LOTTERY VALIDATION AND PAYMENT METHOD

Abstract

This invention is directed to lottery validation and payment method, particularly intended for State lotteries, which accommodates promotional tickets, online tickets and instant tickets with improved functionality and capability.

Description

FIELD OF THE INVENTION

This invention relates to the operation of lottery games, and, more particularly, to a method of validating lottery tickets presented for redemption by players and then paying prizes for winning tickets.

BACKGROUND OF THE INVENTION

Government-sponsored lotteries have been in existence in the United States for decades, and at least forty States currently operate one or more lottery games. In addition to selling tickets through retail outlets and other sources, State lotteries are ultimately responsible for the validation of tickets presented for redemption and the payment of winning tickets. Originally, most lotteries employed a hardware-based check printing system in which validation of a winning ticket was conducted “on-the-spot” and a check printed for the winning player. As the number of players grew, and the complexity of the games offered by lotteries increased, hardware-based check printing systems proved to be inadequate.

Many improvements have been made to the original check printing systems employed by lotteries, but the evolution of web-based technology and the sophistication and variety of lottery games created a need for improved functionality and flexibility in lottery validation and payment systems. For example, lotteries are increasingly involved in the development of promotional games in addition to the more traditional online and instant or “scratch-off” games. Promotional games may involve tickets in the form of coupons, vouchers, non-winning tickets from other lottery games and the like which may be redeemed for cash or merchandise. Often, lotteries partner with companies, sports teams and other organizations in promotional games wherein merchandise from the lottery partner comprises the prizes to be won instead of cash. Traditional validation and payment systems are not equipped to accommodate both online and instant tickets, and tickets used for promotional games, in an effective manner.

SUMMARY OF THE INVENTION

This invention is directed to lottery system, particularly intended for State lotteries, which employs a validation and payment method that accommodates promotional tickets, online tickets and instant tickets with improved functionality and capability.

The system of this invention features enhanced functionality compared to existing validation and payment systems and methods, including improved automated auditing; role-based security management; comprehensive reporting; automatic calculation of tax and other payments; comprehensive searching; expanded data attributes for claimants, claims, validation and vendors; simplified menus; point-and-click navigation; compliance with State electronic record keeping guidelines; and, compliance with federal information security standards.

In one aspect of this invention, the system is operative to maintain a data base of debt owed by individuals to one or more agencies of the State in which the lottery is operated. In the course of validating a lottery ticket, processing of installment payments and processing of tax forms involving a group of players sharing a prize, the system checks for players that are indebted to State agencies and reduces the amount of a prize payable to such player(s) until the amount of the debt is satisfied or all prize amounts due a given player are depleted. The process of collecting State-owed debt is applicable to all lottery tickets submitted by a particular player for redemption at any one time.

Another aspect of this invention is concerned with the preparation, delivery and reporting of information relating to the division of a prize amount among a number of individuals in a group. Although actual payment of a prize can be made to only one individual player, the system is operative to create a record of one or more other individual who are to share the prize, provide information concerning individual tax liability and create the appropriate Internal Revenue Service (IRS) tax reporting form for each individual in the group.

Still another feature of this invention is the ability to create and edit the game type, prize structures and winning tickets numbers for essentially any type of promotional game offered by the State lottery. While relying an outside gaming vendor system for the operation and ticket validation of games involving online and instant tickets, as described in more detail below, the system of this invention functions independently of the gaming vendor system in connection with promotional games.

DESCRIPTION OF THE DRAWINGS

The structure, operation and advantages of this invention will become further apparent upon consideration of the following drawings taken in conjunction with the accompanying drawings, wherein:

FIG. 1 is a schematic view of the validation and payment system of this invention;

FIG. 2 is a block diagram of a portion of the ticket validation method of this invention;

FIG. 3 comprises FIGS. 3A 3B which represent a continuation of the validation method of FIG. 2 and the completion of the validation function of FIG. 2, respectively;

FIG. 4 is a more detailed depiction of the application of business rules to the validation method shown in FIGS. 2-3B;

FIG. 5 is a block diagram of a portion of the payment method of the system of this invention;

FIG. 6 is a continuation of the payment method shown in FIG. 5;

FIG. 7 is a depiction of a portion of the payment method herein specifically directed to a divided claim;

FIG. 8 is an illustration of a portion of the payment method of this invention for a lump sum claim;

FIG. 9 is a block diagram of an ending portion of the payment method for both FIGS. 7 and 8;

FIG. 10 is a block diagram depiction of the State-owed debt collection method of this invention;

FIG. 11 comprises FIGS. 11A and 11B which illustrate the method of this invention in preparing, delivering and reporting tax information for prizes that are shared by a group of players;

FIG. 12 is a block diagram illustration of a method for creating a promotional game;

FIG. 13 is a block diagram illustration of a method for creating a prize structure for the promotional game of FIG. 12; and

FIG. 14 is a block diagram illustration of a method for creating a winning ticket for the promotional game of FIG. 12.

DETAILED DESCRIPTION OF THE INVENTION

Referring initially to FIG. 1, a schematic illustration of the validation and payment system 10 of this invention is provided. The system 10 includes a lottery server 12, a gaming vendor server 14 and a number of data terminals 18 communicating with the lottery server 12 through a network interface (not shown). The lottery server 12 and gaming vendor server 14 are connected to one another for purposes to become apparent below. The term “lottery server” as used herein is intended to broadly refer to a server computer that may be operated by a State lottery or other governmental entity including a program that performs validation, payment and other functions of the method of this invention. The term “gaming vendor server” refers to a computer server operated by a gaming vendor contracted by the State lottery or other governmental entity that performs, among other functions, validation of certain types of game tickets described below. A “data terminal” is a device that allows operators to communicate with the lottery server 12 via a web-based network or other communication system.

By way of background, many State lotteries offer a wide variety of games with the cooperation of outside gaming vendors through licensed retail outlets. For purposes of the present discussion, these games may be categorized in terms of the type of lottery ticket employed in the game. An “online ticket” refers to a lottery ticket that is generated by a State-wide gaming system provided by the gaming vendor via one or more terminals located on the premises of a licensed retailer. Online tickets are used to play “online games,” which, in most instances, involve a series of numbers selected by the player, or randomly chosen for the player by the gaming system, that are listed on the ticket. Periodic drawings of winning numbers are conducted by the State lottery for most online games, and the levels and draw frequencies typically vary for each game.

