Tuesday, July 05, 2005

US 6,887,152 on method for lottery game

Edward Stanek, president of the Iowa Lottery and one of two men who came up with the Powerball game in 1992, has patented an international jackpot game and a new lotto game that could some day be played in the United States.

Stanek and Powerball co-creator Steve Caputo, the former Oregon lottery official, have never received royalties from their invention of Powerball. The game has generated about 17 (B) billion in sales for lotteries nationwide in the past 14 years.

Stanek is well paid, however, as the nation's senior chief lottery official.

He decided last year not to take early retirement and the state gave him an 81-thousand dollar pay raise.

Stanek is now one of the state's higest paid employees, with an annual salary of 207-thousand dollars.

[from who-tv website]

***Of the patent -->


Claim 1:

In a lottery game to be played among a plurality of groups, the lottery game requiring payment of an entry fee by a player and a method of paying prizes, the prizes consisting of a jackpot and first and second subordinate prizes, the method comprising the steps of:

accumulating an individual group prize pool for each group participating in the lottery game from a first portion of the entry fee;

accumulating a super prize pool from a second portion of the entry fee;

paying the first subordinate prizes from individual group prize pools;

paying the jackpot and the second subordinate prizes from the super prize pool in one or more groups having a jackpot winner; and

creating a jackpot prize limit in one or more of the groups such that money in the super prize pool in excess of the jackpot prize limit is awarded as second subordinate prizes.

From "background":

Many different types of lottery games have been sold over the course of history in various jurisdictions. The "traditional" game has been sold for several hundred years. This game is based on the concept of a raffle. Generally, tickets are sold with unique numbers. The drawing mechanism is developed, often using balls, sometimes thousands of them, each with a unique number corresponding to a ticket. Other times individual digits for winning numbers are drawn from a series of machines. The drawings are held so that a large prize and subordinate prizes are paid according to the unique numbers drawn and delegated to a particular prize level. Sometimes subordinate prizes are paid for matching part but not all of the numbers as long as the digits being matched are a subset of the digits on the balls drawn in exact order.

Instant lottery tickets, also called scratch tickets, were invented in the second half of the 20th century. They utilize a secure printing medium with numbers or symbols covered by latex or some other material. The covering is scratched and players win prizes by adding up, lining up, or matching covered symbols. Various patents have been issued relative to the substrate, security precautions, symbol coverings, and play styles for these types of games. They now account for roughly half of lottery sales in North America.

Another type of lottery ticket is the pull-tab ticket. It utilizes layers of cardboard glued together, with one layer having a series of perforations to form tabs. As the tabs are pulled away from the ticket they reveal symbols underneath and matching various combinations of symbols leads to the winning of prizes.

The last category of lottery type games are generally referred to as lotto games and are based on the concept of picking numbers. These games usually involve players picking their own numbers or using a computer or some other mechanism to chose the numbers, in an attempt to match the numbers against those drawn by the lottery. The lotto concept was originally developed in Italy about 1580. It evolved from bets being placed on which candidates were chosen at random to serve in the senate. The betting was so popular among the citizenry that the incidence of the drawings was increased and the names of senators changed to numbers.

One of the most successful lotto type games in modem times is commonly known as pick 3. Players choose three digits from zero to nine. The lottery chooses three digits from zero to nine. If the player's numbers match the lottery's numbers in exact order, a top prize is won. Other betting variations can be made where a player chooses to match the two front digits, the two back digits, the first and last digit, or some combination of the above. The game was typically run manually and illegally by crime networks for generations in large cities in the United States. State lotteries began to offer the game and computerized it so that it could be played efficiently on daily basis. A similar game has been developed for matching four digits.

