From the moment of signing The Unlawful Internet Gambling Enforcement Act in 2006 the iGaming industry of the US had ceased to exist whereas the potential gross gaming revenue was estimated at over $5.6 billion.
However, the adopted actions are not yielded with positive results, because the offshore gaming still operates as real cash wagering, and as so called free-to-play “social casino”, encouraging a player to make a deposit without the ability of withdrawal. This state of affairs contributes to growth of multi-million offshore companies just on Facebook and grants them to work without paying tax.
Although the Act was a requisite measure to withstand the unregulated gambling market, it also put an end to country’s profit at the amount of $5.6bn per year and, moreover, it closed the IT sector from further developing iGaming software. Such a rush decision gave Europe an opportunity to build the great gambling empire grossing at $17bn after tax with the growth rate of 328% from 2005 to 2015.
Switzerland experience proves that even with casino tax reaching 90% from their net profit, the business effectiveness still persists. For US that would mean $20 bn dollars of taxes annually and tens of thousands working places across the country. That sum could have been spent for building of 4 brand new airports every year with the capacity of 30 million passengers each. Within the last 11 years there were a few attempts to defraud the industry by launching poker sites in certain States. Nevertheless, it still remains unclear how liquidity would be moved Interstate or in offshore.
According to the Internal Revenue Code, all gambling winnings are considered as income. At the moment only pools are taken to be fair and more transparent for taxing purposes. That is why totalizers are still functioning in the US in spite of the struggling legislation process of poker sites. The total pools’ revenue during March Madness 2017 was about $10.4 billion, but these figures could raise significantly if the whole gambling industry functioned to its full potential.
But is there any way to expand the boundaries as to create reasonable and regulated gambling online? Blockchain may be the answer, guaranteeing players with the security that is particularly necessary in both sports betting and pools model.
The blockchain-based system should involve the US bank and IRS to make all the transactions visible for the government. A bookmaker liquidity is granted as a crypto-currency and a player’s deposit is treated as a standard currency conversion with no additional fees. On that basis any bet becomes secured by the bookmaker liquidity and all the winnings are paid out simultaneously with the score coming in.
The excellent part of blockchain is a smart contract, digitally signed with the computed hash between two or more parties. The main advantage of a smart contract is its non-alterability that eliminates fraud options. Thus, banks are able to confirm the transactions and IRS to control the taxing, while a bookie turns to a service company. That’s it.
Stakers, a startup from Malta, was the first company in the market offering smart contracts to its players. Residents of the US and America can not be accepted to play at Stakers.com. This Information is meant for educational purposes only.