The term “instant ticket” as used in this discussion refers to preprinted tickets supplied in books to retailers, and to tickets for certain online games, in which the player can determine whether he or she holds a winning ticket essentially instantaneously after purchase by examination of the ticket and without the need for a drawing. One common type of instant ticket is a “scratch-off” ticket which generally includes a pattern of play indicia that is covered by a scratch-off latex layer which may be removed to expose the indicia hidden below, and prizes may be awarded depending on the indicia uncovered.

Online tickets and instant tickets are supplied by the outside gaming vendor with which a State lottery contracts. As part of its online services, the gaming vendor provides gaming terminals (not shown) located at licensed lottery retailers, the gaming vendor server 14 and the server program that runs on the gaming vendor server 14. In a typical online game, for example, a player purchases an online ticket at a lottery retailer and awaits the drawing of winning numbers for that game. If the player holds a winning ticket having a value less than a certain threshold amount, he or she may return to the retailer for redemption of such ticket. The operator may enter the ticket into the gaming terminal by scanning a bar code on the ticket, or manually entering a ticket number, and the gaming vendor server 14 operates to “validate” the ticket, e.g. determine if the ticket is a valid, winning ticket that may be paid and is within the retailer's payment authority. The same general process is also applicable to the redemption of instant tickets.

Some lotteries currently operate promotional games, often in partnership with other organizations, in which unique merchandise prizes are awarded such as cruise vacations, athletic event tickets, gift cards and other items in addition to cash. A “promotional ticket” may be generated for these games which may take many fauns such as coupons or vouchers. Alternatively, non-winning online or scratch-off tickets from online or instant lottery games may be employed as a promotional ticket. In the latter case, such non-winning tickets may be entered into the website or another format of a State lottery for a chance to win prizes from in-house “second chance” drawings it conducts.

This invention is primarily directed to a method of validating online and instant tickets via the lottery server 12 assisted by the gaming vendor server 14, and for validating promotional tickets via the lottery server 12. Once the ticket validation process is completed, the method of this invention provides for the payment of winning tickets. Novel aspects of the validation and payment processes are described below in connection with a discussion of both of these features of the method of this invention. Additionally, the invention includes a method for creating new promotional games, including recording the game attributes, the prize structure and winning ticket numbers for the game. Each feature of the method of this invention is described separately below.

It should be understood that the terminals 18 depicted in FIG. 1 are “data terminals” as distinguished from the gaming terminals (not shown) that are employed at licensed retail outlets and at other authorized redemption locations, described below, for the validation of online and instant tickets. The data terminals 18 are provided to operators for the entry of data which is processed by the lottery server 12.

Ticket Validation

Referring now to FIGS. 2-3B, the validation function of the method of this invention is illustrated in block diagrams that include data entry tasks of an operator using a data terminal 18 and processing functions of the lottery server 12 running a server program. The first task in the validation process is to identify the player seeking to redeem a lottery ticket. For purposes of the present discussion, unless otherwise specified the term “lottery ticket” is meant to collectively refer to online tickets, instant tickets and promotional tickets. Box 20 denotes the initial logon to the system by an operator, and an error message is produced at box 22 if the operator is not authorized to perform a ticket validation function. A player search tab 24 appears on the screen of the data terminal 18 at which the operator may enter search criteria for the player seeking to redeem a lottery ticket. See box 26. The system 10 of this invention provides a detailed player search capability allowing the operator to search for a particular player by social security number, last name, first name, middle name, the name of an entity, postal code, street address, city, State, federal tax identification number, date of birth or player ID. The search is executed at box 28, and the system conducts a search to determine if the player is of record in the system 10 represented by boxes 29 and 30. If the player record is not located, or if multiple player records are retrieved from the initial search criteria, the operator may conduct a supplemental search represented by box 32 in which additional search criteria may be input to the system without losing the data entered initially. For example, if the name James Smith was initially entered but that resulted in the display of several records for the same name, a further search could be conducted by adding the player's date of birth to find the desired player record.

If the appropriate player record is located, the system 10 provides for real time editing of the player information on such record in the event of any changes such as a new address, as represented by boxes 34 and 36. On the other hand, if there is no record for the player seeking to redeem his or her lottery ticket, the operator creates a new player record. See box 38. Whether the player record is edited, or a new player record is created, the system 10 automatically checks for duplicate players at box 40, e.g. it determines if the new or edited player information is already of record, and if “yes,” returns the operator to box 36 to edit the player information. Additionally, the system 10 checks for duplicate social security numbers if that was the search criteria initially entered by the operator at box 26. Further, the operator may enter the postal code of the player when creating a new player record at box 38, and the system 10 automatically populates the record with the city, State and county of the player's residence to save time and improve the integrity of data entry. Once the player identification task is completed, including the check for a duplicate player at box 40, the operator selects the validation tab on the data terminal, represented by box 42, to continue the validation process. For ease of illustration, the designation “A” in FIG. 2 connected to box 42 provides an indication where the validation process continues in FIG. 3A.

Box 44 is representative of entry of the lottery ticket into the system 10. Initially, the operator may choose between scanning the bar code on the ticket or manually entering the ticket number. See FIG. 3A. Online and instant tickets on the one hand, and promotional tickets on the other hand, are identified separately by the system 10 at box 45. A pin number may be entered for some instant tickets if required by the particular game. Ticket information for online and instant tickets is submitted to the gaming vendor server 14 at box 46 for validation using proprietary software of the gaming vendor. See also FIG. 1. The ticket information may be submitted in two ways depending upon the location at which the ticket is redeemed. In the lottery operated by the State of Florida, for example, online and instant tickets may be redeemed at the Headquarters of the lottery and at its District Offices located throughout the State (retail outlets are connected only to the gaming vendor server 14). At Headquarters, ticket information is submitted first to the lottery server 12 and then, through a connection between the lottery server 12 and gaming vendor server 14, such information is submitted to the gaming vendor server 14 for validation. District Offices, on the other hand, may employ a gaming terminal like that at a retail outlet in order to submit ticket information to the gaming vendor server 14.

