26 August 2025: Striking A Balance

GSC Isle Of Man

Reflecting on progress

The 2025 Countering Financial Crime Conference at the Villa Marina is set to take place next week, on 3 September 2025. The conference will showcase international developments and emerging risks, while also providing an opportunity to reflect on the progress achieved on the Island over the last year.

Regulators have been working hard to identify areas of risk and share relevant intelligence through cross-agency collaboration with law enforcement, feeding into the national risk assessment and outreach to relevant sectors, setting out expectations and enhancing understanding of the Island’s unique risk factors.

In order to align with international standards that keep the sector and the jurisdiction safe from financial crime, the Gambling Supervision Commission (GSC) established a new framework for enforcement last year. A little over one year on, and the framework has been used to effect regulatory sanctions and civil penalties where remediation could not be achieved. This article provides a review of the last year of inspections and enforcement and highlights some of the key facts around the GSC’s use of inspections and sanctions.

 

A Risk-Based Approach

Ring fenced AML/CFT teams inspect GSC licence holders using a risk-based approach, which determines scope and frequency. Since April 2023, the GSC has completed 57 AML/CFT focused inspections using factors such as nature, model, size and compliance history to schedule routine inspections. During this period, 10% of inspections led to an Enforcement investigation and it is notable that a very low number of first time inspections have led to an enforcement referral, with the preferred route being remediation and education.  However, where material risk cannot be remediated, the GSC must use other tools to ensure compliance.

 

Over the last year, the GSC has conducted desk-based thematic reviews in response to emerging risk threats to the sector, outlined in UNODC reports. This review is in its final phases and has been of significant value in-

  • Informing targeted inspections or enhanced supervision where risks were identified;
  • Detecting and escalating suspicious activity to provide intelligence and information to other agencies which in turn may inform international co-operation and/or criminal investigations;
  • Refining internal risk assessments and enhanced supervisory methods;
  • Updating and sharing typologies with the sector, regulated entities that interact with the sector and informing broader international risk understanding to improve collective risk understanding;
  • Contributing to the National Risk Appetite Statement published in May 2025;
  • Feeding into the Gambling Sectoral Assessment and in turn elements of the National Risk Assessment;
  • Highlighting legislative changes needed to ensure the GSC has a robust set of tools which can be used to keep the sector free from criminal misuse; and
  • Maintaining the reputation of the licence holders and ensuring the island is known for the integrity of the businesses that operate here.

 

Remediation Led

Enforcement action is considered where appropriate and proportionate, for instance, where there is significant material risk caused by failings, continued and systematic non-compliance or where remediation is not possible. As a publicly funded statutory board, the GSC can ensure that the regulatory approach is led by broader public interest rather than industry contributions, reinforcing an independent approach.

Where the safety and integrity of the sector, our licence holders and the Island are not threatened, remediation will be the preferred approach. All licence holders subject to enforcement investigations since April 2023 were not able to engage with remediation due to the licence holder surrendering following the Inspection.

The pathway to enforcement is outlined in the Referral to the GSC Enforcement Division Policy. Effective cooperation with the remediation process minimises the risk of referral to the Enforcement Division for further investigation and potential sanction.

 

Consideration is made of any aggravating or mitigating factors; if there were significant major deficiencies, material risk, wilful noncompliance or repeated and ongoing failures to meet regulatory standards. Contraventions are classified by major or minor deficiencies and if remediation is possible, recommendations will be made where appropriate.  When deficiencies are found during the inspection and the material impact of those failings is minimal, there are various regulatory tools the GSC can employ before an enforcement referral is undertaken.

 

Co-operation and Outreach

Inspections and enforcement are both important tools to help the GSC better understand the risks facing the sector and data from our supervisory activity is used to inform risk-based supervision and stakeholders.

Inspection findings and common themes on failures are fed back to the sector through outreach, including guidance, statements, blog posts, forums, webinars and workshops.  Helping to inform the sector and enable a better understanding of compliance.

Future plans are to increase our ability to analyse data using it to better inform industry and refine our supervision, and to establish wider co-operation agreements to identify and treat risks early, which in turn lessens any negative impact on the sector.

Earlier in 2025, the GSC entered into a data sharing agreement (DSA) with the Police, which allows for greater collaboration, along with enhanced powers to share information under the newly enacted Gambling (Permitted Disclosures) Order 2025.

The GSC is also expanding and refreshing its memorandum of understanding (MOU), agreements which allows the GSC to share information with peer jurisdictions and agencies to improve the effectiveness of our AML/CFT oversight.

 

Looking forwards

The GSC remains committed to evolving to meet challenges and opportunities as they arise in the sector. Through its modern and robust regulatory practices, the GSC primarily aims to keep the Isle of man a fair and safe jurisdiction to do business.

Gathering and sharing information is essential in maintaining the reputation of the licence holders and ensuring the island is known for the integrity of the businesses that operate here. Through their enhanced regulatory tools, regulators drive forward actions by continuing to work behind the scenes to identify any activity that is contrary to regulatory objectives, to inform relevant partner agencies and to collaborate with law enforcement agencies over enforcement and criminal investigations

The public and private sectors have a shared responsibility to identify and assess risks and apply proportionate controls in order to maintain a resilient and reputable business environment. Sharing information through outreach and cooperation channels helps to maintain a strong and diverse sector on the island.

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