AU2006100876B9 - A method of gaming with refundable entry fees - Google Patents

Description

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AUSTRALIA

PATENTS ACT 1990 COMPLETE SPECIFICATION FOR AN INNOVATION PATENT

ORIGINAL

Name of Applicants: Actual Inventor: 2G Gaming Pty Limited Marc Amour Address for Service is: SHELSTON IP Margaret Street Telephone No: (02) 9777 1111 SYDNEY NSW 2000 Facsimile No. (02) 9241 4666 CCN: 3710000352 Attorney Code: SW Invention Title: A METHOD OF GAMING WITH REFUNDABLE ENTRY FEES Details of Associated Provisional Application No. 2006903031 (dated 02 Jun 2006) The following statement is a full description of this invention, including the best method of performing it known to us File: 49810AUP04 500995683 1/5845 IND -la- O A METHOD OF GAMING WITH REFUNDABLE ENTRY FEES

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c, O Field of the Invention The present invention relates to a method and system for gaming, which is intended to be interpreted in the broadest sense, as encompassing the fields of ID gambling, gaming, wagering, betting and competitions of skill or knowledge.

r"- 00 Background to the Invention IThe following discussion of the prior art is intended to place the invention in an N 10 appropriate context and to allow the unique characteristics and advantages of it to be more fully understood. However, any discussion of the prior art throughout the specification should in no way be considered as an express or implied admission that such prior art is widely known or forms part of common general knowledge in the field.

Numerous, gaming activities are known and have been implemented in a variety of different forms. One broad category of gaming activity is commonly referred to as "para-mutual" gaming. In this form, all entry fees or bets are combined into a pool, the operator's commissions, fees and charges are deducted from the pool, and the residual amount corresponding to the prize pool is distributed among the winners of the game, according to predetermined criteria. Lotteries, totalisators and the like fall into this category.

A characteristic feature of para-mutual gaming is that the quantum of winnings is not known in advance, since this will depend upon the number of participants in the gaming activity, and the level of participation of each, which are indeterminate at the outset. Another characteristic feature is that, aside from any ad hoc instances of crosssubsidisation by the gaming operator, the total amount returned to the entrants collectively as prize-money is necessarily less than the total amount received from the entrants collectively as entry fees or bets, due to the fees and charges of the operator as well as taxes and duties of governments and jurisdictional authorities, being deducted from the prize pool, prior to distribution. These fees and charges are significant, often in the order of 15% to 40% of the total prize pool, which is a particular disadvantage of this form of gaming activity, in so far as the participants are concerned.

ID-2- 0 Another broad category of gaming activity is "fixed-odds" based, usually referred to as wagering, which is typical of most types of sports betting and bookmaking operations.

O In this form, the odds of a particular outcome are predetermined by the operator when each bet is placed, so that the quantum of winnings is known at the outset, irrespective of the number of bets subsequently placed by other participants. In this case, the total ramount returned to the participants collectively as prize-money is not necessarily less 00 0than the total amount received from the entrants collectively as bets, and in that sense, the operator bears some risk. However, the operator endeavours, through experience, Ito retain a predetermined margin of profit on average over time, and this would N 10 typically be in the order of 8% to A further disadvantage with both of these forms, and indeed most other forms of gaming, is that in the absence of a winning outcome, the initial value of the bet or participation fee is lost to each participant and fundamentally, the odds are statistically weighted against the players.

Against this backdrop, it is well-known that some personality types fall victim to gaming at significant personal and wider social cost. Others are reluctant to participate in such activities at all, either as a matter of principle or due to inherent aversion to risk, and thereby miss the entertainment value and the opportunity to participate in the upside of winning outcomes.

It is an object of the present invention to overcome or ameliorate one or more of the disadvantages of the prior art, or at least to provide a useful alternative.

Disclosure of the Invention Accordingly, in a first aspect, the invention provides a method of gaming including the steps of: receiving entries and corresponding entry fees from multiple entrants in relation to a gaming activity having an unknown outcome; combining the entry fees into an entry fee pool; investing at least a proportion of the entry fee pool for a period of time to generate an investment return; designating at least a proportion of the investment return as a first component of a prize; 18.Dec. 2006 15:21 S h e Is ton I

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No. 0907 P. 8 Sc -3- 0 0 determining one or more winning outcomes of the gaming activity; cxl distributing the first component of the prize between one or more winning 0entrants corresponding to said winning outcomes, in accordance with a predetermined 00 outcome-based distribution protocol; and i refunding at least a proportion of the entry fees of at least some entrants in INO accordance with predetermined refund criteria.

r- The terms "gaming" and "gaming activity" as used herein are intended to be 0 interpreted broadly, encompassing any form of gambling, gaming, or wagering,.

including but not limited to:lotteries and lottery type games such as "Lotto", "Oz Lotto", "Powerball", and C',l the like; traditional draw lotteries, instant lotteries and "scratch" lotteries; "Keno", "Bingo" and "Housie" style games; sports betting activities and football pools; S events-based betting activities involving such outcomes as political contests, Royal or noteworthy births, weather outcomes and natural phenomena; a totalisators; a sweepstakes for any events such as horse, dog or any other form of racing, sporting contests, political contests and the like; PC-based and other electronic gaming contests, including online skill-based gaming contests; 0 other contests of skill or knowledge; 0 chance-based games played on poker and other electronic gaming machines; and any games of skill or chance involving one or more unknown outcomes, whether para-mutual or "fixed-odds" based.

