According to unofficial data, the iGambling market capitalization stands at $ 350 billion for 2018 and is growing steadily. Despite the rapid development of this industry, there are many problems plaguing online casino services, such as the difficulty of using the platform, low speed and lack of entertainment value of the service, as well as rarely positive experience of winning. Today, no blockchain casino meets the complex of these criteria, which is impossible without efficiently implementing blockchain technology to the benefit of players. The main goal of KloowayBet is to create a comprehensive solution that will satisfy the interests and needs of players and ensure that the gaming platform makes a steady profit through the use of modern technologies. Our customers are all market participants who seek to play in fair and transparent online casino around the world. Modern blockchain solutions allow us to cater to all categories of consumers - from players to operators and regulators.

Introduction

Industry overview The pace of development of the iGambling industry is forcing platform owners to look for new ways to implement modern methods of satisfying players’ requests. The official online gaming market has reached $ 50.65 billion* (according to PricewaterhouseCoopers LLP). By 2023, with a cumulative average annual growth rate (CAGR) of about 10% per year, the volume will increase to $ 74 billion** (according to the expectations of the consulting company Research and Markets). Thus, the expected increase in revenue from 2017 to 2023 amounts to 46% or $ 23.35 billion.

Market overview

In Europe the market growth has been the most explosive and was obeserved in such countries as Spain, the Great Britain, Germany and Italy. In Spain, from 2013 to 2017, income from online gambling and betting services increased from 11.5 million euros to 364.4 million euros. In the first quarter of 2018, the figure increased to approximately 380 million euros, i.e., more than 3300% since 2013. In the UK from April 2015 to March 2016, the share of online gambling from all gaming activity was 33% - the online gambling industry has become the largest gambling sector in the United Kingdom. At the same time, there was an increase in active gaming accounts: in 2013-2014, their number was 24 million, in 2016-2017 - approximately 34.5 million. *https://www.gamblingcommission.gov.uk/news-action-and-statistics/news/2016/

New- figures-show-online-gambling-is-largest-gambling-sector-in-Britain.aspx

**https://www.coindesk.com/12-chinese-banks-adopted-blockchain-apps-in-2017-

filings-show

Industry experts expect iGambling’s expansion to continue into new markets – in particular, India. Thus, the Federation of Sports Games in India (IFSC) by 2019 Predicts an increase in the number of players to 100 million. Online gambling accounts for a significant share of the total industry revenues. According to the H2 Gambling Capital forecast, the figure will reach 14% by 2023.

Implementing blockchain in iGambling For the users of gambling services the safety of funds, transparent reporting on the transactions and the immutability of the RTP platform comes first. Most online casinos do not conform to these requests. Delayed payment or non-payment of funds, the falsification of data on the rate - these problems are something online gamblers are facing. Today blockchain technology is uniquely positioned as the right solution to these problems. It is recognized by governments and banking institutions as a technology to improve the quality of service by building more transparent and honest customer relations. 12 of the 26 banks in China have already implemented the technology, the Russian Sberbank has set up a blockchain laboratory and launched 20 pilot projects with the introduction of the blockchain, and the global corporate blockchain system for payment netting CLSNet is used by the largest banks in the world - Bank of America, Goldman Sachs, Citibank, Morgan Stanley, JPMorgan Chase and Bank of China. Blockchain was first used in the iGambling industry in 2013. Blockchain records indicate that about 51% of all cryptocurrency transactions were generated by gambling accounts. From 2014 to 2017, bets were made for a total amount of 3.7 million BTC. Between 2015 and 2017, over 24.5 billion interest rates were paid using coins, according to statistics from Bitcoin Strip. The data of 2017 pointed to the commission of 337 rates per second with an average monetary value of 3.09 BTC per minute. Statistics indicate that at the current stage of market development blockchain technology is used only partially. For example, to receive payments in cryptocurrency. The benefits of the technology remain unrealized, such as the immutability of data registry and automatic execution of smart contracts. Blockchain needs to be actively implemented to regulate, increase transparency and trust in the iGambling industry. KloowayBet offers solutions to achieve these goals with the help of the platform its team is developing.