The gaming vendor server 14 determines if the online or instant ticket has been previously validated at box 48, and, if not, a ticket record is created represented by box 50. Box 52 denotes processing in the gaming vendor server 14 to ascertain whether or not the online or instant ticket is a winning ticket, and, if so, a claim for that winning ticket is created as at box 54. A non-winning ticket “flag” or notation is produced if the online or instant ticket is not a winning ticket, as at box 56, and the system 10 provides a record of same in a report to the player, as discussed below.

The ticket information for promotional games is processed solely by the lottery server 12 as represented by box 60. The system 10 checks to determine if the promotional ticket has been previously validated at box 48 in the same manner as online and instant tickets noted above. In the event an online, instant or promotional ticket has been previously validated, the operator is provided with a screen with a message to that effect as represented by box 62. If the promotional ticket has not yet been validated, the lottery server 12 assigns a ticket record to the promotional ticket, determines if such ticket is a winner, and, if so, assigns a claim to that ticket in essentially the same manner described above with reference to boxes 50, 52 and 54.

Referring now to FIG. 3B, the validation process continues from box 54 in FIG. 3A to the box 64 in FIG. 3B identified as “apply business rules.” Many lotteries have a variety of rules that have been developed internally, and as part of the rules in the games that are offered, which must be observed in order for a ticket to be validated for payment. These business rules may include checking for an appropriate pin number for an instant ticket, for prior validation of the same ticket, for a prize amount in excess of the authorized payment at the redemption location, for expired tickets, for the age of player (below minimum age), whether merchandise or cash may be awarded for a winning ticket, for residency to establish tax liability, for State-owed debt (described in detail below) and a number of other items. An exception is placed on a claim for each issue with a business rule, and multiple exceptions may be assigned to a single claim.

FIG. 4 is a more detailed depiction of the routine employed by the system 10 in applying business rules. As noted above, a number of rules may be applicable to each claim, and the initial determination is made as to whether an exception should be applied to a claim as at box 61. The term “exception” as used herein refers to the creation of a flag or notation in the system 10 that one of the business rules may apply to a claim and must be resolved before payment can be made. If no exception applies, then the issue of whether the claim is taxable is dealt with, as described below in connection with a discussion of box 66. In the event an exception does apply to a particular claim, an exception claim is created as at box 63 which may be at the “player level” or at the “ticket level.” See boxes 65 and 67. With respect to player level exceptions, there are instances when payment is denied (or reduced) due to circumstances involving the player. For example, if a player owes debt to a State agency in the State where the lottery is operated, the proceeds from all of his or her claims may be applied to that debt before any payment is made to the player. In that circumstance, a “flag” is placed on the player payable status, as at box 69, to prevent payment of any claims to that player until the exception is resolved. On the other hand, there may be an exception applied to the ticket itself, such as with a ticket that is past its redemption date. A ticket payable flag is placed on the ticket in that event, as at box 71. It should be understood that the system 10 allows for payment of claims with no exceptions while payment of other claims with exceptions may be delayed until such time as the exception(s) is resolved.

Referring again to FIG. 3B, if the prize for a winning ticket is in excess of the reporting threshold set by the IRS, then federal taxes are payable to the IRS. Boxes 66 and 68 are representative of the processing steps undertaken by the system 10 to determine whether or not federal taxes should be deducted from a given claim. If taxes are due, a tax claim commitment is created as at box 70 and taxes are deducted from the prize at box 72. A prize claim commitment is created at box 74 that reflects the total prize amount less the taxes deducted, and a determination is made of the type of payment desired by the player, e.g. cash (if allowed), check, wire transfer etc. Federal income taxes are deducted prior to payment of any State-owed debt of the player. If no taxes are due, as determined at box 68, the operator enters the type of payment desired by the player at box 75 and a prize claim commitment is created at box 76. After creation of either a prize claim commitment or a reduced prize commitment, the system 10 queries the operator to determine if any more claims have been attributed to the ticket submitted for validation. See box 78. Some tickets contain multiple “plays” of a game, such as several sets of number selections for an online game printed on the same ticket, and more than one set of numbers may win for any given draw. If additional claims have been assigned to the same ticket, each is subjected to business rules in Box 64 and the remainder of the validation process denoted in boxes 66-76 described above.

The system 10 is configured to process essentially any number of online, instant and/or promotional tickets of a given player in a single redemption session. Box 78 in FIG. 3B is connected to box 80 in FIG. 3A to indicate that once the above-described validation sequence for one ticket is completed, the operator is queried as to whether or not the player has any additional tickets to submit. If so, the process begins again at box 44 for each individual ticket. Consequently, a player may be entitled to multiple claims in a single redemption session, including more than one claim on a single ticket and/or a claim on one or more separate tickets.

The next step in the validation process is depicted at the bottom portion of FIG. 3A continuing to the bottom portion of FIG. 3B. After all of the tickets for a given player have been processed as described above, the operator is invited to apply a manual exception code to each claim. See box 82. The term “manual exception code” as used herein refers to certain conditions or rules promulgated by the lottery that must be met before a claim is paid, in addition to the business rules described above. For example, one common manual exception code occurs when a player advises the operator that the prize for a winning ticket is to be distributed among a group of players. Under that circumstance, additional information must be entered in the system 10, such as the identity of each individual who will share in the prize and the amount to be given each player, before the claim can be paid. If a manual exception code is appropriate, it is applied as at box 84.

Regardless of whether or not a manual exception code is applied, the system 10 next determines whether the player can be paid for each ticket record and each claim, as represented at box 86. Depending upon the severity of an exception, all related unpaid claims and tickets belonging to the affected player may be coded “not payable” until the exception is researched and eventually resolved. System integrity is assured in this manner by preventing partial payments to be made to a player when conditions exist that require investigation. One example of an exception that is applicable to the player is if he or she has State-owed debt, which, as discussed more fully below, is deducted from prize winnings attributable to all claims of a player before he or she is paid. If the player is not eligible for payment, an indication to that effect is reflected in a validation report given to the player as represented in box 88. See right-hand portion of FIG. 3B. The validation report also includes player information, a list of all winning and non-winning tickets, a list of claims and a list of exceptions.