A particular distinction is made, for the purpose of this specification, between gaming activities and investment activities. A gaming activity is an activity whereby a person obtains an entry for the primary purpose of participating in a game of chance or wagering on an event having an unknown outcome. An investment activity is an activity where a person makes an investment for the primary purpose of seeking a financial reward based on investment return criteria.

COMS ID No: SBMI-05700691 Received by IP Australia: Time 16:30 Date 2006-12-18 18. Dec. 2006 15:22 Shelston IP No. 0907 P. 9 S-3a- 0 Ci The terms "invest", "investing" and the like as used herein are similarly Sintended to be afforded a broad interpretation, including but not limited to investment 0 in any financial or real asset or property of any type whether securitised or otherwise, 00 with value denominated in any currency or combination of currencies, whether listed a public exchange or unlisted, including the following, as well as warrants, options,

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00 0 /0 0 ci COMS ID No: SBMI-05700691 Received by IP Australia: Time 16:30 Date 2006-12-18 O -4- 0 derivatives, deferred purchase contracts, instalment receipts and the like over any of the following:o deposits with third parties whether interest-bearing or otherwise and whether held with a financial institution or some other party; mortgages, debt instruments or securities of any type; -NO any form of American Depository Receipts or similar instruments or asset 00 0classes as may be available from time to time in any jurisdiction; S promissory notes, bills of exchange, convertible notes or any form of debt;

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S convertible or other bonds; S 10 0 preference shares, redeemable preference shares, stocks, equities or shares of any class whether fully or partly paid up; warrants, options, derivatives, deferred purchase contracts, instalment receipts and the like; options, warrants or similar instruments convertible into stocks, shares or equities of any sort; warrants, options, derivatives, deferred purchase contracts, instalment receipts or the like over any index relating to any matter including but not limited to stocks, shares or equities of any sort or futures or any financial instrument or financial asset; 0 currency or interest rate swap agreements, forward interest rate agreements and the like; real property or property of any other kind including intellectual property; any contract, arrangement or instrument of any type which confers a benefit of value in relation to an item or items of value; futures contracts and the like in relation to any thing, item or matter; currencies; precious metals; works of art and any other valuables such as stamps, coins or jewels; and any other form of investment offering at least the potential for return on capital over a period of time, whether or not the capital is guaranteed, and whether or not a return on capital is guaranteed.

IND Additionally, the terms "invest", "investing", "investment" and the like, as used herein, should be construed as including, but not limited to, the use of one or more O money management techniques to increase an available amount of funds and investing the resultant increased available amount of funds.

It should also be appreciated that the "investment return" need not be cash- Ibased or even financial in nature, provided merely that it has some intrinsic or

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0perceived value in the broad context of the gaming activity.

_The term "entry" is intended to be interpreted broadly in relation to Iparticipation across the full gamut of gaming and wagering activities as defined above, I 10 including but not limited to bets, wagers, entrance fees, participation fees, deposits and the like.

The term "pool" is also intended to be given the broadest possible interpretation, covering the physical pooling of bets, entry fees or other value components into a single deposit account or other investment product, as well as the virtual pooling of such components across multiple accounts or multiple investment products, whether those components are deposited simultaneously or at different times, and whether those components are invested over the same or different time frames.

The term "refund" as used herein is intended to encompass a full or partial refund of the value component of an entry, whether in the form in which it was contributed or in some other form. Refunds may therefore be in cash or in kind. In particular, in some embodiments of the invention, a refund may take the form of a limited rollover entry for a specified number of subsequent gaming activities of the same or different type, an unlimited rollover entry for an indeterminate number of subsequent gaming activities of the same or different type, or the maintenance of a limited rollover entry or an unlimited rollover entry from a previous gaming activity.

The term is also intended to encompass the option of a refund, in whatever form, whether or not that option is exercised at any particular point in time, or at all. Further, the term "refund" is intended to encompass the concept of a guaranteed prize, whether as an alternative to, or in addition to, a refund based on the value component of the entry itself. It is therefore possible that a refund in the context of particular gaming activities may exceed the full value component of the corresponding entry.

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The term "guaranteed" as used in connection with refunds is intended to be broadly construed, as applying whether the associated refund may or may not be O underwritten by the gaming operator, a financial institution or by some other party, and whether or not there may be some residual risk associated therewith.

The terms "taxes" and "duties" as used herein are intended to encompass any Irelevant Federal, State and/or local government taxes, duties or imposts as well as 0 levies or charges applied by intermediaries or other third parties connected with the gaming activity, that are essentially non-discretionary in so far as the gaming operators Ior players are concerned.

