us based non profit casinos exempt from federal ban?
Anyways, there is a lot to this idea that makes it very important technologically speaking; and yet now I am finding out that I am encountering legal hurdles in the US that I hadn't anticipated running into when I started thinking about this startup idea. Initially I was under the impression that it couldn't be done legally on the Federal level according to US's anti gambling laws. (especially as it pertains to online gambling)
But then I actually read more into the federal legislation that actually imposes the ban and I found a really interesting exemption.
18 U.S. Code § 1955 - Prohibition of illegal gambling businesses
(a) Whoever conducts, finances, manages, supervises, directs, or owns all or part of an illegal gambling business shall be fined under this title or imprisoned not more than five years, or both.
(b) As used in this section—
(1) “illegal gambling business” means a gambling business which—
(i) is a violation of the law of a State or political subdivision in which it is conducted;
(ii) involves five or more persons who conduct, finance, manage, supervise, direct, or own all or part of such business; and
(iii) has been or remains in substantially continuous operation for a period in excess of thirty days or has a gross revenue of $2,000 in any single day.
(2) “insured credit union” shall have the meaning given the term in section 101 of the Federal Credit Union Act (12 U.S.C. 1752).
(3) “insured depository institution” shall have the meaning given the term in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).
(4) “gambling” includes but is not limited to pool-selling, bookmaking, maintaining slot machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers games, or selling chances therein.
(5) “savings promotion raffle” means a contest in which the sole consideration required for a chance of winning designated prizes is obtained by the deposit of a specified amount of money in a savings account or other savings program, where each ticket or entry has an equal chance of being drawn, such contest being subject to regulations that may from time to time be promulgated by the appropriate prudential regulator (as defined in section 1002 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5481)).
(6) “State” means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States.
(c) If five or more persons conduct, finance, manage, supervise, direct, or own all or part of a gambling business and such business operates for two or more successive days, then, for the purpose of obtaining warrants for arrests, interceptions, and other searches and seizures, probable cause that the business receives gross revenue in excess of $2,000 in any single day shall be deemed to have been established.
(d) Any property, including money, used in violation of the provisions of this section may be seized and forfeited to the United States. All provisions of law relating to the seizures, summary, and judicial forfeiture procedures, and condemnation of vessels, vehicles, merchandise, and baggage for violation of the customs laws; the disposition of such vessels, vehicles, merchandise, and baggage or the proceeds from such sale; the remission or mitigation of such forfeitures; and the compromise of claims and the award of compensation to informers in respect of such forfeitures shall apply to seizures and forfeitures incurred or alleged to have been incurred under the provisions of this section, insofar as applicable and not inconsistent with such provisions. Such duties as are imposed upon the collector of customs or any other person in respect to the seizure and forfeiture of vessels, vehicles, merchandise, and baggage under the customs laws shall be performed with respect to seizures and forfeitures of property used or intended for use in violation of this section by such officers, agents, or other persons as may be designated for that purpose by the Attorney General.
(e) This section shall not apply to—
(1) any bingo game, lottery, or similar game of chance conducted by an organization exempt from tax under paragraph (3) of subsection (c) of section 501 of the Internal Revenue Code of 1986, as amended, if no part of the gross receipts derived from such activity inures to the benefits of any private shareholder, member, or employee of such organization except as compensation for actual expenses incurred by him in the conduct of such activity; or
(2) any savings promotion raffle.
Which seems to be an exemption that explicitly permits the kind of app I aspire to build, at least as far as the federal government is concerned. Which leads me to my question? Can you avoid the legal necessity of having to build your casinos offshore, if you just make sure your US based casino isn't legally incorporated as a "for profit" corporate entity?
Thanks
-Roger
Quote:If you were to start or take over an offline casino today what would you differently to the standard
practices currently in place within the industry? How about an online casino?