The loop depicted by boxes 90, 92, 94 and 96 at the bottom of FIGS. 3A and 3B is representative of a check of whether the ticket is payable as distinguished from the whether the player can be paid. The validation identification assigned to each ticket of the player in a given validation session is entered and a determination made if the ticket is payable. For example, if a ticket has not been timely redeemed, it cannot be paid. Once a check has been made of all tickets to be redeemed for a player, a final group validation is performed at box 98 in the event the ticket is for the multi-state game known as “Powerball.” The validation report is printed, as at box 88 discussed above, and then the system 10 evaluates the claims for each ticket and exception information to determine whether the validation operator may proceed to the “pay claims” feature of the system 10 discussed below. See box 100. For claim amounts under certain thresholds, the validation operator is allowed to continue to the pay claims function at box 102, but there are circumstances where the claim cannot be paid by such operator. For example, in Florida, if the redemption process is performed at a District Office of the lottery payment cannot be made via a wire transfer, and there are limits as to the amount that can be paid at a District Office. Other rules apply at Headquarters, e.g. payments cannot be made in cash, and payment in the form of free tickets cannot be made to out-of-state residents due to legal restrictions involving mailing of lottery tickets across State lines. In those circumstances, the system 10 advises the operator to “stop,” as at box 104, so that the payment issue may be resolved.

Referring now to FIGS. 5-9, the method of paying validated claims according to this invention is illustrated. Initially, the operator must log on the system 10 as at box 106, and if the operator is not authorized to perform a payment function an error message is generated at box 108. Assuming the operator has authorization, an awaiting payment tab 110 is displayed and the operator is prompted to enter search criteria for a claim that has been validated and is awaiting payment. See box 112. The search criteria may be the player identification, the player type (individual, entity etc), the player name, social security number etc. See discussion above in connection with the player search criteria box 26. The search criteria is entered, a search is conducted at box 114 and displayed at box 116, and then an indication is provided as to whether the claim is found (box 118) or not. If not, another search is conducted as represented by box 120.

Once the claim is found, the player identification is displayed at box 122 and then a prompt is provided for the operator to identify and enter what type of player is making the claim. See Box 124 in FIG. 6. Lottery claimants may be individuals, businesses or assignment companies, and claims may be processed at District Offices in batches through the mail. That is, District Offices may accumulate a number of paid tickets for prizes of $100 or less and enter them in a “batch” into the system 10 under a District Office “player number” to reduce the payment time to players. A “district batch” tab 126 is depicted in FIG. 6 which is representative of a process wherein an operator processes a number of paid tickets in a “batch,” and a payment record for tickets paid that day is produced for accounting purposes. The “display pay SOD tab” 128 is representative of a process for paying a State agency any money collected by the Lottery from individuals who owe such agency.

Installment claims which are not paid by wire transfer can be paid as checks as represented by boxes 130 and 132, and regular payments can be paid as represented at box 134 in the form of cash, check, wire transfer, new lottery tickets or, for some types of promotional tickets, in merchandise. Box 134 is representative of the process for paying claims at the time a player seeks to redeem a lottery ticket, and two types of payment sequences are shown in the drawings herein for purposes of illustration. A claim may be “divided” as discussed below with reference to FIG. 7, or paid as a lump sum as described in FIG. 8. Both divided and lump sum payment processes end with the steps depicted in FIG. 9. It should be understood that the payment processes for installment payments and for “batch” processing of claims at District Offices are similar to that shown in FIGS. 7-9.

Referring to FIG. 7, boxes 136, 138, 140, 142 and 144 represent initial steps to “divide” a claim per the request of a player. For example, a player holding a claim worth $500 may want a portion of that amount in cash and the remainder in new lottery tickets or some other prize. Box 138 indicates that an assessment is made as to whether the claim may be divided in the fashion requested by the player, or, if not a “stop” message is received as at box 139. A promotional ticket, for example, may sometimes only be redeemed in merchandise and not cash or new lottery tickets. If the claim may be divided as requested by the player, blocks 140-144 represent the steps taken by the operator to enter the request on a screen and execute same unless a request is made to cancel the division as at box 146. Each claim for which there is a request to divide is validated by the operator at box 148, and a check is made, represented by box 150, to confirm that the total amount of the divided claim and how it is to be divided are validly entered before a claim commitment is created as at box 152. The designation “B” connected to box 152 is used to denote where the process of FIG. 7 continues, as illustrated in FIG. 9 and discussed below.

The “pay claim now” box 154 illustrated in FIG. 8 refers to the payment process for “lump sum” amounts, e.g. claims that are to be paid by cash, wire transfer, check, new lottery tickets or merchandise, but not a combination of same. The operator initially validates what amount(s) are to be paid, and the type of payment requested. See box 156. Business rules are applied in making this determination. As discussed above, there are restrictions on some types of payments, e.g. District Offices cannot pay by wire transfer, Headquarters cannot pay cash etc. The system 10 determines if the payment type and amount are valid, at box 158, and provides a “stop” message 160 if there is an issue or proceeds to validate dual control as represented by box 162. The “dual control” function denoted by box 162 refers to a business rule which prohibits the same operator involved in the validation of a ticket from paying that ticket if the prize amount is over established business rule limits. This provides a measure of security in the system 10. The system 10 determines if the operator may pay the claim, represented by box 164, and a “stop” message 166 is provided if a business rule would be violated by such payment. If not, the operator proceeds to validate the bank information provided by the player if a wire transfer has been requested, or validates the player address if payment is to be made by check. See box 168. The validation process conducted at box 168 is checked, at box 170, and either a stop message 172 is received or the process proceeds with an inquiry as to whether or not the player is responsible for the payment of taxes. See box 174. If the player is a resident of the United States an IRS form W2G is created, or, if the player resides in a foreign country, an IRS form 1042S is generated. See box 176. The designation “B” connected to box 176 is the same as that noted above for FIG. 7, discussed above.

Referring now to FIG. 9, box 178 is representative of a feature of this invention in which claim commitments to a player in a particular payment session are consolidated. For example, if a player has presented a number of winning tickets, or one or more tickets having multiple wins, requests may have been made by such player for different types of payment for the claims. The consolidation feature of this invention functions to create a single check, or a single wire transfer, or a single group of new lottery tickets instead of one for each claim. The total amount due the player is provided for a check or wire transfer, as at box 180, and then the system 10 links prize payment to the player, State-owed debt deductions, tax deductions and “5754” records. See box 182. The handling of tax responsibility for a claim to be shared by multiple players (5754 record) is described in connection with a discussion of FIGS. 11A and 11B.