iGambling industry issues The fundamental problem of online gambling is the low degree of trust of players to the casino. The annual average increase in the online gambling market share is only 11.2%. The fall in the credibility rating of online casinos is influenced by cases of litigation that arise as a result of accusations of dishonesty, lack of transparency of providers an owners of platforms. Our mission is to provide fully transparent processes within the gambling platform to ensure player confidence. Our goal - technically transform the processes in the online gambling industry and make it more attractive for both investors and players in a short timeframe, and by consequence to make a profit through the implementation of these stages.

Payment problems Most online casinos have an non-transparent and complicated payout process. As a rule, casinos require a large amount of documents from a player and deliberately create many obstacles in order to delay the payment and give the player the opportunity to lose his winnings. .The KloowayBet platform allows the player to confirm the identity once, to receive payment automatically on request. .

Casino discreditation Online casino does not give the opportunity to verify the integrity of the results of the game. It is widely believed that the casino changes the results of the game, the size of the bet or odds in their favor. .On the KloowayBet platform, the player will be able to check the result of the game for integrity and make sure that the gaming session is legitimate

Blockchain speed Most online casinos use outdated public blockchain networks, which limits the maximum speed of the game and entails high transaction costs. KloowayBet created their own blockchain solution based on Hyperledger, in which there is no limit for maximum speed due to its scalability. The solution eliminates all performance issues on any devices and additional fees. Fraud Protection Online casinos still have vulnerabilities at the data protection layer. Some unscrupulous casinos manipulate the accounts of their players In KloowayBet all distribution of funds, deposits and withdrawals of winnings is recorded on the blockchain, processed independently and controlled by a smart contract. This solution allows the players at any time to look at the transaction history of their accounts, games and outcomes.

Currency volatility Most casinos built on blockchain use the same coin that is traded on the exchange as a gaming chip. This leads to high volatility of the currency that is used by players to make bets. .KloowayBet resolved the problem by tying the KLWU game chip to the most stable e-currency USDC. Thanks to it, the price of gaming chips will always be equal to $ 0.01. Buying the same game chips KLWU is possible with any type of currency - from dollars and euros to bitcoin and ethereum.

Casino rapacity It is accepted that the casino is the place that is trying to make money on the players, to strip them of all their funds. Our platform has moved away from this rule and has enabled our users to have passive income by purchasing digital shares of KloowayBet, and periodically receive dividends from the casino profits. • .

Problems that KloowayBet resolves:

Architecture of the platform The KloowayBet platform consists of the following core modules: Front-end, Back-end, RNG - random number generator and blockchain. Blockchain consists of two main components: Mainchain and Sidechain. Mainchain - Ethereum-based public network. Sidechain - HyperLedger-based public network responsible for gameplay processing. It facilitates the rapid movement of gaming chips inside the platform and controls the gameplay. The in-game blockchain is a decentralized database for storing time-sequential events. Any user will be able to deploy the full node on his computer. Validation of data in the blockchain is made only by the platform. Users can view transaction data using their game session ID or their game wallet number. • .

Technical solutions

KloowayBet solution is the interaction of two blockchain networks, where the first (Sidechain) acts as the main network of the platform. With its help all game processing is carried out. Developing of our own blockchain network is the only way to create commission-free transactions that will be recorded in the public authoritative network based on Ethereum (Mainchain). Block hashes from the KloowayBet core network will be regularly added to the public network. Anyone can compare these hashes with the hashes provided by the main KloowaBet network and make sure that there is no substitution of information in the main network. Besides, the Ethereum public network is the place where all transactions related to depositing and withdrawal of players' funds happen. • .

