The purpose of this White Paper is to elaborate on:
- The people behind the Parimutuel Wagering concept;
- The potential for Government revenue creation; and,
- The Lottery industry’s shift to technology and fun.
This white paper will show how the gaming industry can potentially become more transparent, as compared to gaming industry’s current state. Among other things, this white paper will also demonstrate the potential long-term benefits of Parimutuel Event Wagering and the revolutionary impact it can have on gambling as a whole.
1 – Executive Summary Parimutuel Group
Parimutuel Group has been in existence for six years. Parimutuel wagering has been in existence since the late 1800’s. Our system provides a risk free option to the operator, and the best odds payouts to the handicapper. Our system addresses concerns raised by gamers, who believe that they are being manipulated and defrauded by unregulated foreign corporations, illegal bookies, and unethical offshore corporations.
Parimutuel Group provides parimutuel style wagering on a wide range of competitive tournaments, events, contests and activities, all of which have a large number of entrants and are regulated.
Parimutuel Group’s innovative wagering system can easily be adapted by existing state lotteries, thereby providing added revenues to local, state and federal governments. The system’s ground-breaking entertainment value will attract both foreign and domestic players.
Parimutuel Group’s technology allows players to place bets on top-ranked individuals entered worldwide in an event, tournament, activity or contest, such as: poker tournaments (e.g., The World Series of Poker), pocket billiard tournaments, automotive races, golf tournaments, tennis tournaments, soccer tournaments (e.g., The World Cup), motorcycle races, and many other competitive events.
Contact us if you have any questions:
Harry B. Platis
Attorney at Law
16300 Mill Creek Road #105
Mill Creek, WA 98012
cell phone: 206-999-6655
340 E. Warm Springs Road #B-9
Las Vegas, Nevada 89119
2 – Introduction (Overview of Internet Gambling)
According to the statutes of the U. S. Federal Government and many U.S. states, gambling is defined as, risking something of value upon the outcome of a contest of chance.
The latest U.S. Federal legislation on September 30, 2006 — H.R.4411 the Internet Gambling Enforcement Act of 2006 Sec. 5362 defines illegal betting or wagering as the purchase of a chance or opportunity to win a lottery or other prize (which opportunity to win is predominantly subject to chance).
This Federal legislation includes a specific allowance for online competitions–betting on games of skill, such as the competitions offered by Parimutuel Lottery, to continue in the states where they have always been legal.
In 2005, millions of U.S. residents went online to bet more than $4 billion on casino games, sporting contests and Lottery. Despite the official hostility of the federal government and most state governments, Internet gambling among U.S. residents continues to grow at a rate of more than 20 percent a year. Most online gambling businesses now operate from obscure jurisdictions such as Antigua, the Kahnawake Mohawk Nation of Canada, or Alderney (an island in the English Channel), and in the United Kingdom.
Although federal and state governments insist that online gambling is illegal, in reality it is thriving.
3 – What is Parimutuel Lottery Wagering?
Parimutuel Lottery online ticket purchasing is a system that coordinates a lottery event using a virtual Web server with an administration application and a server database. The administration application is executable code which can generate a first event page from an event category page. The administration application also has a player management page, a pool page and a ticket management set of pages. The administration application interoperates with a banking application and a casino application (on the floor of any casino or any gaming area). The administration application will send the event information to the casino application, coordinate wager amounts with the banking application, close the wagering, monitor the event, update pool, close pool, and allocate the winnings and losses.
In simple terms online parimutuel lottery tickets relates to the formation of pools of tickets on an online lottery that are very similar to current land based lottery offerings wherein the winners of each individual pool are paid out of that pool (net of administrative costs and taxes).
Parimutuel betting (from the French: Pari Mutuel or mutual betting) is a betting system in which all bets of a particular type are placed together in a pool; taxes and the “house-take” or “vig” are removed, and payoff odds are calculated by sharing the pool among all winning bets. In some countries it is known as the Tote after the totalisator which calculates and displays bets already made.