The terms "bonus entry", "bonus entries" and the like are intended to be broadly construed as encompassing both physical and virtual bonus entries, as well as any other physical or virtual mechanism, mathematical algorithm, software program, programming subroutine or any combination thereof that has an equivalent effect of increasing the chances, in some defined way, of a particular entrant winning the associated gaming activity, relative to those of one or more other entrants, or categories of entrants. A bonus entry may also provide the opportunity for a particular entrant to participate in a larger prize pool relative to one or more other entrants, on the basis of the same or different chances of winning.

References to the "option" of either a predetermined refund or a predetermined number of bonus entries should be understood, subject to the context, to encompass scenarios where such options are provided in a single entry wherein a proportion of the entry fee is refundable and a complementary proportion is at risk, (whether the relative proportions are predetermined by the gaming operator or nominated by the entrant), as well as scenarios where different types of entry are submitted according to whether the entry fee is refundable or at risk. In the latter scenario, it should be appreciated that the different types of entry may be submitted through the same or different entry terminals or points of sale without departing from the scope of the invention.

References to "predetermined proportion", "predetermined number" and the like should be understood to encompass any proportion ranging from 0% to 100%, inclusive. Such parameters may be predetermined by the gaming operator, the entrant or by a third-party.

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References to "entry fee pool", "investment pool" and "investment capital" are, subject to the context, used interchangeably.

O Preferably, the entries are in the form of bets. The value components are preferably monetary in nature, and more preferably, are cash-based. The investment return preferably takes the form of investment income, and the prize preferably takes IND the form of cash prize-money. It should be appreciated, however, that the bets, value 0- 0 components, investment returns and the prize may take a variety of other forms. For example, the prize may take the form of product from a sponsoring or operating entity.

shares, gift vouchers, lottery tickets, financial assets or other instruments or assets of 10 value. The prizes may also be distributed directly, or may alternatively be distributed to an intermediate holding entity, such as a guardian or trust, as may be appropriate in the case of minors.

In one preferred embodiment, the method includes the further the step of refunding to at least all non-winning entrants at least a proportion of their corresponding entry fees.

Preferably, the method includes the step of providing each entrant with the option of: a refund of at least a proportion of the corresponding entry fee; a limited rollover entry for a specified number of subsequent gaming activities; or an unlimited rollover entry for an indeterminate number of subsequent gaming activities.

Preferably, the method includes the step of returning to the entrants collectively a total value in prizes and refunds net of any operator contributions, that is at least equal in value to the entry fee pool net of any applicable taxes or duties, by combining at least a proportion of the entry fee pool with at least a proportion of the investment return.

Preferably, the gaming activity is a lottery style game, and the method in one preferred embodiment includes the step of providing each entrant at the conclusion of the gaming activity with the option of at least a full refund of their corresponding entry fees.

Preferably, the method includes the further steps of: I-8designating at least a proportion of the capital as a second component of the prize; and O distributing the second component of the prize on a predetermined basis between entrants whose entries correspond to winning outcomes of the gaming activity.

IIn one optional variation of this form of the invention, the guaranteed r- 0 0proportion of a bet is not refundable in the event that the associated entry corresponds _to one of the winning outcomes.

IPreferably, the second component of prize-money excludes from the capital the N, 10 guaranteed proportions of all of the bets having a guaranteed refund status.

In a preferred embodiment the method includes the step of returning a greater amount in total prize-money and refunds if applicable to the entrants collectively, than the total amount received from the entrants collectively as bets, by virtue of the investment income.

Preferably, the method includes the step of deducting any costs or commissions attributable to operators or administrators of the gaming activity exclusively from the investment income prior to designating the first component of prize-money, as distinct from deducting such costs or commissions from the investment capital.

In some implementations of the invention, a prize may be available to either all or a significant proportion of the entrants, in addition to the guaranteed refund status applicable to the initial bet or participation fee. It will be appreciated that distributing the prize pool among a greater proportion of entrants would correspondingly diminish the magnitude of the prize money available for distribution to some or all of the individual entrants. These parameters therefore need to be determined to provide appropriately attractive incentives for prospective entrants, having regard to the specific gaming activity and its commercial context.

In one particularly preferred form of the invention, the method includes the step of providing each entrant with the opportunity to choose between: participation on the basis that a predetermined proportion of the entry fee is refundable on the basis of predetermined refund criteria; and participation on the basis that a predetermined proportion of the entry fee is placed at risk in return for increased chances of a winning outcome.

14/11 /OG 14/11/06 1:00 SI-ELSTON IP 4 062e37999#7660N02 4 NO. 123 904 o -9preferably, the method includes the step of providing at least one hybrid entry 0 wherein a predetermined proportion of the corresponding entry fee is refundable, a In residual proportion of the entry foe is at risk, and the increased chances of winning are based on the residual proportion of the entry fee at risk.

INC 5 In one preferred embodiment, the chances of a winning outcome for each r- entrant are substantially in proportion to the contribution of that entrant' to the entry fee 00 o pool, or alternatively to the total prize pool, relative to that of other entrants.

Preferably also, the increased chances of a winning outcome are created by o issuing a predetermined number of bonus entries. Preferably, the increased number c-i 0 and magnitude of bonus bets are advised to the entrant when the corresponding bet is placed.