The interaction of two blockchain networks (Ethereum and HyperLedger)

Process: Ethereum • User Deposit Operations • Storage Bank Platform • KLWS Token Operations • Dividend payment

HyperLedger • Game processes • Operations with user wallets • Transactions in game chips (KLWU) • Verification of in-game transactions

Dividends payout The digital shares of the KloowayBet platform - the KLWS-token - entitles all investors of the platform to receive dividends, which are formed by the profits of KloowayBet. Dividends are accrued at a random point in time. This is done in order not to provoke a stir on the exchanges before and after the payout date. Only platform decides when exactly the accrual of dividends is to occur. The smart contract of the KLWS token, using the list of holders, calculates the share of the platform’s revenue at the time of payment in proportion to the number of tokens in posession of each holder. A smart contract is automatically executed, which, according to a calculated table with dividends, transfers USDC amounts to KLWS on a pro-rata basis. . • .

RNG RNG - random number generator The generation of a random number occurs with the participation of the player - he can influence what this number will be. The mechanism works as follows: at the beginning of a game session (for example, slots), the player is given a hash of a random number created in the RNG platform. The player, in turn, can affect the generated number - on the main screen of the game there is an additional window in which the user may write any number. Thus the generated random number can be affected and changed. At the end of the gaming session the player will be able to see the random number that was generated by the platform by using the blockchain platform explorer. • .

1. At the start of the game, a random number is called from the player's interface;

2. A random number is requested on the RNG server

3. The server returns a hash from the generated random number and salt;

4. The user receives information that a random number is generated and recorded on the blockchain

5. The user sends information about the bet and his random number to the blockchain;

6. A request is made to the server to get the number to play

7. Data is sent to the game server and recorded on the blockchain

8. The result of the game is displayed to the user.

Betting mechanism: • Bet choice • Outcome selection • Choice of bet amount • Bet confirmation After all the player’s actions the platform forms a coupon rate. The gaming platform checks the player’s balance and bet. Next, it creates an entry in the betting Smart contract and events Smart contract. . Information inside Smart contract: • Event • Date and time of the bet • Bid amount • Information from the player's coupon

Betting

After the end of the event, the platform calls the Smart Event Contract, which compares the internal information of the contract with the outcome of the event. The latter performs checks and payments at the players' stakes. In the case of a single bet, the player instantly receives his winnings. Provided that the bet won. The main uniqueness and distinctive feature setting us apart from regular bookmakers is that the KloowayBet platform is completely transparent. All operations within the platform - payments to players, random number generation, event outcomes - can be verified. After the player confirms the bet, all events about the outcome on which the bet was made are recorded in a coupon. The latter is formed after the player makes a bet. Coupon data is recorded in a smart contract after an event or series of events has been played. From the oracle (a program that gives information about a particular event and outcome), a signal comes to the smart contract. Next, the program checks the accuracy of the event and the information provided, makes payments if the bid was successful, or closes the smart contract.

Card deck generation at the beginning of the game a deck of cards coded by the croupier is generated on the table. Smart contract is formed on a gaming table, each of the participants of which is recorded under his own unique hash. Any action of the player is fixed in the smart contract. .

Card games

The Game The croupier (smart contract) distributes cards to players from an encrypted deck using his key. The key is encrypted separately for any deck of cards participating in the game.. Each of the cards dealt is fixed in a smart contract in the same way as all bets. If a player during his turn does not perform any actions, then a record is made in the smart contract that the player has folded. After each game, the winners are paid chips to their personal gaming accounts. Croupier keys that hide game decks are published in the public domain one day after the game so that players can check the fairness of the hands played. All data on the actions of the players, information about the winnings and the cards laid out is recorded in a smart contract. All gameplay is carried out on its own KloowayBet developed system (Sidechain). You can find a more detailed technical description of the project in our Yellow Paper.

Token description The KloowayBet ecosystem will feature two tokens: KLWS (Security token) and KLWU (Utility token). The tokens serve two different distinct purposes. .