The parimutuel system is used in gambling on horse racing, greyhound racing, jai alai, and all sporting events of relatively short duration in which participants finish in a ranked order. A modified parimutuel system is also used in some lottery games.
Parimutuel betting differs from fixed-odds betting in that the final payout is not determined until the pool is closed – in fixed odds betting, the payout is agreed at the time the bet is sold.
Parimutuel gambling is frequently state-regulated, and offered in many places where gambling is otherwise illegal. Parimutuel gambling is often also offered at “off track” facilities, where players may bet on the events without actually being present to observe them in person.
The patented parimutuel wagering system uses a pure parimutuel pool in order to cover bets on an event, activity, contest, tournament, or lottery.
4 – Parimutuel Lottery Wagering Is Legal
According to the Federal Lottery Law, it is illegal to operate a lottery through the mail or over the telephone. A lottery exists when you must pay for a chance to win a prize. The prize could range from money to jewelry or a new car. The chance means an opportunity to win, such as a drawing or a matching lucky number. Consideration means some sort of payment by you. If all three elements of payment, chance, and prize are present, it’s a lottery. Federal statutes prohibit, among other things, the mailing or transportation in interstate or foreign commerce of promotions for lotteries or the sending of lottery tickets themselves.
States enact their own laws regulating lotteries, which are usually delegated to a special lottery board or commission to administer. Such lottery divisions will select and license retailers, train employees of retailers to use lottery terminals, sell tickets, and redeem winning tickets, assist retailers in promoting lottery games, pay high-tier prizes to players, and ensure that retailers and players comply with the lottery law and rules. Each state has its own laws governing exemptions, such as lotteries by charitable, non-profit and church organizations.
The Federal Trade Commission’s (FTC) Telemarketing Sales Rule requires telemarketers to make certain disclosures and prohibits misrepresentations. It gives you the power to stop unwanted telemarketing calls and gives state law enforcement officers the authority to prosecute fraudulent telemarketers who operate across state lines.
The rule covers most types of telemarketing calls to consumers, including calls to pitch goods, services, “sweepstakes,” prize promotions and investment opportunities. It also applies to calls consumers make in response to postcards or other materials received in the mail.
The following is an example of a Federal Statute defining Lottery:
According to 12 USCS § 25(a), “lottery” includes any arrangement whereby three or more persons (the “participants”) advance money or credit to another in exchange for the possibility or expectation that one or more but not all of the participants (the “winners”) will receive by reason of their advances more than the amounts they have advanced, the identity of the winners being determined by any means which includes:
(A) A random selection;
(B) A game, race, or contest; or
(C) Any record or tabulation of the result of one or more events in which any participant has no interest except for its bearing upon the possibility that he may become a winner.
Where are the lottery tickets sold?
Lottery tickets are sold at more than 240,000 locations throughout North America. Most of these locations are conventional retail outlets such as convenience stores, gas stations, and supermarkets.
How is it decided who gets to sell tickets?
State and provincial laws set minimum standards to sell lottery tickets based on financial soundness and integrity. Generally, any retailer meeting these standards will be permitted to sell lottery tickets.
How much do these retail outlets make?
Retailers are paid a commission on every ticket they sell. These commissions vary from jurisdiction to jurisdiction, but typically range from 5 percent to 8 percent depending on the specific product being sold. Retailers are also commonly compensated for cashing winning tickets, awarded bonuses when they sell a ticket which wins a major prize, or rewarded for exceeding sales goals. Retailers typically pay a license fee, and in some cases other costs relating to the sale of lottery tickets. These costs also vary from jurisdiction to jurisdiction.
I don’t live in a state with a lottery. How can I buy a ticket?
You must travel to a state or province with a lottery and buy the ticket there. Lottery tickets cannot legally be sold by mail, telephone, or in any other type of interstate commerce.
Can lottery employees play the lottery?
Usually, no, although laws do vary from place to place. In most cases the employee’s immediate family and employees of lottery suppliers are also not allowed to play. In practice, there is no way that employees could alter the outcome of a game in their favor, but lottery officials generally believe that public confidence would be damaged should an employee win a large prize.