All payment records are created, as at box 184, and a query is provided as to whether payment is to be made by check at box 186. If “yes,” a check is printed at box 188 which includes IRS Form W2G information for United States residents. An IRS Form 10425 is printed for residents of foreign countries, at box 190, and then a pay report is produced for the player's payment session that provides a detailed analysis of all tickets and claims included in the validation process described above, an itemized explanation of claims that taxable and claims that are not taxable, and, a listing of deductions for State-owed debt including the agency that received payment. See box 192. In the event payment is to be made other than by check, the system 10 generates IRS Forms W2G or 1042S, if needed, e.g. if the amount to be paid exceeds the threshold for withholding of federal income taxes (See box 194) and then a pay report is produced at box 192. This completes the payment process for the player in question, and system 10 removes the paid claims from the pay queue for such player and returns to the awaiting payment tab to pay the next player. See boxes 196 and 198.

The system 10 of this invention provides a comprehensive State-owed debt service to State government agencies. Any State agency that maintains a data base of unpaid debts to the government can submit a file of debtors to the State lottery that is used during ticket validation, payment processing and “5754” processing described below in connection with a discussion of FIGS. 11A and 11B. The system 10 automatically checks players who win prizes that are equal to or greater than a State-owed debt threshold amount, which is typically established by the legislature of the State in which the Lottery is operated. If a match is found, steps are taken to confirm whether or not a debt is owed, and, if so, the amount is deducted from the player's winnings.

Referring to FIG. 10, the process described generally above is illustrated in more detail. Boxes 200, 202 and 204 are representative of the steps for placing records of the identities of individuals who are indebted to one or more State agencies onto the data base of the system 10. A player record is created at box 200 by each agency that participates in this service for each individual that owes it debt. Once the player record is established, an identification provided by the Lottery to each agency is linked by the system 10 to the new player record. See box 202. The linked file(s) is then loaded onto the data base of the system 10, and the system 10 functions to completely refresh the data each time it is loaded in order to remove any individuals who have satisfied his or her debt obligation. See box 204.

A search for State-owed debt is undertaken during ticket validation and when player records are added during the 5754 procedure described below. See box 206. State-owed debt business rules are applied to each claim as at box 208, and if a match is detected the affected claim is tagged with an exception code that must be resolved before the player can be compensated. See box 210. Such business rules include, for example, requiring a match of the player's social security number or the name of the player and his or her date of birth. Boxes 212 and 214 are representative of the system 10 function in which all claims of the player may be tagged with an exception code, and the aggregate amount of all claims may be reduced until the amount of the claim is satisfied or until all prize amounts are depleted. A State-owed debt claim is created, at box 216, for the amount due that can be paid from available funds and then the exception is resolved at box 218. The resolution of an exception may involve research on the part of a supervisor or other individual, including contacting one or more agencies to confirm the existence and amount of the State-owed debt.

Assuming the State-owed debt match can be confirmed, all claims of the player in question may be used to satisfy such debt as noted above. In the event the funds are not sufficient to pay all State-owed debt, internal guidelines are followed that determine the order of payment precedence. The highest ranked agency amount due is paid first, then the second ranked agency and so on. If multiple agencies are involved with the same rank, the available funds are allocated on a percentage basis, and the funds are remitted to the agencies as at box 220.

Referring now to FIGS. 11A and 11B, the system 10 function is depicted for assisting a group of players that have an agreement to share prize winnings among themselves. An option is available to divide prize winnings for tax reporting purposes among the players by providing an IRS Form 5754 to the designated ticket owner. Many lotteries operate by a law which specifies that payment can be made only to a single player, even though a group of players have agreed to share the prize, in which case it is the responsibility of the “winning player” to distribute the prize to the other, “participating players.” The 5754 Form designates how the winnings will be shared and how the tax responsibility will be allocated among the group. This information is collected in the system 10 and supplied to the IRS at the end of the tax reporting year. The winning player and each participating player are provided with an IRS Form W2G or 1042S that identifies his or her portion of the winnings and their respective tax responsibilities.

FIG. 11A illustrates that a search is initially conducted for a claim, at box 222, and a 5754 exception is assigned to such claim to prevent it from being paid while the Form 5754 information is being processed. See box 224. The processing of Form 5754 requests, represented at box 226, begins with a search for the winning player and participating players to be included on such form. The search is conducted in essentially the same manner as described above in connection with a discussion of FIG. 2, including the capability of creating new player records or editing existing records. One-click functionality is provided to evenly distribute the prize amount among all players, or a fixed amount can be designated for one of the recipients and the remainder distributed evenly among the others. When players are added to the 5754 Form, the system 10 automatically checks to determine if each player is responsible for State-owed debt. If so, the prize winnings are marked for review with the matched agency which is contacted to confirm the match and to determine the amount that can be collected from the matched and confirmed 5754 player's share of the winnings. The system 10 is also operative to delete players from the 5754 Form, if corrections are required.

Once the 5754 information has been entered in the system 10, the Form 5754 exception is resolved and the claim is released for payment. See box 228. As discussed in more detail below with reference to FIG. 11B, a W2S or 1042S tax form is provided to the winning player and the participating players (5754 recipients) at boxes 230 and 232. Any deducted taxes are submitted to the IRS, as represented at box 234. The payment and tax form are provided to the winning player. See box 236. The payment may be made in a lump sum or installments, as at box 238, and after all of the payment details have been created for the winning player the system 10 sums up all claim details that have a tax reported flag check at box 240 and sums all tax deduction claim details for the winning player. See box 242.

As noted above, the printing function denoted by boxes 228, 230 and 232 above is illustrated in more detail with reference to FIG. 11B. A W2G or 1042S form is created for the winning player at box 244, and the system 10 checks to see if the claim for that player is associated with a Form 5754. See box 246. If not, the winning player receives a printed W2G or 1042S form, represented by boxes 248 and 250. On the other hand, where multiple players are sharing the prize and have been listed on a Form 5754, a W2G form is created for individual players at box 252 which reflects the gross winnings and tax responsibility for such player(s). See also box 254. The same sequence is performed for each participating player at box 256, and then a W2G form is printed for each at box 258 and sent to the participating players. See box 260.

