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The establishment of The Unlawful Internet Gambling Enforcement Act in 2006 was a crucial event for the whole iGaming industry in the US. In fact, this Act prohibited the iGaming activity, which was estimated over $5.6 billion. But in spite of the current legislation, the offshore gaming is still available even on Facebook as real cash wagering, and as free-to-play “social casino”, where players can only play and make a deposit with no withdrawal implied. As a result a multi-million offshore companies started to appear and raising funds, but leveraging from the US market taxes.
Not only did the adopted Act rule out the possibility for the government to enrich the State budget with $5.6 billion per year, but it also closed IT sector from developing Sports Betting Software that could bring additional tax earnings to American Treasury. That played Europe’s cards quite right, helping to build its own iGaming empire with the annual revenue of $17bn after tax, showing the unprecedented growth rate of 328% over the decade (2005-2015).
Obviously, taxation is an integral part of any State machinery. Take, for instance, Switzerland, where the casino tax forms over 90% of its profit. It may seem unreal, but the business stays profitable even that way. For the US this could mean the potential annual revenue of taxes of about $20 billion dollars and tens of thousands working places across the whole country. That would be enough to build 4 brand new airports with the capacity of 30 million passengers each. During 11 years the state of affairs was rather changeable: there were a few attempts to launch poker sites illegally in certain States, but it still remains unclear how liquidity would be moved Interstate or in offshore.
However, with the struggling legislation process of poker sites, bets on totalizers remain legal. During March Madness 2017 people bought about 70 million brackets at the cost of $10.4 billion. Pools are fair, with guaranteed payout and are enough transparent for taxes, which is more important because all the gambling winnings are deemed as income in the US.
So is it possible to update online gambling and to make it safe and clear for all? This may be accomplished with the introduction of new cutting-edge technologies that give people an opportunity to take a fresh look at online sports betting with the help of blockchain, which is applicable for sports and pool betting model.
Bookmaker liquidity here must be verified by the US bank and IRS, and granted to a bookmaker as crypto-currency. Players deposits are to be treated as online currency conversion, the same way as the standard currency conversion works. Thereby the bet retains its security: winnings are guaranteed by the bookmaker liquidity and paid out instantly with the score coming in.
The most interesting part of blockchain-based systems is known as a smart contract. It is signed by 2 or more parties and digitally signed with the computed hash. There are no ways to defraud such system, because each step is saved and the information in the contract can not be altered or added. Smart contracts are executed as final, paid out by the bank or a Federal agency and controlled by IRS, while a bookie turns to a service company. That is how it works.
The first company introducing smart contracts was Stakers, a startup from Malta. Players from the US and America can not be registered at Stakers.com. This Information is meant for educational purposes only.
For any questions, contact us at ifoundation@stakers.com