Funny you should ask. I’ve toyed with opening my own casino for years, but I don’t have the start up
funds to do it properly. However, if that day should come, my philosophy would be to offer the best
overall odds online. Meanwhile, I will not be jumping over the cliff with everybody else with bonus offers.
I am curious if you (directly addressing the wizard now) would be willing to engage in a more in depth and private discussion regarding my idea via email?
mortdeus@gmail
Quote: mortdeus(e) This section shall not apply to—
(1) any bingo game, lottery, or similar game of chance conducted by an organization exempt from tax under paragraph (3) of subsection (c) of section 501 of the Internal Revenue Code of 1986, as amended, if no part of the gross receipts derived from such activity inures to the benefits of any private shareholder, member, or employee of such organization except as compensation for actual expenses incurred by him in the conduct of such activity; or
(2) any savings promotion raffle.
Which seems to be an exemption that explicitly permits the kind of app I aspire to build, at least as far as the federal government is concerned. Which leads me to my question? Can you avoid the legal necessity of having to build your casinos offshore, if you just make sure your US based casino isn't legally incorporated as a "for profit" corporate entity?
Not the way I read it. You have to be "an organization exempt from tax under paragraph (3) of subsection (c) of section 501 of the Internal Revenue Code of 1986, as amended." That reads:
"Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office."
Unless you are a corporation that meets one of those conditions, the gambling ban applies to you. Besides, even if you were, you are not allowed to make a personal profit, so why bother?
Quote: ThatDonGuyQuote: mortdeus(e) This section shall not apply to—
(1) any bingo game, lottery, or similar game of chance conducted by an organization exempt from tax under paragraph (3) of subsection (c) of section 501 of the Internal Revenue Code of 1986, as amended, if no part of the gross receipts derived from such activity inures to the benefits of any private shareholder, member, or employee of such organization except as compensation for actual expenses incurred by him in the conduct of such activity; or
(2) any savings promotion raffle.
Which seems to be an exemption that explicitly permits the kind of app I aspire to build, at least as far as the federal government is concerned. Which leads me to my question? Can you avoid the legal necessity of having to build your casinos offshore, if you just make sure your US based casino isn't legally incorporated as a "for profit" corporate entity?
Not the way I read it. You have to be "an organization exempt from tax under paragraph (3) of subsection (c) of section 501 of the Internal Revenue Code of 1986, as amended." That reads:
"Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office."
Unless you are a corporation that meets one of those conditions, the gambling ban applies to you. Besides, even if you were, you are not allowed to make a personal profit, so why bother?
501(c)(3) is just the statue that describes charities contributions to whom are tax deductible. You properly quote the definition but it is broad enough to cover basically all charities you donate to and take a deduction. There are various requirements but I think the OP could structure his corporation as having a “charitable” purpose.
Quote:Not the way I read it. You have to be "an organization exempt from tax under paragraph (3) of subsection (c) of section 501 of the Internal Revenue Code of 1986, as amended." That reads:
"Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office."
Unless you are a corporation that meets one of those conditions, the gambling ban applies to you.
While I am not 100% sure my idea would qualify according to the IRS's strict standards, I feel pretty confident that I could present a very compelling case why my non profit casino should qualify for tax exempt status and the federal exemption. I've spent quite a bit of time researching the IRS aspect of this idea tonight.
https : // www . irs . gov /pub/irs-pdf/p3079 . pdf
Quote:Besides, even if you were, you are not allowed to make a personal profit, so why bother?
It's worth doing it as a non profit because if my app actually works out exactly as I envision it could work out in the best case scenario ; the primary spoils will be all the priceless recognition I receive labelling me as a disruptive and innovative engineer. This recognition makes it much easier to pursue the far more ambitious (and thus far more risky) "for profit" projects I want to build but can't without a strong enough reputation to attract the best cofounders this industry has to offer.
Also non profit doesn't mean there aren't executives and employees who get paid reasonable salaries. I just think it's kinda nifty to make a casino that is completely contrary to everything the biggest gambling critics will think the second you try to tell them you want to build "yet another online casino".
