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ONLINE SPORTSBOOK INCORPORATION & LICENSING SERVICES
INTRODUCTION BACKGROUND OF THE CASINO INDUSTRY IN They must be located in a hotel rated three stars or above, and at least 100 meters (one block)away from places of worship, hospitals, clinics, and Schools. Anyone under 18 years old is not allowed in a casino. Failure to fulfil these requirements will cause imprisonment of the owner of the Casino and/or a cancellation of the Casino's license. Casinos are required to pay municipality operational fees, facility health permits, and any other tax applicable just like other businesses based in Costa Rica, in addition they pay an extra 10% on the monthly net revenues and for the number of game tables that they host they usually pay 50,000 colons ($162.00 exchange rate of October 10, 2000) per table. It is a crime in Costa Rica to earn or lose money by placing a bet on the outcome of a game/event/activity/behaviour, or by playing a game whose outcome is based on people's luck, and not on their abilities and skills to play the game. Therefore, it is illegal to collect or earn money based on the outcome of bets or games such as baccarat, dice, twenty-one, poker, black jack, lotteries - except for the national lottery managed by the Costa Rican organization called "Junta de Proteccion Social - bingo - except those organized by the Red Cross and educational organizations such as Schools - and roulettes. It is legal to play any of the following games: billiard, card games, canasta, draughts (U.S. checker), domino, casino, rummy, dart, 13, Caribbean straight poker, or any game where the person's abilities and skills will determine the outcome of the game. Casinos host legal games according to the law as well as illegal games and games that are not clearly defined by law. The most commonly played games are rummy, and Caribbean straight poker. Games that are not clearly defined by law and are hosted in Casinos are certain types of games using dice as well as pai gow - Chinese style poker. Casinos also host games that are prohibited by law such as roulette and gambling machines. Roulette is prohibited by the following laws: Article 3 of the "Reglamento a la Ley de Juegos," January 24, 1974 decree # 3510-G, published in "el Alcance #15 de la Gaceta #21" on January 31, 1974, and " Reglamento a la Ley #3," on August 31, 1922. Gambling machines are prohibited by the decree number 87,229 issued on June 13, 1978 prohibits gambling machines. However, an appeal was filed against this decree, this appeal essentially allows casinos to host these machines until the appeal is considered. Since it is against the law to either collect or pay monies for bets or gambling games in Costa Rica, the Casino industry implements a payment system to get around these laws so that casinos can hold you legally liable for what you owe them or to be able to pay you at their facilities. Casinos encourage gamblers to purchase tokens that are used at their casino facilities, or they give you a credit line by signing letters of credits, mortgages, promissory notes (I. O. U. notes), or written agreements so that instalments or collections can be performed and that they are still protected by regular business laws, and not gambling. There are no laws that protect or regulate either the gambler or the casino owner from collecting monies generated by gambling. HOW ON-LINE CASINOS ARE DOING BUSINESS IN As of 2000 there were approximately 125 businesses managing on-line casinos from servers based in Costa Rica. It is difficult to determine how many gaming ventures are in Costa Rica since on-line casinos are registered as technology corporations, and not as on-line casinos. They employ about 2,500 Costa Rican citizens (1999 estimate) with salaries ranging between $480.00 and $1,200.00 (1999 estimate) per month. They receive an average of 20 thousand calls per week (1999 estimate) and generate a significant amount of tax-free money. On-line Casinos based on severs in Costa Rica are free to do almost anything they want over the Internet as long as they ensure that Citizens of Costa Rica or legal permanent residents of Costa Rica do not access their servers to play the games or place a bet. On-line Casinos: • Can host any type of gambling games SETTING UP YOUR ON-LINE Second, find a place in Costa Rica that you can set up your office, hire the necessary personnel, and manage your web site from Costa Rica as any other business in the Internet industry. Third, block all the IP addresses located in Costa Rica to abide by the law and ensure that no citizen or legal permanent resident of Costa Rica connects to a server in Costa Rica to place a bet with your on-line casino. Forth, open an offshore bank account. Bahamas, Antigua, or countries in the Caribbean are the most logical places for offshore banking so that you can make your transactions outside of Costa Rica. Financial activities will be conducted through these accounts. LEGAL CONCERNS 1. No Costa Rican citizens who live in Costa Rica can place a bet on the on-line Casino TO ALL ENTREPRENEURS CONSIDERING A VENTURE TO START AN ONLINE SPORTSBOOK AND CASINO BUSINESS – OTHERWISE KNOWN AS E-GAMING OR AN E-CASINO Following information provides a basic introduction to the Internet Wagering industry INTRODUCTION WHAT IS AN INTERNET CASINO? All this takes place using software and a main server that monitors all the gambling activity. Thousands of people from all over the world can gamble at the same time at one online sportsbook and casino location. WHAT IF THE GAMBLER WINS BIG? For example, if Blackjack Vegas odds are at 97%, for every USD $1000 wagered, USD $970 is generally paid back, leaving a profit (known as a "drop" or "take") of USD $30 (3%). So, the odds of one gambler winning big is low. Furthermore, what is commonly known as "the nature of gambling" indicates that most gamblers keep going until they are out of cash. HOW DOES SOMEONE START AN INTERNET WAGERING OPERATION? 1) Design and implement all SOFTWARE for an online casino and E-commerce. Keep in mind this costs millions of US Dollars. Also necessary is a gaming license to run a casino, which requires approvals from most governments. This too, does not come inexpensively. However, one has full control of the site, and full knowledge of the software source code. In addition, no royalties are paid out to a software development company. 2) Become a Licensee of an Internet Gambling Software Provider. This is a far less expensive option and the client receives all the software and sometimes even the equipment necessary. It is also the most popular option for both licensed land-based establishments as well as entrepreneurs. Costs range from USD $ 30,000 to USD $ 350,000 (some ask as high as USD $1 Million). The average licensing fees are around USD $150,000 (this usually includes marketing costs). In most cases a royalty is paid to the software provider as a percentage of the monthly "take" or "drop" (gross profit). Usually the software provider has payment processing (merchant account providers) already set up for a turnkey operation. WHEN WOULD A CASINO BECOME PROFITABLE? Should you have any further question, or wish to order your company, please contact us.
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