The predetermined mnber of bonus entries issued his preferably a whole number greater than or equal to a number N determined by the formula: N V IV Where: N Minimum number of bon-us entries issued to each entrant placing a proportion of an entry fee at risk; V Value of the proportion of the entry fee placed at risk; and 1v Actual or projected value of investment return after tax derived from investment of the entry fee.

The aim of this formula, in broad terms, is for the increased chances of a winning outcome for each entrant selecting to place a proportion of the entry fee at risk, achieved by virtue of the bonus entries submitted on behalf of each such entrant, to be at least in proportion with the increased contribution to the overall prize pool, relative to the prize pool contribution of other entrants with a lesser proportion of the entry fee at risk. In this regard, it will be appreciated that the individual contribution to the prize pool is preferably a combination of the proportion of the entry fee at risk together with the investment return derived ftrm the entry fee, so that the higher the COMS ID No: SBMI-05352197 Received by IP Australia: Time 17:58 Date 2006-11-14

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proportion of the entry fee that is placed at risk, the greater the contribution to the total o prize pool.

O This aspect of the invention in effect offers the entrants a uniquely flexible trade-off between the risk of losing the capital value of their bets and the probability of winning a return on that capital in the form of prize-money.

N In one optional implementation of the invention, the method includes the r"- 0 0further steps of applying at least a proportion of the bets without guaranteed refund _status to fund interest or other financing expenses on a significantly larger amount of Iborrowed funds, and deploying at least a proportion of those borrowed funds to place the bonus bets on behalf of the respective entrants. These steps are preferably undertaken by the game operator, without any direct involvement from the entrants and without exposing the entrants to any liability in respect of the borrowed funds. This mechanism thereby allows those entrants who are willing to forego the guaranteed refund status of their bets to substantially leverage or multiply their level of participation in the gaming activity, without assuming liability in connection with the borrowed funds.

In one preferred form of the invention, each bet is categorised as either 100% guaranteed refund status, or 100% at risk status, at the option of the entrant. In alternative forms, however, each bet may be selectively apportioned between these categories, either in predetermined proportions set by the gaming operator, or flexibly as determined by the participant.

Preferably, the method includes the further step of providing the option of placing a recurring or "rollover" bet in relation to recurring gaming activities, whereby the bet is effective for the current gaming activity and for a predetermined number, or alternatively for an unlimited number, of subsequent gaming activities of corresponding type, unless and until the entrant wins a prize. In one preferred form, a recurring or rollover bet may be designated with a guaranteed refund status, whereby the bet is redeemable at full cost or other predetermined value at any time and in any relevant gaming activity in the event of a non-winning outcome.

A particularly preferred form of the recurring bet option provided by the method of the invention incorporates an unlimited or "perpetual" rollover bet option, again in respect of recurring gaming activities, whereby the bet is effective for the 4S) -11current gaming activity and for an indefinite number of subsequent gaming activities of corresponding type, unless and until the entrant: O elects to redeem the bet at full cost or other predetermined value at any time after the outcome of the first relevant gaming activity; or the gaming activity ceases to operate in which case, again, the bet is IN redeemable at full cost or other predetermined value.

r0 0 In one optional modification of this form of the invention, the recurring bet also _ceases to be effective if and when the entrant wins a prize.

IIn another preferred variation, the method of the invention provides a mechanism for dealing with unclaimed prize money, whereby such money is effectively put back into a subsequent game or games, in the form of supplementary guaranteed return entries on behalf of the winning player. In this way, the capital amount of the original winnings is preserved indefinitely and is available to be redeemed by the winning player, should that player appear at a later time to claim the prize. In the meantime, the re-investment of those winnings through the supplementary entries generates additional investment income, and hence additional prize-money, for distribution as winnings in future games. In this way, any unclaimed prize money is employed primarily for the benefit of the players, as distinct from the gaming operator.

An alternative preferred embodiment provides another option for dealing with unclaimed prize money whereby such money is deposited into an account specifically established to receive such funds. Optionally, some or all of the investment returns generated by the unclaimed prize money account may be added to the prize pool for distribution in subsequent games.

In another preferred form, the gaming method is adapted for use in connection with fixed-odds betting. In one preferred implementation of this form of the invention, the nominal fixed-odds are effectively escalated or enhanced for winning bets, by distribution of the investment income as supplementary prize-money. In an alternative implementation, the entrant placing a fixed-odds bet receives a complimentary sweepstakes ticket, conferring an entitlement to supplementary prize-money drawn from the investment income, in the event of a winning outcome.

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In a further preferred form, the method is adapted to combine fixed-odds betting in respect of a particular outcome of the gaming activity, with entries of O guaranteed refund status in a sweepstake in respect of other outcomes of the same gaming activity. By effectively combining the invention with aspects of both fixedodds and para mutual betting, this method provides a unique mechanism whereby Ientrants may either "hedge" their fixed-odds bets against losses, and/or enhance the r- 0potential returns from a fixed-odds bet.