In 2013 have you ever been to a racetrack and bet on a horse to win a race? Betting on parimutuel horse racing events is legal in America. In California they go so far as to show races on television so that you can watch the race you just bet on over the Internet – yes betting on horse races over the Internet is 100% legal.
Our patented technology is in line with all parimutuel wagering from horses to greyhound dogs, and everything in between. This patented parimutuel wagering system was developed for use in any parimutuel event, such as, horse races, greyhound dogs, Jai Alai, and lottery draws.
Our parimutuel wagering system can be used on any contest, activity, event, competitive tournament, or lottery.
Who regulates lotteries?
Lotteries are regulated by their state or provincial governments. Federal regulation in the U.S. is limited to interstate distribution of tickets and interstate advertising.
Can state governments be trusted to regulate lotteries when they benefit from the lottery proceeds?
State regulatory proceedings are much more open and accessible to the public than the workings of federal regulatory agencies. All lottery board meetings are public, as are all legislative hearings. Lottery files are public records, subject at any time to media scrutiny. Lottery opponents in a legislature can examine the smallest lottery details and vote on lottery business operations. (In what other business would those opposed to the business’ existence be permitted a vote on business operations?) And if the public does not approve of the way a lottery is run, they have recourse to the ballot box and the ultimate sanction of refusing to buy tickets. Those who claim that lotteries are not regulated are really complaining that the regulators have made decisions they don’t agree with.
If the states cannot be trusted to regulate lotteries because they make a relatively small amount of money on them (an average of 1/2 of 1 percent of the state budget) it follows that they should not be allowed to make their own tax policy as well.
Parimutuel Wagering Revenue Projections
Worldwide estimates for online lottery ticket demand are based on the current estimated lottery ticket sales in the US (over $65.5 billion for 2012 alone). The World may be in an economic slump but the lottery market is booming, and there are no signs of slowing down, with worldwide lottery ticket sales in excess of $284 billion dollars in 2012.
Lotteries worldwide forge ahead in 2012; Q1/2012 sales up 13.4% globally compared to Q1/2011.
Shrugging off the ongoing financial crisis in Europe, major world lottery markets kept up the strong growth in global lottery sales seen at the end of 2011. Africa, Asia Pacific, Latin America, and North America all witnessed first-quarter-on-first-quarter increases in sales of more than 10% over the corresponding period in 2011.
Asia Pacific lotteries participating in the Quarterly Sales Indicator enjoyed a remarkable 27.9% increase in sales in the first quarter of 2012, as against the first quarter of 2011. The increase in sales in Asia Pacific was driven yet again by the participating mainland Chinese lotteries, which collectively witnessed an increase in sales of 30.1% for the first three months of 2012 over the first three months of 2011. Sales in Asia Pacific were further boosted by the performance of the Japanese lottery, which recorded an increase in sales of 52.6% for the first three months of 2012 over the first three months of 2011. The massive increase in sales at the Japanese lottery was due in part to a second special all-Japan reconstruction lottery for the Great East Japan Earthquake of 2011.
Participating lotteries in North America also witnessed a strong surge in sales, with a first-quarter-on-first-quarter increase in sales for 2012 of 16.3% over the corresponding period of 2011. The increase in North American sales was driven largely by the two block games, Powerball and Mega-millions. For its part, Powerball saw its price point increase from USD 1 to USD 2, as part of a revamp of the game in answer to calls for bigger jackpots and more chances to win. On the other hand, Mega-millions saw a historic USD 640 million jackpot that led to unprecedented scenes around the U.S., as players queued for a chance to participate in the biggest lottery jackpot in U.S. history. As a result of these block game developments, several U.S. lotteries enjoyed their best ever first quarters.
In Latin America, sales among participating lotteries also continued their steady rise, with an increase in sales of 11% recorded for the period January–March 2012 over the period January–March 2011. Once again, growth in the Latin American region was driven by Argentina’s Lotería Nacional Sociedad del Estado, which enjoyed a first-quarter increase in sales in 2012 of 11.2% over the corresponding period in 2011. Brazil’s Caixa also contributed to the region’s strong showing, with a first-quarter increase in sales in 2012 of 11.9% over the same time frame in 2011.
