Have a look at http://forum.litecoin.net/index.php/topic,652.0.html  regarding a proposal for listing a LTC security that operates a LTC denominated lottery.

Moved to http://forum.litecoin.net/index.php/board,7.0.html

You might have heard about https://dvc-lotto.com. I want to bring up the same based in Litecoins, bet in LTC, get paid in LTC.
But instead of running it completely by myself, I'ld like to share the risk and the profits with interested investors.

I put together a first draft of a possible contract, feel free to comment, correct and improve it.

Objectives
Operate a LTC denominated Lottery system based on the results of the Germany 6aus49 system.

Share Issue:
12,000 shares, 2,000 will remain ownership of share issuer, 10,000 shares will be sold at 10LTC each.

Share issuer will not sell his assigned shares within the first 90 calendar days after the security has been listed

The shares have no voting rights.

Costs/Expenses:
Running the lottery will incur costs for:
Onetime:
-   Security listing fees
2,500 LTC

-   initial payment for the lottery software
25,000 LTC

-   setup costs for the server infrastructure (server, SSL certificates, eMail service, backup services)
3800 LTC for email sevices (2 years)
1000 LTC for SSL certificate

-   Marketing activities, advertisements, promotions such as onetime lottery events
Adhoc, as and when deemed necessary

-   Stock buy backs
Adhoc, as and when deemed necessary

Monthly recurring costs:
-   server infrastructure hosting
2000 LTC per month

-   software maintenance
DVC-Lotto will receive 10% of the lottery fees collected for ongoing software maintenance and support

-   application operation and support
DVC-Lotto will receive 10% of the lottery fees collected for ongoing application support

-   5% of collected fees will be withheld and saved for unplanned expenses, or any of the above mentioned one time activities


The capital raised by the IPO is used to pay for the operational costs for the first two years. After two years, the operational costs will be paid out of the fees collected from the lottery. Should the fees not suffice to pay for the operational costs, then either further shares will be issued or the business closed.

Exchange rate risks:
To mitigate exchange rate risks, the funds raised required for paying the monthly infrastructure costs (2000 LTC*24 months) will be exchanged to USD once the business is established and the shares sold, thus the monthly operations is not endangered by adverse exchange rate effects.

Dividends:
Dividends will be paid monthly in LTC, in the first week of each month.

In a simplified version: Dividend paid out = Total collected fees – 2000 LTC server hosing fees – 10% of collected fees for software support – 10% of collected fees for application support. – 5% withheld payouts

Long Term Profitability:
For the Lottery to reach a break even, a weekly average betting volume of 13,333.33 LTC, assuming a 5% fee, is required.

Calculation:
Fees collected = 0.05 (Fee) * 4 (weeks) * 13,334 LTC (weekly volume) = 53,333.32 LTC
Profit =     2,666.66 LTC
   - 2000 LTC hosting fees
    - 266.66 LTC (Software support)
   - 266.66 LTC (Application support)
   - 133.33 LTC (accrual)
   = 0.01 LTC

For the lottery to achieve a 1.5% monthly dividend yield, the weekly average betting volume must exceed 25333 LTC.

Risks
   Fluctuation of LTC/BTC price
   Liquidity of LTC/BTC trades on the exchanges
   Legal risks of operating an online lottery
   Security breaches
   Insufficient interest, collected fees not covering the operational costs

Assumptions / Preconditions:
This contact comes only into effect once more than 8,000 shares are sold. In the event that the shares are not sold within 2 months of the security listing, then the security issuer will cancel the listing and offer a buy back of all shares at the issued share price. Note: each party will pay the incurred trading fees.

All calculations have been made based on an assumed 0.0035 BTC/LTC rate

 0.14 BTC

Thus as an Exchange operator I have only one possibility, regularly move all coins out and back in, thus combining the small transactions into larger transactions.

Recently the transaction errors when sending NMC or I0C are increasing, whenever sending larger amounts (sometime a couple of hundreds only), the error:

error: {"code":-4,"message":"Error: Transaction creation failed  "}

shows up. I then have to break down the transaciton into several smaller transactions.

Consolidating all Vircurex related announcement threads to https://bitcointalk.org/index.php?topic=49383.0

Good point. It somehow wondered off to the Alt-Chain Threads. I'll consolidate them back to this thread and update the first posting to reflect current status.

