Payment Magnates attended the “Creative eGaming, Binary Options & Ecommerce Solutions: Israel and Isle of Man” conference yesterday, December 11th 2013, in Tel-Aviv.
The conference was held by the Middle East office of the Isle of Man based payment processor Counting House and Tal Ron, Drihem & Co., a reputable law firm specializing in the Forex, Gaming and Binary Option industries. The conference focused on the regulatory recognition of the Binary Option activity in the Isle of Man in comparison to other countries like Malta, Japan, Turkey, the US, the UK, and of course Cyprus.
As Binary Options are a relatively new notion in the financial landscape, it was not until May 2012 when Cyprus stepped up and decided to regulate Binary Option trading. The Cyprus Securities and Exchange Commission (CySEC) first evaluated that the Binary Option did not fall under the scope of the Cyprus financial law, but finally decided to regulate it as a financial instruments. The Isle of Man however, after trying to have Binary Options regulated as a financial instrument as well, finally focused on the betting aspect of the industry and decided to regulate Binary Option firms who decide to relocate to the island as gaming firms under the Isle of Man Gambling Supervision Commission (GSC).
Israel was strategically chosen to hold this conference as many Binary Option firms and platform providers are from there or from Cyprus.
A presentation by Tal Ron and Stephanie Attias of Tal Ron, Drihem & Co. with Paul Davis, Managing Director for payment processor Counting House, demonstrated the regulatory positions of countries such as Italy (CONSOB), Malta (Malta Financial Services Authority), Germany (BaFin) and the US (US Commodity Futures Trading Commission) on the subject of Binary Option trading. The conclusion shows Binary Options are still in a “Grey Area” for many regulated jurisdictions, and are seen as either investment instruments, or fixed odd betting on the financial market.
Presentations by Peter Greenhill, the Director of e-Business Development for the Isle of Man and Paul Davis, demonstrated the financial stability and technical attributes of the island. The Isle of Man possesses a strong financial system, with a AAA rating from Moody’s, and a AA+ rating from Stanford & Poor’s. Financial incentives include a 0% corporate tax, a 20% personal tax with a £120,000 cap, and a 40% grant for relocating to the island. The Isle of Man also maintains a reliable, 100% uptime power surplus, and a state of the art dual redundant fiber-optic telecom infrastructure to reduce the likeliness of technical faults to a minimum.
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Ray Davies of e-Gaming Development for the Isle of Man presented the Online Gambling Regulations Act (OGRA) licenses. There are 3 licenses available altogether: a full license (£35,000 per year), a sub-license (£5,000/y), and a network license (£50,000/y). These prices, compared to the CySEC license which requires securing a minimum of €200,000, may definitely help convince the unregulated brokers.
The conference ended with a presentation from the Head of Middle East at Counting House, Stuart Ballan. Counting House provides payment solutions for firms located on the island and has been processing payments for over 20 years. Their expertise revolves around gaming, binary options, Forex and Lottery Messenger. In addition to supporting all Visa and MasterCard credit and debit cards, Counting House has the capability to open bank accounts for its clients in many countries around the world, for the purpose of collecting customer/player/trader deposits, and to payout to credit/debit cards, by local and wire bank transfer and by issuing cheques. Counting House offers API integration, tokenization, and hosted payment pages. Offering daily settlement and local, quality customer support, Counting House positions itself as “more than a payment processor”, as can be seen by the Isle of Man delegation they brought to Israel, this week.
The Isle of Man GSC offers an appealing Gaming alternative to other financial jurisdictions. When looking at the available regulation authorities such as Cyprus, the Isle of Man offers a number of noteworthy incentives such as pricing, banking, payment processing and infrastructure. Of course, the business needs and target markets must come into consideration. Operators who decide to work out of the Isle of Man would remain unable to access the EU market, as opposed to those who holding a CySEC license as they can passport it to any country under the MiFid rules.
Seeing the different opinions and aspects and comparing them with other countries shows Binary Options is exiting the “grey area”. Whether it is a gaming or a financial license, the market is clearly headed toward regulation and when unregulated firms are considering it, the Isle of Man Gaming regulation might just be a cost efficient yet prestigious alternative.