In a second aspect, the invention provides a system for implementing the Imethod of gaming as previously defined, said system including: a computer processor for receiving inputs from a plurality of computerised terminals adapted to receive entries and associated value components from multiple entrants in relation to a gaming activity having an unknown outcome; a computer processor adapted to combine the value components to create a pool of investment capital; a computer processor adapted to invest at least a proportion of the investment capital for a period of time to create an investment return according to predetermined criteria; a computer processor adapted to designate at least a proportion of the investment return as a first component of a prize according to predetermined criteria; and a computer processor adapted to allocate the first component of the prize between entrants in accordance with a predetermined outcome-based distribution protocol, whereby winning entries correspond to winning outcomes of the gaming activity.

It will be appreciated that the computer processors as defined may be constituted as a single composite processor such as a central server or as separate and discrete processing units and in the latter case, the discrete processing units may be substantially co-located, or disposed at different locations. Preferably, one or more of these processors, or additional processors if required, are used to implement one or more of the various additional steps of the gaming method, as previously defined.

21. Dec. 2006 8:22 Seso PN.34 .31 S h e I s t o n I P No.0943 P. 3/11 INO -13- CA The terminals are Preferably connected to the processor or processors by means of a network, such as a local area network CLAN), a wide area network (WAN), a wired 0 or wireless teleconmmunications network, the Internet or successor networks.

Preferably, one or more of the computer processors are communicatively connectable to a financial services computer system associated with a financial services INO provider. In one preferred embodiment, the connectable computer processor is adapted 0 0 computer system. In a particularly preferred embodiment, the connectable processor is 8 10 adapted to: receive said inputs over a predetermined time period; extract from each of the inputs corresponding individual betting amounts; perform a running summation of said individual betting amounts so as to calculate an investment pool amount as received within said time period; and at or near the conclusion of said time period, to communicate said investment pool amount to the financial services computer system.

Preferably, the predetermined time period corresponds to a minimum period of time over which the financial services provider calculates the investment income.

Advantageously, by providing the option of bets with a guaranteed refhnd status, the gaming method and system of the invention allow a mingling, within the same gaming activity, of traditional participants who are prepared to lose their bets for the sake of potentially higher winnings, and those who, due to inherent risk aversion or for other reasons, would traditionally not have been prepared to lose betting or investment capital in gaming activities and so would have tended to avoid or at least minimise their exposure to such activities.

According to a fbrther aspect, there is provided a system for conducting gaming& the system including: an interface for receiving data indicative of entries and corresponding entry fees from multiple entrants in relation to a gaming activity having an unknown outcome; a first processor that is responsive to the first interface for combining the entry fees into an entry fee pool; COMS ID No: SBMI-05735920 Received by IP Australia: Time (I-tm) 09:33 Date 2006-12-21 22. Dec. 2006 8:23 Sh to IPN. 94 P. /1 S h e I s t o n I P No. 0943 P. 4/11 INO 13a Cl a second interface for providing a signal indicative of an instruction to invest at least a proportion of the entry fee pool for a period of time to generate an investment 0 return; Cl a third interface for receiving data indicative of the investment return; a second processor for designating at least a proportion of the investment return INO as a first component of' a prize; 0c a third processor for determining one or more winning outcomes of the gaming o activity; INO a fifth processor that is responsive to the third processor for determining how to distribute the first component of the prize between one or more winning entrants Cl corresponding to said winning outcomes, in accordance with a predetermined outcomebased distribution protocol; a fourth processor that is responsive to the third processor for determining how to distribute refunds of at least a proportion of the entry fees of at least sonic entrants in accordance wit predetennined refund criteria; and a fourth interface that is responsive to the fourth processor and the fifth processor for providing a signal indicative of instructions for distributing the first component of the prize and the reflmds.

It will be appreciated that although multiple processors are described and/or defined, these may be embodied in a single comnmon processor.

Brief Description of the Drawings Preferred embodiments of the invention will now be described, by way of example only, with reference to the accompanying drawings in which: Figure 1 is a schematic representation of a gaming system according to a first embodiment of the present invention; Figure 2 is a schematic illustration of an implementation of the system of Figure SBMI-05735920 Received by IP Australia: Time 09:33 Date 2006-12-21 IND -14- 0 O Figure 3 is a flowchart illustrating a gaming method according to another embodiment of the present invention; O Figure 4 is a flowchart illustrating a gaming method according to another embodiment of the present invention; and Figure 5 is a schematic representation of computer systems involved in a Ifurther embodiment of the invention.

00 _Preferred Embodiments of the Invention IFigure 1 schematically illustrates a gaming administration system 1, according S 10 to a first embodiment of the invention. The system 1 receives entries 2 from a plurality of entrants, who are also referred to in this document as players 3. Each entry has an associated value component, which in this embodiment is typically a cash-based monetary component in the form of an entry fee or bet. In this embodiment, the entries relate to a modified para-mutual type gaming activity having an unknown outcome, such as a lottery, or totalisator. The system combines the monetary components to provide an investment capital pool 5. The funds in the capital pool 5 are divided into an investment capital portion 6 and a non-investment capital portion 7. Determining the split between the investment and non-investment capital portions 6 and 7 is primarily an exercise in risk management undertaken by the operators of the gaming activity. In some embodiments, all of the funds received and accumulated in the capital pool are invested, such that the monetary value of the capital pool corresponds to the monetary value of the investment capital portion 6.

