Techniques to create targeted lottery systems using electronic media interfaces
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A system to encode lottery number onto magnetic strip cards used as fare cards for public transportation systems. The system is activated by user selection of a lottery option and increased payment at the time of the fare card purchase, or altered after purchase in a separate hardware system. A second unit determines those cards that will be selected for payout (e.g., winning cards). The system is designed to provide additional revenue to replace/reduce government subsidization of public transportation, by collecting additional revenues from that portion of the population that uses the transportation system and opts to participate in the lottery. Most services provided by an electronic media interface (e.g., fare card, credit card, ticket, computer modem, etc.) can be modified to provide this targeted lottery feature.

Schoen, Neil C. (Gaithersburg, MD, US)
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Neil C. Schoen (9817 Freestate Place, Montgomery Village, MD, 20886-3158, US)
1. A system to increase revenues paid to commercial product corporations by addition of electronic lottery processes and operations, which may collect additional revenues from customers for said lottery operations, above and beyond those paid for normal products or services, said invoices selected from the group of: tickets, credit card receipts, credit card bills, comprising: means for electronically identifying and redeeming customer invoices which contain modifications provided for additional wager and customer identification information for lottery to provide predetermined payouts to winning lottery customers; means to collect said additional revenues from customers of said lottery operations; means to ensure the security and integrity of said lottery processes and operations to prevent fraudulent use of invoicing media to obtain said payouts of lottery funds; wherein said commercial products corporations consist of large consumer retail corporations; and wherein the means for electronically identifying and redeeming customer invoices is chosen from the following group: a.) existing cash registers which add an additional marking to receipts at point of purchase; b.) existing receipts mailed from commercial corporations or financial institutions with said lottery payouts.

2. A system according to claim 1 wherein said commercial product corporations are consumer retail chains with cash register networks, which employ magnetic strip/manual entry credit card order machines, adapted to accept additional lottery funds by recording said funds and marking said credit card receipts for further processing to determine total funds available for payout to operate said lottery processes.

3. A system according to claim 1 where said commercial product corporations operate a large Internet marketing service which is adapted to accept additional lottery funds by marking said customer invoices with the value of said additional funds and an identification code of the customer, to operate said lottery processes; and wherein means for electronically identifying and redeeming customer invoices consists of adapting said marketing systems to add to the customer on-line bill the amount chosen for lottery processes, which is equivalent to use of the existing system for recording an additional purchase of merchandise, in this case the lottery option; and said means of redeeming includes mailing the invoice or electronic crediting of said customer's account.

4. A system according to claim 1 where the commercial product corporations are parking lots, theaters, and sports arenas and the invoices are the tickets sold at these venues, along with additional information written on the ticket to identify the amount of lottery funds added; and where the means for redeeming the customer invoice includes mailing the invoice or the use of an electronic ticket redemption machine.

5. A system according to claim 1 wherein said corporations include government-funded organizations.

6. A system according to claim 5 wherein said government-funded organizations include parking lots, sports arenas, theaters, and cultural organizations and the invoices are the tickets sold at these venues, along with additional information written on the ticket to identify the amount of lottery funds added: and where the means form redeeming the customer invoice includes mailing the invoice or the use of an electronic ticket redemption machine.


This application is a Divisional Application of prior application Ser. No. 09/296,864 filed Feb. 17, 1998, which was a Continuation-In-Part of prior application Ser. No. 08/619,984 filed Mar. 21, 1996.


Lottery systems have become commonplace, as a result of changes in state laws, which has led to proliferation of outlets at which one can purchase lottery tickets. Currently, many state and local governments now offer lottery purchases via machines at freeway stops, commercial enterprises (e.g., local grocery stores, tobacco shops, etc.) as well as at state/local government sponsored outlets. The present lottery distribution systems lack specificity for targeting resources to users of state systems, such as transportation and health care for example; they depend on government allocation of general lottery revenues.

