By
Mayowa Adebajo
March 12th, 2024
The US regulations of gambling will be implemented on the Internet via the blockchain technology.
The Unlawful Internet Gambling Enforcement Act, published in 2006, puts bounds to the American gambling market, which gains were estimated at more than $5.6 billion at a time. However, the taken step turned out to be insufficient, since the offshore gaming is still in place. Prospering as cryptocurrency based real cash wagering.
Offshore companies provide American players with the opportunity to gamble in the so called “social casino” via social networks, thereby causing the tax leakage.
The Act has already been extremely beneficial for the offshore gaming growth with $5.6 billion vanishing from the country annually. In terms of igaming software development it resulted in the slowdown of the US IT sector and gave Europe the possibility to build up its own capacity with the impressive annual $17 billion revenue during the period from 2005 to 2015.
Switzerland, where casino tax could be over 90% of its profit is a good example of how online gambling can be used in the interests of the state. Absence of gambling ban in the USA and tax revenue in the amount of $20 billion annually could mean job security for quite a number of American employees. This sum would be also enough to build 4 top-of-the-line airports serving around 30 million passengers every year each .
Over the last decade numerous efforts to undermine the imposed prohibitions have been made. However, the legal gambling activity has not undergone sufficient changes, bringing into the spotlight March Madness events raising around $10.4 billion in bets in the year 2017 only.
How is it possible to properly implement such regulations on the Internet ? Has the chance to legalize online betting really appeared on the horizon? The blockchain technology may become the good solution for both sports and pool betting, especially given Bitcoin’s potential to become the future of online gambling.
Dealing with smart contracts as an integral part of this system, bookmaker undertakes the commitments under which all payments are guaranteed by an American banking institution and checked on the way by the IRS. Players’ deposits are to be perceived as online exchange operations not differing much from a usual currency conversion. As far as bets are concerned, winning process is a safe and transparent payout with no delay .
Smart contracts are effectively secured with the hash at the moment they are signed. All obligations are implemented immediately after the bets settlement, while payouts are processed by banks or a corresponding state agency.
That gives no way for fraud. Providing guarantees and fair conditions, IRS keeps all players’ bets under control from the moment they are actually made and smart contracts come into force, turning a bookmaker into a service providing entity.
Malta-licensed iGaming company, Stakers Sportwetten (wich does not operate on the territory of the US) has become the first in the industry to offer smart contracts to its players. Given rising significance of mobile communications (data suggest that app 49% of e-commerce operations were made with a smartphone in 2016), a month ago the company went so far as to introduce new web app for its mobile version of the site. The app pushes through the updates of betting odds and sport data disregarding of the possible unstable network connection. Accessible on-the-spot with no lag time, this web application is in-built and, consequently, demands no download.