The investment capital 6 is then invested through an investment vehicle 8 for a period of time, which period may be predetermined or subject to predetermined criteria. This investment generates an investment return, in the form of investment income 9. A portion of this investment income is designated as a first component of a prize. In response to the outcome of the gaming activity, this first component is distributed between one or more of the players in accordance with a predetermined outcome-based distribution protocol.

More specifically, at the end of the predetermined investment period, the investment capital 6 and investment income 9 are withdrawn from the investment vehicle. The gaming administrator's fees and commissions 10 and any investment costs 11 are then deducted from the investment income 9, to determine the net investment income, which forms a prize portion 12 of the investment income. The O prize portion 12 of the investment income is then added to a prize pool 13, together with the respective investment capital and non-investment capital portions 6 and 7.

Once the outcome of the gaming activity is known, or at a subsequent predetermined IDtime, the prize pool 13 is distributed between the winning players (if any) in 00 0 accordance with the predetermined outcome-based distribution protocol.

_The fees, commissions and investment costs are preferably structured so that they are less in totality than the investment income, and consequently, the prize pool 10 13 has a total monetary value which is at least equal to, and is more preferably greater than, the initial capital pool 5, by an amount corresponding to the net investment income. This assumes a positive return on investment, which can effectively be guaranteed by the operator if desired, for example through fixed-interest bearing deposits with secure financial institutions, or otherwise hedged against loss. This feature is a particularly advantageous and attractive outcome from the players' perspective by contrast with traditional para-mutual type gaming systems, in which thc prize pool available for distribution to players collectively is inherently of lesser value than the total amount received from the players collectively as bets.

A more specific implementation of the embodiment of the invention represented in figure 1 is illustrated in figure 2, wherein corresponding features are denoted by corresponding reference numerals. In this example, the system is implemented to allow sport-based betting and entries 2 take the form of bets placed in respect of sporting events. To commence, a player 3 selects and places a bet using a terminal 20. Each bet is typically indicative of the following components.

A sportingfixture, such as a game of football between Team A and Team B on a set date.

S A win-condition for that sporting fixture. For example, "Team A beats Team or "Player X of Team A performs activity A win-condition is typically accompanied by odds which define the potential benefit for a player should that win-condition be realised in practice. A bet is "won" if the win condition is realised, or "lost" if the win condition is not realised.

IND -16- 0 A monetary component. This is paid in cash (physically or electronically) by each player when placing a bet, and the monetary component is automatically 0 transferred into an account maintained for the purposes of operating the gaming system.

To place a bet, the player selects a sporting fixture, win-condition and IND monetary component, and subsequently completes a cash transaction to finalise the r0 0placement of the bet. The player is then provided with a receipt confirming the details of the bet placed. In some implementations, each player uses a terminal 20 provided in 0a gaming venue, such as a casino, a hotel or the like. Alternatively, computer S 10 terminals may be used over a LAN, WAN or the Internet.

The monetary components of all bets placed in respect of a particular fixture or gaming activity are combined to form a pool of investment capital 5 for that fixture.

The capital pool 5 holds these funds in a notional sense only, since typically upon each bet being placed, the corresponding investment capital portion is invested substantially immediately. By this means, the predetermined investment period is defined by a set endpoint and the investment capital pool is continually added to as bets are progressively placed up until a bet-placement deadline, such as the start of the relevant sporting event.

At the end of the predetermined investment period, the total available funds arc withdrawn from the investment vehicle 8. Assuming the investment did not result in a loss (an assumption generally applied throughout this disclosure on the basis previously indicated) the funds withdrawn are defined by a combination of the investment capital 6 of the capital pool 5 and the investment income 9.

The system administrator uses investment as a primary, and ideally as a sole, form of revenue generation, rather than gaming per se. To this end, the administrator's fees and commissions 10 are deducted from the investment income 9, as are the investment costs 11. Typically, the administrator's commission is a predetermined percentage of the investment income, although in other embodiments, a flat-rate-perentry calculation or some other charging regime, may be applied. What remains following the withdrawal of the cost components 10 and 11 defines the prize portion 12 of the investment income, which is added to the prize pool 13, together with the IND -17-

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investment capital 6 (and any non-investment capital 7 if relevant) for distribution as prize money.

O Once the outcome of the relevant event or fixture is known, the system is responsive to the outcome, the respective win-conditions of the bets placed, and the total value of funds in the final prize pool 13, to determine how those funds should be Idistributed amongst the players, in accordance with the predetermined distribution 0- 0protocol defined in respect of that gaming activity. Each player then either receives a winning amount, or a losing amount. The losing amount might be zero.

IFinally, following completion of the event, or at a later date as predetermined by the operator, each player presents a bet receipt in an electronic or other form as appropriate to a terminal 20, to redeem any funds that may have been won.

Figure 3 illustrates a further embodiment of the invention, where again corresponding features are denoted by corresponding reference numerals. In this variation, each player is provided with the option of either a guaranteed return or an increased win probability.