The present invention allows lottery revenues to be collected from the users of these state/local services, which typically are subsidized by tax revenues, and always in need of additional resources. With the advent of electronic fare collection systems, the opportunity to selectively access the user population now exists. The application of this new technology to provide additional resources to state and local services via lottery processes will be described in this patent application and associated claims.


The substance of the present invention is to allow a user-selected lottery option with minimal perturbations to the cost and efficiency of operation of currently established service delivery systems. This description will focus on modern metro-rail transportation, but this concentration is not intended to limit the scope of this invention.

The essential innovation is the selection and encoding of a random number sequence on the magnetic/electronic media (e.g., fare card). When the media is presented to a redemption device, the encoded random number can be checked against selected winning numbers to determine if a particular media article presented for redemption is a winning item. Depending upon the traffic volume, options for user-selected sequences can be provided, but will slow down the system throughput since the purchaser will require more time to manually select a number.

Another key feature of the present invention is the ability to work with existing systems with minimum modifications. Current magnetic strip fare card machines have the ability to encode time, location and monetary values as part of the process of automatically recording the change in fare card value based on the entry/exit locations and the time of the day (the Washington D.C. metro-rail system is a good example). A simple modification to the fare purchase hardware system can enable additional funds to be collected for a lottery option and a suitable code number to be written on the fare card magnetic strip. Redemption of the fare cards can be accomplished after exit at separate machines, at the traveler's convenience (so as not to delay travelers not using the lottery option).

This invention is not limited to magnetic fare card systems. Any system that requires a ticket or card can be adapted for lottery use. For example. parking lot tickets, credit cards, show tickets or any system that collects cash in exchange for a receipt can be modified according to this invention.


FIG. 1 shows selection and redemption methods for magnetic fare card systems with a separate redemption machine that interrogates fare cards after the holder exits the destination station.

FIG. 2 illustrated an optional configuration in which the holder can select a lottery option after exiting the destination station by adding cash and redeeming at that same machine, which utilizes a random selection process based on the number of players registered (similar to a slot machine pay-off based on traffic history).

FIG. 3 shows a selection and redemption method for credit card purchases at a cash register type device, with a redemption system using mail notification based on the number of players.

FIG. 4 shows a selection and redemption system based on computer purchases, with redemption accomplished by computer e-mail or mail notification.

FIG. 5 shows two lottery configurations, one (top) using existing magnetic strip fare cards, and the other (bottom) using an electronic fare card (“go card”) which allows more information to be stored and no mechanical handling of the fare cards within either the metro-rail purchasing or lottery machines.

FIG. 6 shows the software flow diagram which describes the software functions performed as a result of hardware operation of the machines in FIG. 5.


One of the most suitable government systems for implementing a lottery option is the modern metro-rail system (such as those in Washington, D.C. and San Francisco, Calif.). A description of the invention tailored to this type of transportation system is as follows.

FIG. 1 shows a schematic diagram of a current metro-rail fare card selection system, as modified to provide a lottery feature according to this invention. A mechanical device 2 accepts money (bills/coins) currently set up to create a credit balance against which transportation costs are deducted. The amount of money entered appears on an LED display 4. Normally the transaction complete button 10 is pushed and a fare card is issued with the designated credit, and is ejected from the machine by a slot 6. The device is modified to provide a lottery option button 8 which when pushed allows additional money to be inserted to be credited toward the lottery purchase which is entered when the transaction complete button 10 is pushed. The cared is ejected via device slot 6 as before. Only this card now can have a lottery number encoded, along with the information on the amount of additional money added for the lottery wager.

In normal use, the card is inserted in a “turnstile” type machine at the entry and exit stations, and the appropriate fare is deducted and the fare card returned with the new credit balance, based on the entry and exit station and time of day (for rush hour/non-rush hour charges). One variant of the present invention involves a separate redemption machine(s) (located at all stations) which would accept fare cards after the user has exited the station “turnstile” machine. As shown in FIG. 1, the redemption machine has a card reader 12 similar to the selection machine reader/exit device 6, but has an additional feature of returning a winning ticket receipt 18 (if appropriate) as well as a deactivated card return 20. The winning amount is shown on a display LED 16.

