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Isle of Man Grants License to Ethereum-Based Lottery

The Isle of Man has approved a gaming license for a blockchain lottery.

The ethereum-powered lottery was developed by Quanta, which describes the drawing as fully transparent and fair, with provably random results. Smart contracts manage the process from end to end, the company said.

Obtaining a license from a national government was part of Quanta’s business development strategy, it said. The first step in its ticketing process verifies that the purchaser meets know-your-customer requirements.

The Isle of Man’s Gambling Supervision Commission has been “an incredibly supportive regulator, committed to understanding our unique technology” said Lee Hills, chief operating officer of Quanta, in a press release.

At the same time, he said:

“[The commission is] maintaining absolute dedication to the principles of ensuring the Island’s gambling industry remains crime free, protects the young and vulnerable, and ensures our services are fair and that players receive their true winnings.”

The lottery is available independently or as a white label product. Quanta does not appear to be operating an open lottery yet. The company was not immediately available for further comment.

“We are delighted to welcome a new company to one of the Island’s fastest growing sectors,” Daphne Cain, a member of the island’s Department of Economic Development, said in the release. “The Isle of Man’s regulations and compliance procedures are specifically designed to accelerate cryptocurrency and e-Gaming industry growth on the Island.”

Correction: A previous version of this article incorrectly provided the name of the company as Qanta. This has now been corrected.

Lottery balls photo from Shutterstock.

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

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National Economics, Gambling and Cryptocurrency: A Perfect Storm?

Noelle Acheson is a 10-year veteran of company analysis, corporate finance and fund management, and a member of CoinDesk’s product team.

The following article originally appeared in CoinDesk Weekly, a custom-curated newsletter delivered every Sunday, exclusively to our subscribers.


The gambling world is no stranger to disruption. Just as online platforms are pushing aside evocative, casino-based settings, they themselves are starting to face big change.

The threat – or the opportunity – comes from two trends, one cultural and one technological.

On the cultural side, we have the explosive growth of eSports, which now spans a range of online venues, genres and demographics. Analysts insist that the recent surge is a small foretaste of what is to come. There is even talk of them becoming a medal event at the Olympic Games.

From technology, we have blockchain. While gambling with cryptocurrencies has been around since the early days of bitcoin (and is expected to grow strongly as customers get more comfortable with the concept), an interesting twist appears to be emerging from platform tokens.

Combine these trends with national legislation and economic strategy, and you begin to see a fundamental shift that has the potential to transform a massive segment of the leisure economy.

And in the process, it could also give a big boost to the development of distributed ledgers and digital tokens.

Rolling the dice

As an example, this past week U.S.-based eSports betting platform Unikrn got an online gambling license from Malta. This enables it to offer real-money betting to most of Europe, and token-based betting to the rest.

What makes this noteworthy is the platform’s new crypto token. A couple of years ago, the company created a platform-only digital token to enable users to place bets on the outcomes of games such as League of Legends. The new version, however, will run on the ethereum blockchain.

This means that it can be traded between players, sold on an exchange and converted to fiat money in many jurisdictions. It also points to the emergence of a community of developers that in theory could extend its utility by creating additional apps and add-ons.

A more intriguing aspect, though, is the strategy of the Maltese government, and where this could lead.

To help offset the decline in manufacturing, the Maltese government over the past few years has focused on attracting technology businesses to the island, offering relatively lenient legislation, low tax rates and lots of sunshine. The efforts have largely centered on the gaming industry, given its potential to foster related sectors such as finance and film.

Malta was the first state in the EU to regulate online gaming platforms, back in 2001. Since then, the industry has grown to be one of the world’s largest, accounting for over 10 percent of its domestic GDP.

By incorporating the potential for eSports gambling and cryptocurrency tokens into the mix, the island is not only signaling a future-first approach to gaming legislation. It also appears to be setting the stage for a broader development of blockchain technology.

All in?

To see an example of this strategy in practice, we only need to hop over to the Isle of Man.