A still further feature of the system 10 of this invention is the ability to create promotional games, as well as prize structures and winning tickets for such games. As discussed above, “promotional games” with “promotional tickets” differ from typical online and instant games in that they are operated by the State Lottery instead of a outside gaming vendor and may include partnerships with other organizations in which unique merchandise prizes are awarded such as cruise vacations, athletic event tickets, gift cards and other items in addition to cash. FIG. 12 is representative of the steps a lottery official may undergo to create a promotional game, FIG. 13 depicts steps employed for the creation of a prize structure for such game, and, FIG. 14 illustrates the creation of winning tickets for the game.

Referring initially to FIG. 12, the operator is prompted to conduct a search to determine if the game he or she seeks to create already exists in the system 10, as at boxes 262 and 264. If so, the operator may exit the promotional game, indicated at box 266, edit the existing game or choose to create a new game. The box 268 illustrated in dotted lines in FIG. 12 depicts a number of queries and steps that the operator may perform in creating a new game or editing an existing one. Although the various boxes are serially connected, it should be understood that these steps need not necessarily be performed in the sequence shown. A game number may be selected at box 270, a game type is selected from a list at box 272 and the operator may choose to create a description of the game at box 274. A “flag” or indication is set at box 276 as to whether the game the game is a para-mutual game, e.g. one in which the prize amount is determined by dividing the prize among a pool of winners, or a game in which the prize amount is fixed. In some games, a “pin” number must be inputted to validate the ticket. See box 278. The end validation date (box 280) refers to the last day a ticket may be redeemed at the Headquarters or District Offices of the State lottery, the end redemption date refers to the last day a ticket may be redeemed at a retailer (box 282) and the begin date is the day on which the game begins (box 284). After entering the information collectively identified within box 268, the operator is prompted at box 286 to determine if the promotional game he or she is creating (or editing) is related to another game, and, if so, that related number is entered at box 288 and validation rules are applied at box 290. In the event there is no related promotional game to the one being created, the operator is prompted to skip the step denoted by box 288, and proceed directly to the application of validation rules at box 290.

The steps that are involved in the creation of a prize structure for the promotional game are illustrated in FIG. 13. The operator is initially prompted to enter the game number of the promotional game for which a prize structure is to be created. See box 292. Box 294 is shown in dotted lines for the purpose of depicting several steps that may be performed by the operator to create a prize structure for the promotional game, although the order or sequence in which such steps are undertaken may be varied, as desired.

An item count may be set at box 296, and a pay method selected at box 298, e.g. cash, check, wire transfer, merchandise, gift card, ACH or new lottery tickets. The designation “set taxes paid by lottery flag” in box 300 is applicable to prizes that have a value but for which federal income taxes are not readily deductible. For example, if a prize in a promotional game is a new automobile, its value would be considered over the threshold level for federal tax liability purposes. In this instance, and for similar prizes, the State lottery typically pays the IRS the taxes that would be assessed for a cash prize equal to the value of the automobile and such amount is included in the overall value of the prize. Consequently, if one or more prizes for a given promotional game have value in excess of the federal tax liability threshold, a flag is set at box 300.

The “set check for State-owed debt flag” depicted in box 302 provides the operator with the ability to disable State-owed debt matches described above in connection with a discussion of FIG. 10. For example, prizes of merchandise are generally excluded from payment of State-owed debt because there is no cash to deduct the State-owed debt. A promotional game description may be entered at box 304, if not already present from box 274 discussed above.

The “set win for life flag” reference in box 306 accommodates promotional games having a prize which involves payment of a sum of money to the winner, in an installment plan of periodic payments, for the rest of his or her life. The operator may establish the number of draws of winning numbers that the game may include, e.g. a single draw, weekly, monthly etc. (See box 308). A predetermined number of payments to the winner(s) may be made, as determined at box 310, and the operator may designate how frequently such payments are made. See box 312. The “prize type” in box 314 may be cash, merchandise, a combination of cash and merchandise or new lottery tickets, and a prize structure identification is assigned by the operator at box 316. The dates on which the promotional game begins and ends are entered at box 318. A “prize amount” is determined at box 320, which is the gross amount of the prize for a single payment. If an installment option is designated, then the total prize is calculated by multiplying the number of payments by the prize amount. A prize level may be applied to the game, as at box 322, which is essentially an arbitrary number to distinguish classes of prizes such as a top prize as distinguished from secondary prizes. The amount wagered on a promotional game ticket is entered at box 324.

After completion of the steps and queries described above and noted within box 294, the operator is prompted to apply validation rules to the prize structure at box 326. The system 10 functions to link the prize structure at box 328 created by the steps noted in FIG. 13 with the promotional game created as a result of executing the system 10 functions shown in FIG. 12. More prize structures may be created, as noted at box 330, or the operator may end the session.

Referring now to FIG. 14, the operator may use the functionality of the system 10 to record winning promotional tickets for the promotional game of FIG. 12 or another promotional game. A promotional game is selected at box 332 by number and game type, and then the system 10 displays a list of existing tickets (if any) for that game. A determination is made if a ticket already exists at box 334, and, if so, whether the ticket has been paid. See box 336. A read only display is provided by the system 10 for tickets that have already been paid which includes information regarding the ticket number, prize description etc. See box 338. In the event the ticket has not been paid, the operator is given the opportunity to perform editing functions, collectively noted in box 340 of FIG. 15, including the prize structure, ticket status, ticket number and prize amount. See boxes 342, 344, 346 and 348. After editing, validation rules may be applied, as at box 350, and the session ended.

If a determination is made at box 334 that no ticket exists for a selected promotional game, the prize structure identification created in FIG. 13 is entered at box 352. A display is provided at box 354 of prize structure information created in FIG. 13, which is retrieved and used to populate the screen. See box 356. The promotional ticket is created at box 358, denoted by dotted lines in FIG. 14, within which separate steps are undertaken including the entry of a ticket number at box 360, setting of the ticket status at box 362 and adjustment of the prize amount at box 364. If the operator desires to create more tickets, as at box 366, the sequence beginning at box 332 is repeated. Otherwise, validation rules are applied at box 350.

While the invention has been described with reference to a preferred embodiment, it should be understood by those skilled in the art that various changes may be made and equivalents substituted for elements thereof without departing from the scope of the invention. In addition, many modifications may be made to adapt a particular situation or material to the teachings of the invention without departing from the essential scope thereof. For example, the system 10 provides security measures in addition to those noted above. In one embodiment, a comparison is made between the stock number of the paper on which an online ticket is printed, and the stock number of the paper rolls provided to a given selling retailer which are used to print the tickets. If the stock numbers do not match for a winning ticket, it may be an indication of a counterfeit ticket or other redemption issue.