An alternative configuration would not need a special selection modification, as shown in FIG. 1 by the lottery option button 8, but would accomplish the lottery selection at the redemption machine, as shown in FIG. 2. Thus, no modification of the fare card is necessary, and winners are selected at the redemption machine based on a frequency formula similar to those used in slot machines.

Another variant of this invention can be used on credit card transactions, as shown in FIG. 3. A typical credit card entry machine (with magnetic reader “swipe slot” 24) and keyboard entry system 22 is shown as currently fielded (or as part of a more complex cash register feature found in department stores). A separate lottery option button 26 is pushed (or a sequence of normal numeric buttons to identify a lottery selection) to indicate the user has elected to make a wager. A random code sequence is appended to the entry which is used for selection of winning wagers. This selection of winners can be done at a central billing site, and the winners notified by mail 28.

A third configuration or variant can be set up when the entry device is a computer 30 on a network, as shown in FIG. 4. The hardware and software is modified to display a lottery option button 32 and wager amount, before the data is forwarded to the merchant. A similar coding process is used to identify a wager with a unique code sequence. Winning entries can be selected at a central site, and winners notified by email 34 or letter 28. It should be noted that similar methods can be used to introduce lottery options to systems involving ticket purchases (movies, shows, etc.) and other transaction systems, and the systems described in this Divisional Application are not intended to limit the scope of this invention.

A specific implementation of the technology to support this lottery concept is provided as follows, using FIGS. 5-6, and is based on modifications of the Cubic Corporation Washington D.C. metro-rail fare card systems (both existing and next generation “go card” systems—reference: WMATA fare card machines built by the Cubic Corporation CTS Group, 5650 Kearny Mesa Road, San Diego, Calif. 92111). Additional data on similar systems have already been referenced earlier in the specification.

FIG. 5 illustrates the hardware components comprising a complete lottery system, using the Washington, D.C. metro-rail as an example. The upper portion of the figure covers a system based on the currently installed magnetic strip fare card machines. An additional machine is shown to implement the lottery capability, which is placed at stations in locations near, but outside, the exit gates so that non-lottery passengers are not delayed in any manner. The fare card 15 recording magnetic media 17 structure 19 is shown on the left, with each line representing a region of magnetization different from the background. A group of lines, each representing a bit, forms a field that contains data from the machine that dispenses the fare card (see FIG. 1.). When a passenger exits the metro-rail, he takes the fare card with remaining value to a lottery machine at the metro-rail station. He can insert the card in the reader 6 and additional money can be added via the bill/change slots 2, and the display/decrement buttons 4. A change cup 5 is also shown. The passenger then enters an identification number (e.g., social security number, phone number, etc.) and pushes the transaction-complete button 10. In a completely electronic system, the data is sent via a modem 9 to the system central computer via telephone lines 11, where the lottery payout can be computed for the revenues collected for the specified lottery period (day, week, etc.). A receipt is issued 7 for the passenger to keep a record of his lottery wager. Of course, simpler systems can be employed, such as having the passenger mail in the fare card or receipt, eliminating the electronic identification step (he can just sign his name and address on the card/receipt).

Planned improvements in the DC metro-rail fare card system will make the lottery option easier, as shown in the bottom half of FIG. 5. The new fare cards work as a miniature computer, as opposed to the “tape recorder” technology currently used. The fare card dispensing machine emits RF radio waves via an antenna 40. This RF signal has a dual purpose; providing power to the electronics on the card, and transmitting data. The energy is received by an antenna on the card 48, and part of it is rectified and used as an energy source 42 to power operation of the card. In addition, there is communications encoding in the RF signal that carries the data to be stored in the card, via a modem 44, a central processing unit (CPU) 50 and a 4 kilobit (4K) memory 46 cache. The fare card just has to be swept past the antenna “button” 40 on the card entry machines, or station “turnstiles”, to record data such as the card value, time of entry/exit from the metro-rail, and reduction in value on exit (i.e., fare paid for the ride). An identification number registered to the purchaser is already on the fare card at the time of purchase by the passenger, and thus the fare selection machine does not “issue” a card, as in the present systems.