Where the former option is selected, a guaranteed return entry 21 is submitted and the corresponding monetary value is placed in a capital pool 5. The size of the capital pool is then increased over time through investment, in the manner previously described in relation to figures 1 and 2. When the result of the game, event or fixture is determined, in the event of a non-winning outcome for a particular player, a losing amount 23 is received. The losing amount preferably corresponds to the monetary value of the bet initially placed, but may alternatively have some other predetermined relative or absolute value.

In some embodiments of the invention the losing amount 23 received by the holder of a guaranteed return entry 21 is equal to the initial purchase cost of the entry.

Hence, in such embodiments it is possible for a player to purchase an entry without being subject to the risk of ultimately losing the initial purchase cost.

If a player alternatively prefers to participate in the game on the basis of an increased win probability, a non-guaranteed return entry 25 is submitted. The corresponding monetary value is again placed in a capital pool 5 but in this case, at least a proportion of the non-guaranteed capital pool is used to meet the interest cost on additional funds borrowed by the operator or administrator of the game. The borrowed D-18-

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funds are significantly larger in magnitude than the value of the initial entry or bet, which is possible because the monetary value of the initial bet is merely required to O fund the interest cost on the borrowings, over a relatively short period of time, which allows a significant "gearing ratio". Any residual portion of the non-guaranteed capital pool not used to fund interest on additional borrowings is preferably invested, to Igenerate additional prize money.

00 0The borrowed funds are then used to provide a significant number of bonus _entries 26 into the game, which are submitted automatically by the gaming operator on Ibehalf of that player. The number and magnitude of such bonus entries are preferably S 10 advised to the player when the initial entry is submitted, although subsequent notification protocols are also envisaged.

When the result of the game is determined, in the case of a non-winning outcome in respect of a non-guaranteed return entry, the player receives nothing. In the event of a winning outcome, the player receives prize money in accordance with the predetermined distribution protocol. However, by virtue of the bonus entries, both the probability of a winning outcome and, potentially, the magnitude of the winnings are significantly enhanced, in comparison with a guaranteed return entry of corresponding monetary value.

Variations of this embodiment are also envisaged, where a proportion of the monetary value of an entry may be designated with a guaranteed refund status, and a complementary or residual proportion of the same entry may be designated to be at risk, in return for bonus entries and a higher relative probability of a winning outcome.

Figure 4 illustrates another embodiment of the invention, which provides the option of placing a recurring bet in relation to a recurring gaming activity, such as a lottery. Referring to the drawing, where corresponding features are again denoted by corresponding reference numerals, each player initially submits a recurring entry with a corresponding monetary value. The monetary amounts from multiple bets are then combined to form a capital pool. From the pool, an investment capital portion, which may comprise the entirety of the capital pool, is invested to generate investment income net of commissions, fees and charges, in essentially the same manner as previously described.

-19- Once the outcome of the gaming event has been determined, and any subsequent time period has elapsed as predetermined by the operator, the investment 0 capital and net investment income are withdrawn and if relevant, combined with any non-investment capital from the initial capital pool, to create an expanded prize pool.

If a player's entry corresponds to a winning outcome according to the predetermined ID outcome-based distribution protocol applicable to the gaming activity, the player r"- 0 0receives a portion of the prize pool, in accordance with that distribution protocol. In _the event of a non-winning outcome, the player may optionally request a refund of the Imonetary amount corresponding to the initial entry, or an otherwise predetermined amount, in which case the player receives that amount. However, in the event that the player does not request such a refund, a new entry of the same or an otherwise predetermined monetary value is automatically generated and submitted to the next recurrence of the corresponding gaming activity.

Thus, this embodiment of the invention can be used to provide a perpetual bet option in respect of a recurring gaming activity, whereby the bet is effective for the current gaming activity and for an indefinite number of subsequent gaming activities of corresponding type, unless and until the entrant either elects to redeem the bet at full cost or other predetermined value at any time after the outcome of the first relevant gaming activity, or alternatively, the gaming activity ceases to operate in which case, again, the bet is redeemable at full cost or other predetermined value. In one particular optional variation, the recurring bet ceases to be effective if and when the entrant wins a prize.

In further variations of the perpetual bet model as described, the entrant, or alternatively the operator, may specify that an entry will be valid for a specific number of games, or for a specific time period. For example, the player, or alternatively the operator, might specify that a particular entry, or type of entry, is valid for 52 consecutive weekly games, and so would be effectively valid for a 12-month period, unless redeemed in the interim.

Figure 5 provides a schematic representation of computer systems involved in a further embodiment of the invention. It will be appreciated that this embodiment is generally applicable to various gaming and other applications either individually or in combination.

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A gaming system 81 is described with reference to a plurality of discrete processors. These processors are functionally described, and are in practice typically O embodied in one or more central servers or networked computer systems.

An entry management processor 82 receives data indicative of entires from a plurality of remote terminals 83. Players use these terminals 83 to place entries. For IC example, gaming entrants place bets, and investment entrants place deposits. The 0- 0terminals 83 are typically geographically separated and defined by the likes of self- _serve consoles, operator consoles, phone-based interaction management systems, Iapplications running on personal computers, and so on. The consoles provide data to N 10 the entry management processor 82 by a remote link such as a LAN, wireless LAN, WAN, cellular network, RF link, internet connection, satellite link or similar. Often a combination of these communication means is used. The entry management processor 82 receives the entries and updates a database with data indicative of the entries, and also arranges for the monetary components of each entry to be transferred to a pool management processor 84.