KLWS token is an investment instrument, a dividend-yielding security, that works in the same manner as a digital company share. The KLWS dividend tokens, unlike shares, only provide passive income to its holders in the form of regular payouts in crypto. KLWS does not provide any ownership rights pertaining to the gambling platform, nor does it grant any voting rights to its owner. Rewards to KLWS token holders shall be paid on a pro-rata basis in USDC (a crypto stablecoin) at regular intervals, their amount set at 70% of GGR (Gross Gaming Revenue is calculated by subtracting the the sum of all winnings from the total sum of bets, before operational costs). After KLWS tokens are issued, they’ll be tradeable on exchanges, the list of which will be announced according to the roadmap. KLWU token is a utility token for intra-platform transactions only and works like a classic casino chip. KLWU has a stable price expressed in USDC stable coin and fixed at 0.01 USDC, which protects it against market volatility. When a user buys KLWU, the cryptocurrency he pays for it is transferred to a dedicated digital wallet. The sum cryptocurrencies, backing the value of KLWU in circulation, will be publicly viewable on the platform. .

Tokenomics

General description

Token Sale stages The token sale is conducted in 4 stages, each stage tied to a particular stage of the platform modules development. .

Stage 1 Dates:

February - April 2019 Pre-match betting module

development Tokens for sale

100 000 000 KLWS (10% of total supply)

Stage 2 Dates:

May - July 2019 Poker & Slots module

development Tokens for sale

250 000 000 KLWS (25% of total supply)

Stage 3 Dates:

August - October 2019 Live betting module

development Tokens for sale

350 000 000 KLWS (35% of total supply)

Stage 4 Dates:

November 2019 - January 2020 Skill games & Fantasy sports

modules development Tokens for sale

300 000 000 KLWS (30% of total supply)

Public token sale starts on February 20, upon completion of the private pre-sale of KLWS among the regular customers of Klooway Tech. The price of KLWS for early investors is 0.04 USDC and it will increase to 0.08 USDC as the token sale progresses. KLWS tokens will be distributed to personal wallets after the end of the token sale. Bonuses for early investors (awarded in KLWU tokens) scale down according to the following schedule: Before March 20, 2019 - 20% Before April, 2019 - 15% Before May, 2019 - 10% Example: Purchasing $100 worth of KLWS before March 20, 2019, the client additionally receives $20 worth of KLWU tokens. By registering an account on our STO website, users are automatically signed up for the platform under development. It provides an opportunity to shape the product early on and contribute to improving it. Submit your application to become a member of work groups, consisting of first users to try out the platform and provide valuable feedback. You may refer to the Token Purchase and Sale Agreement (TPSA) for more detail on the token sale. The document is available on our official website www.klooway.io

The entire supply of tokens generated (max. TS = 1 000 000 000 KLWS) is to be distributed according to the chart below: : 70% - Token Sale allocation 15% - Reserve fund 10% - Team 5% - Advisors

Token allocation

Funds allocation The funds raised during the Token Sale are to be distributed according to the following chart: 50% - Marketing 17% - R&D 13% - License acquisition 8% - Equipment and facilities 5% - Legal & compliance 5% - Advisory and analytical services 2% - Administrative costs

Token Offering Corporate Structure The offering of DLT-based (Distributed Ledger Technology) digital assets for the gambling platform KloowayBet is conducted by the group of companies under the trademark Klooway. In order to efficiently and optimally achieve the goal of launching a gambling platform in a timely manner, two separate entities will be responsible for the following functions: 1. Token generation event and management

of the gambling platform 2. Marketing efforts for both the token sale

event and platform promotion

Respectively, the token generation event and platform management are conducted by KloowayBet Ltd (Limited Liability Company KloowayBet Ltd, Domain Building, 102/104, Constitution street, MST 9055, Mosta, Malta, Registration number C 89724), while marketing and promotional activities are conducted by Klooway Technologies OÜ (Private limited company «KLOOWAY TECHNOLOGIES OÜ», Address: Ida-Viru maakond, Narva linn, Tallinna mnt 32-232, 21006, Registry code – 14421662).