Therefore, it is intended that the invention not be limited to the particular embodiment disclosed as the best mode contemplated for carrying out this invention, but that the invention will include all embodiments falling within the scope of the appended claims.

Claims

1. A method of validating a lottery ticket, comprising:

(a) identifying a player seeking to redeem at least one lottery ticket;

(b) submitting the at least one lottery ticket to a lottery server or to a gaming vendor server dependent on the type of the at least one lottery ticket;

(c) creating a claim in the event the at least one lottery ticket is a winning ticket;

(d) applying business rules to determine if the claim for the winning ticket can be paid.

2. The method of claim 1 in which step (a) comprises communicating player information to the lottery server including any one or more of social security number, last name, first name, middle name, organization name, date-of-birth, address, postal code and player identification number.

3. The method of claim 2 in which step (a) includes conducting a search in the lottery server to determine the existence of a duplicate social security number in the event a social security number is the player information communicated to identify the player seeking to redeem a lottery ticket.

4. The method of claim 1 in which step (a) comprises locating a pre-existing player record stored in the lottery server.

5. The method of claim 1 in which step (a) comprises updating details of the pre-existing player record in real time.

6. The method of claim 1 in which step (a) comprises creating a new player record in the event player information for the player seeking to redeem at least one lottery ticket is not present in the lottery server.

7. The method of claim 6 in which step (a) includes creating a new player record by submitting the postal code of the player seeking to redeem a lottery ticket so that the player record is populated with the city, state and county of the player's residence.

8. The method of claim 1 in which step (b) includes determining if the at least one lottery ticket is an online ticket, an instant ticket or a promotional ticket.

9. The method of claim 8 in which step (b) includes submitting an online ticket or an instant ticket to the gaming vendor server.

10. The method of claim 8 in which step (b) includes submitting a promotional ticket to the lottery server.

11. The method of claim 8 in which the at least one lottery ticket includes any combination of one or more online tickets, instant tickets and promotional tickets, said step (b) including submitting the online tickets and instant tickets to the gaming vendor server and submitting the promotional tickets to the lottery server.

12. The method of claim 11 in which each of an online ticket, instant ticket and promotional ticket to be redeemed by the said player may be submitted to the lottery server or to the gaming vendor server by scanning a bar code on such tickets or by manually entering a ticket number present on such tickets.

13. The method of claim 8 in which step (b) includes conducting a search of the lottery server to if the ticket if from an instant lottery game that requires a pin number.

14. The method of claim 17 in which step (b) includes submitting from the same player, instant tickets that require a pin number and instant tickets that do not require a pin number.

15. The method of claim 1 in which step (d) includes applying claims created in step (c) to state-owed debts of the player.

16. The method of claim 1 in which step (d) includes determining if the at least one ticket is an online ticket, and, if so, comparing the stock number of the ticket with the stock number issued to the selling retailer.

17. The method of claim 1 in which step (d) includes applying business rules including one or more of determining if the prize redemption date of the at least one ticket the player seeks to redeem has expired, if the at least one lottery ticket requires a pin number, if the at least one ticket has been previously validated, if the prize amount is in excess of that permitted to be paid at the location where the at least one ticket is redeemed, if the player is not of minimum age, the residency of the player and if the player is responsible for State-owed debt, and, assigning an exception to the claim for each business rule that is violated.

18. The method of claim 1 in which the at least one lottery ticket comprises a number of lottery tickets.

19. The method of claim 18 further including the step of printing a report including a list of each of the lottery tickets which the player seeks to redeem, a list of the winning tickets of the player, a list of the non-winning tickets of the player, a list of claims of the player and a list of exceptions assigned to any one of the player's claims.

20. A method of validating a promotional ticket, comprising:

(a) identifying a player seeking to redeem at least one promotional ticket;

(b) submitting the at least one promotional ticket to a lottery server;

(c) creating a claim in the event the at least one promotional ticket is a winning ticket;

(d) applying business rules to determine if the claim for the winning ticket can be paid.

21. The method of claim 20 in which step (d) includes applying claims created in step (c) to state-owed debts of the player.

22. The method of claim 20 in which step (d) includes applying business rules including one or more of determining if the prize redemption date of the at least one ticket the player seeks to redeem has expired, if the at least one lottery ticket requires a pin number, if the at least one ticket has been previously validated, if the prize amount is in excess of that permitted to be paid at the location where the at least one ticket is redeemed, if the player is not of minimum age, the tax responsibility of the player and if the player is responsible for State-owed debt, and, assigning an exception to the claim for each business rule that is violated.

23. The method of claim 20 in which the at least one lottery ticket comprises a number of lottery tickets.

24. The method of claim 23 further including the step of printing a report including a list of each of the lottery tickets which the player seeks to redeem, a list of the winning tickets of the player, a list of the non-winning tickets of the player, a list of claims of the player and a list of exceptions assigned to any one of the player's claims.

25. A method of validating a lottery ticket, comprising:

(a) identifying a player seeking to redeem at least one lottery ticket;

(b) submitting the at least one lottery ticket to a lottery server or to a gaming vendor server dependent on the type of the at least one lottery ticket;

(c) creating a claim in the event the at least one lottery ticket is a winning ticket;

(d) applying the claim created in step (c) to the State-owed debt of the player.

26. The method of claim 25 in which step (d) includes determining that the amount of the claim exceeds a predetermined minimum.

27. The method of claim 25 in which step (d) includes comparing the identity of the player determined in step (a) to a listing of individuals provided to the lottery server by state agencies that are owed a debt.

28. The method of claim 27 in which step (d) includes reducing the amount of the claim by the amount of the debt owed by the player to the state or until the amount of the claim is depleted.

29. The method of claim 25 in which step (c) includes creating a separate claim for each winning ticket of the at least one lottery ticket, and step (d) includes applying all of the separate claims to the State-owed debt of the player.

30. A method of validating a lottery ticket, comprising:

(a) identifying a player seeking to redeem at least one lottery ticket;

(b) submitting the at least one lottery ticket to a lottery server or to a gaming vendor server dependent on the type of the at least one lottery ticket;

(c) creating a claim in the event the at least one lottery ticket is a winning ticket;

(d) applying business rules to determine if the claim for the winning ticket can be paid;

(e) assigning at least one exception to the claim in the event of a violation of any of the business rules;

(f) resolving the at least one exception before the claim is paid.