The pool management processor 84 is responsible for receiving and verifying funds, and subsequently making high-level investment decisions. These decisions typically relate to quantum of capital to be invested, and investment terms. Data indicative of the decision made is passed to an investment order processor 85, which provides an investment order to a financial services system 86. This data is typically provided in a format electronically recognisable to the financial services system 86 and indicative of high-level investment instructions such as investment category, quantum and term. In some embodiments an administrator of the gaming system 81 liases with an administrator of the financial services system 86 to establish a plurality of investment types of varying risk levels and return prospects, and the investment order processor 85 identifies one or more of these investment types when providing an order.

The investment order processor 85 is also responsible for electronically transferring investment funds to the financial services system 86.

The financial services system includes a customer interface processor 87 for interacting with the gaming system 81. This processor receives from the order processor 85 investment orders and investment funds, and passes these to an investment management server 88. That server is responsible for undertaking the IN -21-

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actual investment activity using one or more of a plurality of available investment sources 89. Upon the completion of investment, the customer interface server 87 O returns the invested funds and investment income to an investment receipt processor in system 81. These funds are analysed and broken up into components by an income management processor 91. This includes the separation of administrator Icommissions and other costs from the investment income that was generated.

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0Once the outcome of an event is known, an outcome analysis processor 92 _determines one or more winners from the initial entrants. Data indicative of these winners, along with the amounts won, is passed to a distribution management N 10 processor 93. That processor is responsible for administering the distribution of winnings to the entrants, typically via real-time communications with the terminals 83.

Traditional gaming activities necessarily involve the customer or player putting their money at risk of loss. The present invention, at least in some of its preferred forms, modifies the traditional ways of operating such activities to give players the option of risk-free participation while retaining the opportunity to win prizes, potentially alongside more risky though still modified participation by other players.

Traditional gaming activities, by definition, involve putting money or valuables at risk, and to that extent the present invention, at least in some preferred embodiments, does not resemble the operation of traditional gaming activities. Rather, it modifies traditional gaming and even investing operations and consequently is able to present the customers or players with new products of a risk-free nature, or with altered risk/chance characteristics, to produce new outcomes that have not hitherto been available. In these and many other respects, the invention represents a practical and commercially significant improvement over the prior art.

Although the invention has been described with reference to specific examples, it will be appreciated by those skilled in the art that the invention may be embodied in many other forms.

Claims (1)

1. 21. Dec. 2006 8:23 Seso PN.34 .51 S h e I s t o n I P No.0943 P. 5/11 o -22- (N THE CLAIMS DEFINING THE INVENTION ARE AS FOLLOWS: 01. A system for conducting gaming, the systemn including: an interface for receiving data indicative of entries and corresponding entry fees from multiple entrants in relation to a gaming activity having an unknown outcome; INO 5 a firs t processor that is responsive to the first interface for combining the entry r- fees into an entry fee pool; 00 o a second interface for providing a signal indicative of an instruction to invest at least a proportion of the entry fee pool for a period of time to generate an investment O return; a third interface for receiving data indicative of the investment return; a second processor for designating at least a proportion of the investment return as a first component of a prize; a third processor for deternnining one or more winning outcomes of the gaming activity; a fourth procesor that is responsive to the third processor fir determining how to distribute the first component of the prize between one or more winning entrants corresponding to said winning outcomes, in accordance with a predetermined outcome- based distribution protocol; a fifii processor that is responsive to the third processor for determining how to distribute refunds of at least a proportion of the entry fees of at least some entrants in accordance with predetermined refimnd criteria; and a fourth interface that is responsive to the fourth processor and the fifth processor for providing a signal indicative of instructions for distributing the first component of the prize and the refunds. 2. A system according to clam 1 wherein at least all non-winning entrants are refunded a proportion of their corresponding entry fees. 3. A system according to claim 1 or claim 2, wherein each entry is designated by the entrant to be eligible for at least one of the following: a refund of at least a proportion of the corresponding entry fee; a limited rollover entry for a specified number of subsequent gaming activities; or COMS ID No: SBMI-05735920 Received by IP Australia: Time 09:33 Date 2006-12-21 21. Dec. 2006 8:23 Sheiston IP No. 0943 P. 6/11 ID-23-- 0 ci an unlimited rollover entry for an indeterminate number of subsequent gaming activities. 4. A system according to any one of the preceding claims wherein a total value in c-I prizes and refunds is designated for return to the entrants collectively, this total value being net of any operator contributions, that is at least equal in value to the entry fee pool net of any applicable taxes or duties, by combining at least a proportion of the entry 00 ofee pool with at least a proportion of the investment return. S. A system according to any one of the preceding claims, wherein the gaming oactivity is a lottery style game, and wherein each entrant is provided at the conclusion of the gaming activity with the option of at least a full refund of their corresponding entry fees. COMS ID No: SBMI-05735920 Received by IP Australia: Time 09:33 Date 2006-12-21