The operation of the lottery machine, shown on the right in the figure, is similar to the previous description, except that the electronics communications to the central computer (9, 11) is already available to build into the lottery machine, since they are identical to those installed in the fare card machines 52. In addition, a lot more data storage capability exists on the “go card”, and the passenger does not have to enter an identification number, since one has been assigned to his card and his identity/address has been obtained at card purchase time. The passenger simply enters his lottery wager amount via the functions on the lottery machine, and his “ticket” is electronically registered in the central computer. A receipt is optional, and can be provided to prevent fraud if the card is lost prior to wagering.

FIG. 6 shows a software flow diagram for the lottery machine, which is driven by the machine hardware operations described above and show in FIG. 5. The software processing starts when the “transaction complete” button 10 is activated by the lottery player. A logic pulse triggered by the button is sensed by the standard I/O interrupt software in a CPU module inside the lottery machine, which initiates execution of the software programs. The fare/wager dollar amount is read by another I/O routine that transfers the binary value from local registers to CPU memory (similar process to reading data from a disk I/O drive in a desktop PC). A similar software routine places data from the identification registers (or from the card if a card reader 6 or a “go card” option is employed) into the CPU memory. This data is then retrieved and loaded in a communications buffer built into the CPU-modem interface. Once data transfer is complete the modem initiates a connection with the central fare system computer via telephone lines 11, as directed by the software program, and the data is routed to the central computer. After the communications transfer is completed, the same data is re-loaded into a printer 7 buffer, and an I/O routine makes the digital data available to the printer memory, whereupon the A-to-D converters produce the analog signals to drive an inkjet-type printer (dot matrix class). This results in a printed receipt which is ejected and is kept by the lottery player as a record of his wager.

For the “go card” system, the existing card data stays “all-digital”, and thus no A-to-D converters are necessary for input of existing fare card value, but only for sensing and adding of funds. Also, the “go card” has an identification number stored in its memory, so no lottery player identification input is necessary. It is possible to include this entire process into the normal fare card machines, but this could slow down the system by causing “bottlenecks” at machines caused by passengers deciding how to wager. Tests would be necessary to determine if the money saved by using a single machine outweighed the inconvenience to passengers.

Fare card machines for mass transit systems are described in the literature and patents of the Cubic Corporation Automatic Revenue Collection Group of San Diego, Calif.:

  • PCT/US/92/08892 “Non Contact Fare Card”
  • U.S. Pat. No. 5,612,684 March 1997 Kelly “Mass Transit Inductive Data Communications”.
  • Other patents include:
  • U.S. Pat. No. 3,578,124 May 1971 Flum “Automatic Fare Collecting System”
  • U.S. Pat. No. 3,935,933 February 1976 Tanaka “Automatic Article Vending Machine”
  • U.S. Pat. No. 4,300,042 November 1981 Oldenkamp “Magnetic Stripe Card Author”
  • U.S. Pat. No. 4,532,416 July 1985 Bernstein “Transaction Terminal With Simplified Data Entry”. Slot machine technology is described in the following documents, including those assigned to current manufacturers—WMS Gaming Corporation and predecessor Bally Corporation:
  • U.S. Pat. No. 5,456,465 October 1995 Durham “Method To Determine Payoffs In Reel-Type Slot Machines”
  • U.S. Pat. No. 5,205,555 April 1993 Hamano “Electronic Gaming Machine”.
  • U.S. Pat. No. 4,648,600 March 1987 “Video Slot Machine”.