Or you just use the existing Platforms:  https://cryptostocks.com or http://www.glbse.com

Devcoin (DVC) Lottery based on the German 6 out of 49 System
 
https://dvc-lotto.com
 
Bet using your DVCs on the official results of the German 6 out of 49 Lottery System. Every Saturday evening at 22:00 (UTC+1), the numbers are drawn, the event can be watched on TV.

The service is available since 24th September onwards. The first 100 registered users will receive 50,000 DVC for free.
 
How does the system work?
You pick 6 numbers between 1 and 49, and one number between 0 and 9. You win based on how many of the numbers you picked match the weekly draw rsults.
 
How are the winning amounts calculated?
We take the total collected bets, subtract our fees for the service (5%) and distribute the remaining amount to the winners. The details of the quota calculation are documented on our web page. It is based on the official Lottery calculation schema.
 
How do you ensure transparency of the payouts?
Bets can be placed till 18:00 (German time). You can download the list of all bets placed from the web page prior to the draw, hence allowing you to verify our quota calculation and pay out amounts.
 
Fees?
One bet costs 10,000 DVC. We charge 5% fees.
 
Early announcement: We will release the same service for Bitcoins soon given sufficient interest.

Neither of them is incorporated at this point in time, its of rather low priority at the moment, given the current business volume we are making.

As to your question on "current legal climate offering securities":  Most likely it wont be possible to open a security exchange in any of the countries in this world, we'ld probably need to rephrease it as Project Financing, Micro-Credit Facilitation, etc. But even then, I doubt Germany is an option, looks as if that kind of business requires to be registerd with the BAFIN (http://www.bafin.de), so if the day comes were we must get incorporated, an offshore loction will probably be the way to go.

The Pirate default is ofcourse a most unfortunate event. The size of the default is putting even more scrutiny on the Bitcoin economy by government agencies than we had before and might even limit or hamper the future operations for crowd funding platforms. But the beauty of electronic exchanges and the nature of Bitcoins, it won't be difficult to relocate the hosting infrastructure to another county when necessary, knowing that it doesn't necessarily solve the problem about the US Wire Act.

The lottery is a state owned lottery system and broadcasted live on German TV. Results can be seen on any of the official web pages of each of the counties (if that's what the equivalent is to the German Bundesland).

An overview is at http://lotto.de. It's in German only. But here a guide to the non-German speakers:
There are two sets up numbers at the top: One for the Saturday lottery, one for the Wednesday lottery.

Look for the text: Ziehung Samstag

Those are the Saturday Lottery result.

dvc-lotto covers only the Saturday results.

One the right hand side are links to each of the county's related information pertaining to the Lotto system. They ofcourse all show the same result just adding their local ads to it.

1. The winning numbers are based on the officially drawn numbers of the Germany 6 out of 49 Saturday lottery. No cheating possible here. You can watch it live on TV
2. Everyone can download all the placed bets from our web page. As we close taking bets at 18:00 on Saturday (German timezone), you can download all bets at 18:05, wait for the official numbers to be announced and then validate all our payment details as well as the quota calculations that we publish.

I believe this setup guarantees complete transparency for all participant as well as accountability of all payments.

I would consider franchising the code, anyone seriously interested providing this service based on LTC? PM me to discuss possibilities. Before contacting me, be reminded, running such a platform requires a considerable amount of time and technical expertise.

The webpage has opened today. The first 100 users who register will receive 50,000 DVCs for free.

Der Service ist nun aktiv, die ersten 100 Registrierten User erhalten 50.000 DVC auf ihr Konto gutgeschrieben.

A verification system has been build in, but it is the security issuer's choice whether or not and if yes, what level of verification he chooses. The investor on the other hand has the choice to invest or not invest into securities issued by unverified people.

One the screen "Bets" there is a tab called "Random generator". You enter the date for which to place the bets and the number of bets you want to place. It then generates random bets for that date (or subsequent dates if you place bets for multiple weeks).

Is there a limit on how many coins I can withdraw from the wallet in one transaction? Tried sending 32,000,000 but I got the error message "Invalid amount". Had to break it down to 20000000 and 12000000.

It's on our to-do lust. As interest in 2 factor authentication is increasing, we'll move it up our priority list.