Legal information

Guarantees and insurances A large number of investors have recently been disappointed by the so-called “ICOs”, most of which did not have a real use case, while some of their founders performed exit scams and left with the funds, and some faced legal consequences. All of these events had a negative influence on the innovative ideas that blockchain technology represents. We believe that now is the time for honest projects to come into spotlight, projects for which blockchain technology is not a marketing trick or a buzzword, but an actual means to deliver a great product to the consumer market. Our team made the decision to conduct not a classical ICO, but an STO, an initial offering of our dividend tokens, KLWS. KloowayBet does not prioritize raising funds from retail investors at all costs, the platform is scheduled to be launched regardless. The goal we have in mind and the reason to raise additional funds is scaling of our future platform in order to capture a larger gambling market share. KloowayBet team is providing an opportunity to purchase a unique financial product - the dividend token KLWS. For our team the gains are in profits received from attracting more customers on a larger scale. If you refer to any given ICO project’s risks and guarantees section, you will see that the project does not make promises concerning the future profits of the digital assets they offer for purchase. We are the world’s first gambling platform built on blockchain to guarantee the public transparency of Gross Gaming Revenue or, for instance, poker rake, 70% of which is distributed on pro-rata basis among token holders. RTP is not only guaranteed by the project’s team or formal law, the blockchain technology itself ensures it. Presently the only thing that matters is the legal kind of guarantees. However in the situation of legal uncertainty, when legal framework lags behind the IT sector progress, it’s difficult to resort to strictly-defined legal guarantees. Current regulatory landscape concerning cryptocurrencies and tokens is too vague to provide certain guarantees to tokenholders.

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On the other hand, modern technology allows to present guarantees on a level higher than the legal one. Legal guarantees can not prevent malpractices, they only resolve the situation post-factum according to the law. Technological guarantees, as opposed to that, make it impossible for anyone to not fulfill their obligations and promises, while enabling everyone to verify the integrity any party. It’s a foregone conclusion that as technology progresses, the focus will shift from legal guarantees and regulations towards blockchain technology, which makes proving whether one is wrong or right according to the law unnecessary. Our project offers technological guarantees, in addition to legal guarantees, to its token holders that are potentially far more important than the latter. This kind of guarantee is programmed in a certain way to be transparent, automatic, immutable and verifiable.This way the following is guaranteed: 70% of cryptocurrency gained as GGR (Gross Gaming Revenue) will be distributed via a smart contract to KLWS token holders on pro-rata basis. The periods of distribution are determined chaotically and it’s executed automatically. The owners of the platform can not modify the share of distributed profits, nor the total size of GGR. These values can be verified by anyone who wishes to keep the platform in check and see whether user data has been tampered with. The process of dividend distribution to user wallets is also completely transparent and verifiable due to the nature of blockchain technology. All KLWU tokens are backed by the USDC stablecoin and can not lose their value due to market volatility. The funds used to purchase KLWU are transferred to a dedicated digital wallet. The proof of funds backing all KLWU in circulation will be publicly available. RTP (Return to player) will be explicitly set in blockchain. It will not be modifiable and can not be controlled by the platform, which can be easily verified by any player. The RTP will be set at a respectable 95% which effectively means that 95% of all bet amounts is returned to players in the form of winnings in the long term. This provides our platform a serious competitive edge over other gambling resources and makes playing on it more advantageous. The RNG (Random Number Generator) will not be controlled by the platform and the results it produces will be stored on blockchain, making the outcomes verifiable and immutable. The implementation of blockchain in all core processes on the platform, including the relations with players and token holders, is an innovative technological solution that ensures the fulfillment of our obligations. .

Service Licensing One of the most lengthy, tedious and costly procedures in establishing a gambling platform is the process of obtaining gambling licenses in as many jurisdictions as possible. Our platform is planned to rely on scaling and expansion of player base as opposed to milking a small number of users, this is why licensing is extremely important to us. Before the token offering event our team has already initiated the procedures of obtaining gambling licenses on Malta, but we plan to regularly working towards receiving licenses, sometimes by establishing offices in other countries, and we aim to be represented in the following jurisdictions: Malta, Curacao,

Risks Regardless of the unprecedented guarantees we take upon ourselves to provide, the state of the crypto market and the relatively new technology underpinning it, imposes certain risks, of which we are obliged to inform our clients.

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Roadmap

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