We hope to see more operators from the emerging markets of Asia, South America and Africa following the rise in online gaming in these continents.

The Isle of Man generates a lot from interest from the world every year, and we hope to do the same this time and secure many business leads.

What will be the key trends in 2016?

2016 will be another year of seismic change in the industry. Some of the key trends will be:

The rise of eSports

This could be one of the most key themes of 2016. Tournament organizers have reported up to 140 million views online just this year. And they get an average of 30,000 participants at each of their events, with many multiples of this number streaming events to their devices. The audience figures are clearly staggering, and players’ games evolve over time as new weapons and new maps are released along with new lands, new superpowers, and characters.

Emerging e-gaming markets

It’s fascinating to see how the Asian, African and South American markets are evolving and opening up. Asia-Pacific is reported to be both the fastest growing gaming market in the world.

With a boom in internet and mobile penetration in these continents, we expect some out-of-the-box gaming products coming from these areas. As part of our diversification strategy, the Isle of Man will channel its expertise, strong reputation, and world class technology infrastructure to make the most of the opportunities coming from these interesting markets.

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