Participating African lotteries also performed robustly, but here the picture was more nuanced. In the first three months of 2012, participating African lotteries recorded an increase in sales of 14.5%, as against the first three months of 2011. This continued the momentum of the last quarter of 2011, where an increase in sales of 9.6% for the October–December period of 2011 was recorded against the corresponding three months of 2010. This reversed the trend of the third quarter of 2011, where disappointing sales were largely responsible for the full-year-on-full-year decrease in sales of -0.5% in 2011 over 2010 reported in the previous edition of the Quarterly Sales Index. Growth in the African market in the first quarter of 2011 was driven in large measure by the performance of the two participating Moroccan lotteries, La Marocaine des Jeux and Loterie Nationale, which collectively recorded an increase in sales of 31.8% for the first quarter of 2012 over the first quarter of 2011.
The picture in Europe was also more complex. Across Europe, participating lotteries recorded an increase in sales of 4.3% for the first quarter of 2012, as compared to the first quarter of 2011. The increase in sales across Europe was again driven by the growth in VLT sales at Italy’s Lottomatica. Also performing strongly was Norway’s Norsk Tipping, which enjoyed an increase in sales of 10.9% in the first three months of 2012, as against the first three months of 2011. On the other hand, the parlous economic situation in Greece contributed to the moderation in sales recorded in Europe as a whole for the first quarter of 2012, as against the fourth quarter of 2011.
How do parimutuel lotteries rank against other parimutuel events, tournaments, contests and activities?
Here are the total estimated figures for all parimutuel wagering in 2012.
1. parimutuel sports; $536 Billion dollars annually
2. parimutuel poker; $184 Billion dollars annually
3. parimutuel billiards; $60 Billion dollars annually
4. parimutuel lotteries; $284 Billion dollars annually
Total: $1.064 Trillion dollars per year
Estimated Tax Revenues at a 5% rate (except for lotteries 35% rate):
1. parimutuel sports $26.8 Billion dollars annually
2. parimutuel poker $9.2 Billion dollars annually
3. parimutuel billiards $3 Billion dollars annually
4. parimutuel lotteries $99.4 Billion dollars annually
Total: $137.4 Billion dollars annually
Traditionally land based parimutuel lotteries operate the pools at a net 35 percent commission structure after sales commissions and operational costs.
What is the biggest lottery in America?
Powerball® Will Receive A Birthday Makeover:
Starting Jackpots Double to $40 Million, Better Overall Odds for More Winners
Enriched $2 Game Also Benefits Players With More Chances To Become A Millionaire; Change begins January 15th, 2012
Urbandale, Iowa – As Powerball® prepares to celebrate its 20th year in 2012, the game is being redesigned to bring more value to its players. Jackpots will start at $40 million and the jackpot is being made easier to win. The overall odds of winning any prize are also easier, and there are more chances to win a prize of at least $1 million cash. The ticket price also will change, moving from $1 to $2.
Since getting its start in April 1992 in 15 states with jackpots that started at a guaranteed $2 million, Powerball has grown into one of the world’s biggest and most recognizable lottery games. Today it’s played in 44 jurisdictions across the nation, with players buying more than $3 billion annually in Powerball tickets. And the biggest jackpot in the game so far was a $365 million prize split by eight co-workers at a Nebraska meat-packing plant in February 2006.
But with that success comes a demand for innovation to keep things fresh. Alan Yandow, Vermont Lottery Executive Director and Powerball Group Chair, said lotteries are responding with the latest changes in Powerball.
“Frequently we hear from players suggesting that in addition to Powerball’s big jackpots, we give away more $1 million cash prizes,” Yandow said. “We’re excited to deliver the opportunity to create more millionaires and also provide more opportunities to raise additional revenues for the respected causes benefitted by lotteries.”
U.S. lottery directors this month approved the upcoming changes to the game. The enriched Powerball game will debut Jan. 15, 2012. Tickets in the game will cost $2 and the Power Play® multiplier feature will still be available for an extra $1 per play. For that extra $1, players have the chance to win $2 million cash for the match 5 prize.