Quote: heatmapi just dont understand why people dont first take the "play credits" route. you have nothing to lose. you set the amount of credits. people can buy an unlimited amount of play credits. no gambling is happening what so ever. screw it ill do it.
My idea only accepts and pays out in cryptocurrency, and it's absolutely essential to my design philosophy not to allow this service to be misconstrued as a business that is directly involved in the process of crypto <-> fiat currency exchange. This app is meant to be something for people with a ton of bitcoin already to use as a means to get bitcoin into the hands of the very people we need to start building cool apps (like this) that incorporate cryptocurrency as a fundamental design element. For example, we need apps that have highly valuable features you can only buy with bitcoin and not fiat currency.
Regardless of how counterintuitive this all may seem when taken only at face value, there is a lot more to this idea when you can finally see how it behaves after being released back into the wild.
You could switch it around and make it a charity for CS grads, and it helps pay back their student loans / tuition.
Quote: RSI read it as charitable = no taxes.
You could switch it around and make it a charity for CS grads, and it helps pay back their student loans / tuition.
The point of targeting open source developers is that their contribution to society is so insanely profound and far reaching that it is utterly irresponsible for society to not even try and give something back, simply based on principle.
Somebody who takes out a loan and goes to school is investing in their own future financial security. Somebody who builds critical software our entire industry depends upon is investing in everybody's future financial security in some form or another. And yet most of them still go pretty much completely uncompensated, and even worse to even become somebody who gets paid to work on open source you essentially have to get hired on to one of the tech companies (assuming there are any) who is currently sponsoring the development of the project your working on. In that situation you become subjected to a chain of command that may or may not respect your values and ideal vision for the app's roadmap.
Also another reason why I target open source specifically is that a huge part of my app is completely dependent on a vcs like git being used alongside a public repository hosting service like github. Without that I can't build a bot that fully automates the primary responsibility of the CEO. (namely the management of talent acquisition and optimized compensation)
Quote: mortdeusThe point of targeting open source developers is that their contribution to society is so insanely profound and far reaching that it is utterly irresponsible for society to not even try and give something back, simply based on principle.
Somebody who takes out a loan and goes to school is investing in their own future financial security. Somebody who builds critical software our entire industry depends upon is investing in everybody's future financial security in some form or another. And yet most of them still go pretty much completely uncompensated, and even worse to even become somebody who gets paid to work on open source you essentially have to get hired on to one of the tech companies (assuming there are any) who is currently sponsoring the development of the project your working on. In that situation you become subjected to a chain of command that may or may not respect your values and ideal vision for the app's roadmap.
Also another reason why I target open source specifically is that a huge part of my app is completely dependent on a vcs like git being used alongside a public repository hosting service like github. Without that I can't build a bot that fully automates the primary responsibility of the CEO. (namely the management of talent acquisition and optimized compensation)
I meant it more so as.....your charity is setup to "reimburse student loan debt" instead of "paying them wages", and your target would be those who work on open source projects who don't get paid to do it. That way you can more easily claim it's a non-profit.
But yes, I fully support what you're doing (or trying to do so far). I wish you luck and much success.
Quote: mortdeusMy idea only accepts and pays out in cryptocurrency, and it's absolutely essential to my design philosophy not to allow this service to be misconstrued as a business that is directly involved in the process of crypto <-> fiat currency exchange. This app is meant to be something for people with a ton of bitcoin already to use as a means to get bitcoin into the hands of the very people we need to start building cool apps (like this) that incorporate cryptocurrency as a fundamental design element. For example, we need apps that have highly valuable features you can only buy with bitcoin and not fiat currency.
Regardless of how counterintuitive this all may seem when taken only at face value, there is a lot more to this idea when you can finally see how it behaves after being released back into the wild.
you dont charge dollars, you charge bitcoin for N amount of coins.... exchange bitcoin after...
