THE Manx government’s gamble on egaming is paying off – with an ever growing number of new jobs and spiralling tax receipts generated largely by those companies that have already made a real home here.
That’s the conclusion of the latest survey by the Manx e-Gaming Association which shows prospects for new business in the sector remain positive with increasing numbers wanting to secure an Isle of Man licence or start up a non-licensable operation in the island.
The latest survey, conducted in January this year, shows employment in the sector, which grew from just 230 in 2006 to 775 last year, is predicted to increase again to 854 over 2013.
Excluding any multiplier effects, direct expenditure on the Isle of Man by the sector in 2012 was £175 million.
This figure is estimated to rise to almost £200 million during 2013, contributing some £18 million in taxation to the Manx Treasury coffers.
Wages vary considerably in the sector, but the average is above that of other sectors rising by 7 per cent over the year while remuneration of those at the top is high, reflecting their experience and value-added to their employers.
John Webster, of the Manx e-Gaming Association, said: ‘There can be no room for complacency as e-Gaming is relatively footloose and business can easily be lost.
‘However, the future for egaming on the Isle of Man continues to look encouraging, with a good pipeline of new inquiries from companies in both licensable and non-licensable activities and the clear commitment from established entities being demonstrated by their restructuring plans.’
In order to ensure consistent and accurate results, the survey comprises responses from companies that have been involved with MeGA surveys from inception in 2006, supplemented by intelligence from members and contacts within the industry plus additional research that considers new entrants and introducers of e-gaming business to the island.
While the news is generally positive, there are many challenges facing the sector, such as uncertainties regarding regulations and access to markets.
Reports from the recent ICE trade exhibition suggest that the quality of leads generated is of a higher quality than in the past and the Isle of Man has established an international reputation for high ethical standards, effective regulation and an environment that is commercially attractive.
However, while there will be some increase in income and employment, directly from the new e-Gaming entities and indirectly from CSPs and other suppliers of business services, the major contributions tend to be restricted to those large companies that make a real home in the island by locating key senior staff and actual operating facilities here.
Such companies with a significant real presence add most to the local economy while at the same time are less prone to criticism that they are located here solely for tax reasons.
Strategic decisions by several companies committed to the Isle of Man have meant that between 2012 and 2013 there will be a significant boost to employment in e-Gaming.
Overall, business prospects are good for competent, well-funded egaming companies, but the industry is maturing and there is increased technical sophistication with the recent rapid growth of mobile and other platforms – while varying regulations imposed by different jurisdictions continue to pose challenges for small and start-up operations.
Actual trading in the island’s domestic market has been tough, with government spending being reduced and focussed on low prices so there have been a number of redundancies in the local IT market. This emphasises the importance of the new money and jobs that are generated by companies attracted to the Isle of Man but who trade elsewhere.
The significant increase in employment by companies that have established their headquarters here and whose investment and commitment illustrates that the most productive and easiest method of marketing is to concentrate on those that are already in the island.
While the returns from the MeGA survey are seen by only one individual and are then aggregated to preserve business confidentiality, the reason for the significant increase in income and expenditure shown in the results of the 2013 survey is clear - it is the result of organic growth of those companies with an existing sizeable presence on the Isle of Man, coupled with the attraction by them of associated operations and activities.
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Sunday 19 May 2013
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