Players in the newly designed game will still choose their first five numbers from a pool of 59. But the group of numbers in the Powerball pool will shrink from 39 to 35, producing better overall odds of winning a prize in the game. Players today have a 1 in 35 overall chance of winning, which will improve to 1 in 31.8 in the revamped game. The Powerball jackpots will start at $40 million or double the current starting jackpot of $20 million.
Yandow said that by changing Powerball’s ticket price to $2, U.S. lotteries are following the same successful business model they’ve used for years with lottery scratch games by offering various tickets at different prices. The Mega Millions® jackpot game and other in-state lotto and scratch games will still be available for those players who prefer the $1 price level of play.
The new Powerball game will still offer players nine ways to win prizes, with its second prize moving up to $1 million in cash from the current $200,000, and the lowest prize level (for those who match just the Powerball®) being elevated to $4 from $3.
Since Powerball’s inception on April 19, 1992, the game has generated approximately $33 billion in sales for lotteries that the game supports. About 25 to 35 percent of that amount goes to good causes such as education, senior programs, local towns and the environment; 50 percent is paid in cash prizes and 6 percent goes back to local communities in the form of retailer compensation. Participating Powerball jurisdictions are expected to generate even more money for those good causes by selling the new Powerball game.
Powerball drawings are Wednesdays and Saturdays at 10:59 p.m. Eastern Time, 9:59 p.m. Central Time, 8:59 p.m. Mountain Time and 7:59 p.m. Pacific Time. For more information about Powerball please visit www.powerball.com
The 44 U.S. lotteries where Powerball is available are: Arizona Lottery, Arkansas Lottery, Colorado Lottery, Connecticut Lottery Corporation, D.C. Lottery & CGCB, Delaware State Lottery, Florida Lottery, Georgia Lottery Corporation, Hoosier Lottery, Idaho Lottery, Illinois Lottery, Iowa Lottery, Kansas Lottery, Kentucky Lottery Corporation, Louisiana Lottery Corporation, Maine Lottery, Maryland Lott, Massachusetts Lottery, Michigan Lottery, Minnesota State Lottery, Missouri Lottery, Montana Lottery, Nebraska Lottery, New Hampshire Lottery Commission, New Jersey Lottery, New Mexico Lottery Authority, New York Lottery, North Carolina Education Lottery, North Dakota Lottery, Ohio Lottery, Oklahoma Lottery, Oregon Lottery, Pennsylvania Lottery, Rhode Island Lottery, South Carolina Education Lottery, South Dakota Lottery, Tennessee Education Lottery, Texas Lottery, U.S. Virgin Islands Lottery, Vermont Lottery, Virginia Lottery, Washington Lottery, Wisconsin Lottery and the West Virginia Lottery.
Powerball® is owned by the Multi-State Lottery Association which is a government-benefit, non-profit association owned and operated by 33 member lotteries. MUSL currently coordinates six multi-state games in the United States.
Americans who spend the most money on Lottery tickets:
2011 Highest U.S. Annual Per Capita Sales
- Massachusetts $698
- D.C. $380
- Georgia $372
- New York $351
- New Jersey $301
Source: LaFleur’s 2012 World Lottery Almanac and Lottery Annual Reports
5 – Legal Resources and Support
6 – Summary and Conclusion
Our patented parimutuel lottery ticketing system allows for a wide variety of lottery draws within the traditional parimutuel format. Governments stand to raise billions of dollars via worldwide electronic lottery ticket sales.
As more and more jurisdictions move towards allowing Internet based lottery ticket purchases registrants will become familiar and accustomed to purchasing lottery tickets online. The lottery industry will benefit from an open, transparent, paperless purchasing system that provides a multitude of draw permutations across all electronic devices, and in all currencies.
Governments can regulate and tax worldwide lottery ticket purchasers. Rapid payment systems will bring more and more participants to the most user friendly parimutuel lottery system ever devised. Lottery ticket entertainment will reach billions of participants.