Another typical lotto game in the United States and much of the rest of the world involves establishing a field of numbers from one to X. A player chooses, say, six of these numbers. The lottery then draws six numbers and a top prize is won if all numbers match in any order. The odds of winning the top prize can be altered by making X a larger number. In doing so there will be fewer winners of the top prize, which allows lottery sellers to offer a large jackpot prize. The prize can further be enhanced if no winner is chosen in a particular drawing. The lottery is then able to bank part or all of the non-won prize money from a previous drawing and offer it as an incentive for sales in a subsequent drawing, by increasing the size of the jackpot. In typical lotto games of this nature, subordinate prizes are also awarded for the matching of five, four, or even three of the six numbers drawn in any order. A typical prize structure for a pick 6 out of 30 game is to pay the jackpot prize if all 6 matches are correct, the approximate average odds of which are 1:593,775; pay $100 if there are 5 matches, the approximate average odds of which are 1:4,124; pay $10 if there are 4 matches, the approximate average odds of which are 1:144; and provide a free play if there are 3 matches, the approximate average odds of which are 1:15. Of course, the allocation of prize money to be divided is subject to selection or design for each ticket sold.

Keno is a lottery game in which the house draws a number of balls, say, from a group or field of balls that is larger than the number of balls selected by a player, but any match between the balls selected by the player to the balls drawn by the house counts. Lotto games are actually a subset of keno games; in lotto games, the number of balls drawn by the house or lottery equals the number of balls picked by the player.

In contrast, higher prizes can be offered by establishing a matrix of different size. If a game is chosen where the goal is to match 6 of 49, then a typical prize structure may be to pay out $2,000,000 if there are 6 matches, having an approximate average number of prizes for each drawing of less than one; $65,816.40 if there are 5 matches and a match with a bonus number, having an approximate average numbers of prizes for each drawing of 8; $1,784.80 if there are 5 matches, having an approximate average numbers of prizes for each drawing of 236; $68.10 if there are 4 matches, having an approximate average numbers of prizes for each drawing of 11,857; and $10 if there are 3 matches, having an approximate average numbers of prizes for each drawing of 213,760. A variation of this game with smaller top prizes but better odds is a pick 5 game, a game involving matching five numbers by the player's choice in the drawing in any order. There is also a variation with seven numbers.

Another variation on this concept has emerged in the last decade, typically called "rolldown" in the United States. In a rolldown lotto game everything proceeds as in a typical pick six or pick five lotto game, as above, except that in the event that there is no jackpot winner, prize money that has not been won is allocated to smaller prizes rather than being banked to enhance subsequent jackpots. Therefore the lack of a jackpot winner provides money to enhance the size of the prizes for lower tier winners. A typical prize structure and relative occurrences for a pick 5 out of 55 rolldown game may be to pay the jackpot if all 5 numbers are matched, the probability of which is 1:3,478,761; pay $500 if 4 numbers are matched, the probability of which is 1:13,915; pay $10 if 3 numbers are matched, the probability of which is 1:284; and pay $1 if 2 numbers are matched, the probability of which is 1:18.

In some instances a bonus ball can be added to a lotto game to create a prize smaller than the jackpot prize but larger than any of the other prizes. So, for instance, in a pick six lotto game a player matches only five of the six numbers drawn by the lottery; however, the lottery has also drawn a seventh ball, the bonus ball, which if paired with any five of the six other numbers drawn by the lottery creates a prize intermediate between matching five and matching the six original balls drawn.

In the last decade a new high jackpot game was developed called Powerball® (Multi-State Lottery Association, West Des Moines, Iowa). It was emulated by the Big Game in the United States (now Mega Millions), by Powerball in Australia, and similar games introduced in other countries. Unlike lotto, where the player picks six balls from one to N drawn by the lottery, the player instead chooses five numbers from one to X, and one number from one to Y. The lottery then draws five numbers from one to X and one number from one to Y from separate drawing machines and prizes are awarded according to various matches. The Powerball® lottery game is a combination of two lotto games in one. Both games must be won to win the jackpot prize. It is also designed so that any player matching the single ball drawn from the one to Y device wins a prize. The concept has been extraordinarily successful. Table 1 lays out a prize structure applicable to a typical Powerball® lottery game.


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