Like Malta, it was an early legislator of online betting (which grew to account for almost 20 percent of GDP). This, combined with fast internet and a zero percent corporate tax rate, encouraged an influx of technology businesses, which in turn helped to foster a strong cryptocurrency ecosystem. Official support for blockchain technology was not far behind.

In 2015, the Isle of Man was the first government in the world to trial a blockchain platform – fittingly, for registering digital currency companies. It was also one of the first to regulate bitcoin businesses. Last year, it became the first jurisdiction to officially recognize bitcoin gambling, and just last month it announced its intention to foster a friendly framework for token sales.

Malta appears to be following in the Isle of Man’s footsteps.

It recently announced its intention to legalize bitcoin gambling, and last month unveiled a blockchain advisory board to steward its national strategy around the adoption of the technology. It also is contemplating testing the impact of cryptocurrencies on the national economy, and last week revealed a trial for putting academic credentials on the blockchain.

However, the potential impact of Malta’s moves is much greater than that of its larger counterpart.

Malta is part of the EU, while the Isle of Man (a self-governing dependency under the British crown) is not. Any licensed business domiciled in Malta can offer its services in other EU countries, without needing a domicile in each one.

While this is interesting for eSports betting sites such as Unikrn, it could be especially compelling for other cryptocurrency startups. Malta has not yet made an official announcement on digital token sales, but it is likely to be only a matter of time.

And its support for blockchain experimentation – both in the private and public sector – points to the development of a forward-thinking ecosystem that in turn will breed further innovation and growth.

Who said that big change needs to come from big players?

Online gambling image via Shutterstock

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ICOs Welcome: Isle of Man to Unveil Friendly Framework for Token Sales

The Isle of Man is opening its doors to entrepreneurs looking to launch initial coin offerings (ICO).

In an interview today, Brian Donegan, head of operations for fintech and digital development at the Isle of Man’s Department of Economic Development, told CoinDesk that the British Crown dependency has created a regulatory framework it believes will allow for token sales that are compliant with anti-money laundering and know-your-customer regulations.

The Isle of Man’s government has yet to formally announce the development, though it’s been moving in this direction for some time. The framework itself is based on anti-money laundering rules put in place in 2014 and 2015, Donegan said.

While regulators in places like Canada have offered some on-ramps for ICO organizers, the Isle of Man’s move perhaps goes one step further in opening the door to a range of token sales. Adel, a fintech incubator that launched an ICO after incorporating on the island, effectively served as a test-bed for the concept.

As for why the dependency is moving to capitalize on the interest in ICOs today, Donegan’s explanation was simple: there’s a significant opportunity for governments that are early movers in creating accommodative environments for ICO organizers.

Donegan said:

“Our understanding and analysis of the ICO market is that it represents a massive vertical market for us.”

Businesses looking to launch an ICO in the Isle of Man would be required to register with the relevant authorities within the dependency and follow the applicable regulations. That said, officials would play a supportive role for businesses as they move through the token sale process.

The move comes several years after the Isle of Man introduced legislation outlining rules for businesses that handle or exchange cryptocurrencies. The Isle of Man first revealed its plans to put rules in place for cryptocurrency businesses in 2014.

The government there later embraced the tech behind bitcoin for possible public-sector applications, launching a digital registry pilot in May 2015 that was later followed by work in other areas like IoT.

China reaction

This week saw the dramatic move by regulators in China to effectively outlaw ICOs, a decision that’s had an impact on both domestic and international activity around the funding model.

When asked to comment on the move, Donegan said it highlights “a real, absolute need for AML/KYC compliance specifically tailored for ICOs” – something that he believes the Isle of Man can provide.

He went on to reveal that the Isle of Man’s government has already been seeing strong interest from token sale organizers, and that the move to develop a regulatory environment for ICOs was driven in part due to the prevalence of scams in the space.

“I have to tell you, for every 10 applications we’ve had from ICO promoters over the last several months, I’d say only one of those gets through because there’s a lot of scamming going on in the industry,” he said, concluding:

“What we’re about is keeping consumers safe and keeping crime out.”

Image Credit: Kisov Boris / Shutterstock.com

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [email protected].