31. The method of claim 30 in which step (e) includes assigning multiple exceptions to the claim.

32. The method of claim 31 in which step (f) includes resolving all of the multiple exceptions before the claim is paid.

33. The method of claim 30 in which the at least one lottery ticket comprises a number of lottery tickets submitted by the player, step (e) including assigning one or more exceptions to one or more of the lottery tickets and no exceptions to one or more of the other lottery tickets.

34. The method of claim 33 in which step (e) includes approving for payment those lottery tickets with no exceptions independently of proceeding with step (f).

35. The method of claim 30 in which the at least one lottery ticket comprises a number of lottery tickets submitted by the player, wherein step (c) includes creating a claim for each of the lottery tickets determined to be a winning ticket, and step (e) includes assigning an exception to all of the claims created in step (c) in the event the player is determined to owe a State-owed debt following step (d).

36. The method of claim 35 in which step (f) includes applying the state-owed debt to all of the claims before all or part of any claim is paid to the player.

37. A method of paying winning lottery tickets in a state lottery game, comprising:

(a) identifying a claim created as a result of a validation process conducted on at least one winning lottery ticket by a server;

(b) identifying the type of player seeking to receive payment on the claim identified in step (a);

(c) determining adjustments to payment of the claim;

(d) applying payment rules to the claim;

(e) paying the claim.

38. The method of claim 37 in which step (b) includes identifying whether the player is an individual or a legal entity.

39. The method of claim 37 in which step (c) includes dividing the claim into multiple payments collectively equal in value to the amount of the claim.

40. The method of claim 37 in which step (c) includes dividing the claim into a payment of cash and a payment of new lottery tickets collectively equal in value to the amount of the claim.

41. The method of claim 37 in which step (c) includes selecting a method of payment of the claim including one or more of a wire transfer, a check, cash and new lottery tickets.

42. The method of claim 37 in which step (c) includes reducing payment of the claim by the amount of any federal income taxes applicable to the claim and any state-owed debt of the player.

43. The method of claim 37 in which step (d) includes preventing the same operator from creating the claim identified in step (a) and generating payment of the claim in step (f) in the event the claim exceeds a predetermined amount.

44. The method of claim 37 in which step (e) is performed at the headquarters and the district offices of a State lottery, and wherein step (d) includes restricting the form of payment of a claim and the amount of payment of a claim dependent on the location of payment.

45. The method of claim 37 in which step (e) includes generating a tax form for players that are United States residents.

46. The method of claim 37 in which step (e) includes generating a tax form for players that are residents of a foreign country.

47. A method of paying winning lottery tickets, comprising:

(a) identifying a claim created for each of a number of winning lottery tickets as a result of a validation process conducted by a server;

(b) identifying the type of player seeking to receive payment on the claims identified in step (a);

(c) determining adjustments to payment of the claims;

(d) applying payment rules to the claims;

(e) consolidating payment of the claims so that a single check, a single wire or a single cash amount is paid to the player for all of the claims.

48. The method of claim 47 further including the step of generating a payment report that identifies the player, provides an inventory of all of the lottery tickets and claims included in the validation process, provides an itemized explanation of claims that are taxable and claims that are not taxed, and, provides a listing of deductions for state-owed debt and the state agency that received payment.

49. A method of detecting, collecting and remitting debts owed by players of a lottery game to agencies of the State in which the lottery game is operated, comprising:

(a) identifying a player seeking to redeem at least one lottery ticket;

(b) submitting the at least one lottery ticket to a server for validation;

(c) creating a claim in the event the at least one lottery ticket is determined in step (b) to be a winning ticket;

(d) searching State-owed debt records maintained in the server that list individuals who owe money to one or more State agencies;

(e) determining if an individual listed on a state-owed debt record matches a player seeking payment of a claim;

(f) reducing the player's claim, in the event of a match, by the amount of the State-owed debt until the amount due is satisfied or until the claim is depleted;

(g) remitting the funds obtained in step (f) to one or more State agencies.

50. The method of claim 49 in which step (d) includes acceptance of a file from all State agencies submitting files for owed debts from individuals and importing the files to the server.

51. The method of claim 49 further including deducting federal income taxes from the claim prior to performing steps (f) and (g).

52. A method of reporting the proceeds from a winning lottery ticket to a group of players that have agreed to share the prize winnings, comprising:

(a) conducting a search for a claim assigned to a winning lottery ticket as a result of a ticket validation process conducted on a server;

(b) assigning an exception to the claim;

(c) processing a request for the distribution of the amount of the claim among the group of players which includes one winning player and one or more participating players;

(d) printing a tax form for the winning player and printing a tax form for each of the participating players;

(e) creating a report including the information from step (d) for submission to the Internal Revenue Service.

53. The method of claim 52 in which step (c) includes preventing payment of the claim prior to completion of step (d).

54. The method of claim 52 in which step (c) includes reporting the distribution of the payable amount of the claim in a lump sum or in installments equally among the winning player and the participating players.

55. The method of claim 52 in which step (c) includes reporting of the distribution of the tax responsibility of the claim payable in a lump sum or in installments in different amounts to the winning player and the participating players.

56. The method of claim 52 in which step (c) includes creating a record for the identification of the winning player and each of the participating players in the group, and editing such records in the event corrections are required to be made.

57. The method of configuring a promotional lottery game on a lottery server, comprising:

(a) selecting a game type from a list on the lottery server;

(b) assigning a beginning date, an ending date and an end redemption date to the promotional game;

(c) creating a prize structure for the promotional game including the designation of a payment method, the number of payments, a prize type, a prize amount and payment frequency;

(d) creating winning tickets for the promotional game including specifying a prize structure, a ticket number and a prize amount.

58. The method of claim 57 in which step (c) includes determining federal taxes to be paid by the operator of the promotional lottery game for prizes other than cash so that the value of the prize to the winning player is not reduced by the amount of the federal tax.

59. The method of claim 57 in which step (c) includes providing for the reduction of the amount of a cash prize by the amount of any State-owed debt of the winning player.

60. The method of claim 57 in which step (c) includes providing for an award of a prize payable throughout the life of the winning player.

61. The method of claim 57 further including the step of linking the promotional game determined from steps (a) and (b) to the prize structure created in step (c).