Title:
SYSTEM, METHOD AND GRAPHIC USER INTERFACE FOR SIMULATED GAMING EXPERIENCE BASED ON FINANCIAL TRANSACTIONS
Kind Code:
A1


Abstract:
A system, method and graphic user interface for providing a user with a simulated gaming experience based on financial transactions has a gaming interface presented to a user who provides, via the gaming interface, a gaming input having a defined cost and a given set of possible returns. A purchase order is then generated on behalf of the user for a set of short-term digital options having substantially the same set of possible returns as the gaming input. When the actual return of the set of digital options of the generated purchase order becomes available, a gaming result is presented to the user via the gaming interface. The gaming result is chosen to have a payout related to the actual return of the set of digital options.



Inventors:
Tirosh, Oren (Ramat Gan, IL)
Application Number:
12/017355
Publication Date:
07/23/2009
Filing Date:
01/22/2008
Assignee:
PIPSTRADE LTD. (Bnei Brak, IL)
Primary Class:
International Classes:
A63F9/24
View Patent Images:



Primary Examiner:
SUHOL, DMITRY
Attorney, Agent or Firm:
Dr. Mark M. Friedman (Ramat Gan, IL)
Claims:
What is claimed is:

1. A method for providing a user with a simulated gaming experience based on financial transactions, the method comprising the steps of: (a) presenting to the user a gaming interface; (b) receiving from the user via said gaming interface a gaming input having a defined cost and a given set of possible returns; (c) generating a purchase order on behalf of the user for a set of short-term digital options having substantially the same set of possible returns as said gaming input; and (d) presenting to the user via said gaming interface a gaming result having a payout related to an actual return of said set of digital options of said generated purchase order.

2. The method of claim 1, wherein said set of digital options are chosen to provide a probability of each possible return similar to probabilities of the corresponding possible returns of said gaming input.

3. The method of claim 1, wherein said set of digital options are based on at least one publicly available, continuously updated underlying financial instrument.

4. The method of claim 3, wherein, during a first period of a day, said set of digital options are based on at least one underlying financial instrument traded in a first region of the world and, during a second period of the day, said set of digital options are based on at least one underlying financial instrument traded in a second region of the world.

5. The method of claim 1, wherein said digital options are over-the-counter options.

6. The method of claim 1, wherein said set of digital options includes a plurality of binary options having differing possible returns based on a common underlying financial instrument, said plurality of binary options having the same expiry time and different thresholds.

7. The method of claim 1, wherein each of said digital options is a binary option with a predefined fixed return ratio between its possible returns and its purchase price.

8. The method of claim 1, wherein said set of digital options are generated dynamically in response to said gaming input.

9. The method of claim 6, wherein said digital options have a lifetime from issue to expiry of less than one minute.

10. The method of claim 1, wherein said set of digital options are selected from a pool of pre-published publicly available options including a plurality of options with successive expiry times separated by periods of less than one minute.

11. The method of claim 1, wherein said gaming interface is configured to receive at least one possible gaming input having at least three different possible returns.

12. The method of claim 1, wherein said gaming interface is a roulette interface, and wherein said gaming input is indicative of a value placed on at least one betting location on said roulette interface.

13. The method of claim 1, wherein said gaming interface is a slot machine interface.

14. The method of claim 1, wherein said gaming interface is configured to present to the user, and to receive gaming inputs corresponding to bets placed in, a game selected from the group consisting of: Craps; Baccarat; Sic Bo; and Keno.

15. The method of claim 1, wherein said gaming interface is configured to present to the user, and to receive gaming inputs corresponding to bets placed in, a game of chance.

16. The method of claim 1, wherein the gaming result presented to the user is selected in an apparently unordered manner from a set of possible gaming results having a payout corresponding to said actual return.

17. The method of claim 1, further comprising providing to the user a trading interface providing information regarding said set of digital options.

18. The method of claim 1 further comprising debiting a financial account of the user the defined cost of the gaming input and crediting to the financial account of the user any return from said set of digital options.

19. A method for providing a user with a simulated gaming experience based on financial transactions, the method comprising the steps of: (a) presenting to the user a roulette gaming interface including a representation of a roulette table having betting locations; (b) receiving from the user via said roulette gaming interface a gaming input indicative of a value placed on at least one of said betting locations, said gaming input having a given set of possible returns according to the rules of roulette; (c) generating a purchase order on behalf of the user for a set of short-term digital options having substantially the same set of possible returns as said gaming input; and (d) presenting to the user via said roulette gaming interface a gaming result having a payout related to an actual return of said set of digital options of said generated purchase order.

20. A method for providing a user with a simulated gaining experience based on financial transactions, the method comprising the steps of (a) presenting to the user a slot machine gaming interface including a representation of a plurality of reels; (b) receiving from the user via said slot machine gaming interface a gaming input indicative of actuation of the slot machine game, said gaming input having a defined cost and a given set of possible returns; (c) generating a purchase order on behalf of the user for a set of short-term digital options having substantially the same set of possible returns as said gaming input; and (d) presenting to the user via said slot machine gaming interface a gaming result having a payout related to an actual return of said set of digital options of said generated purchase order.

21. A system for providing a user with a simulated gaming experience based on financial transactions, the system comprising: (a) a gaming interface operative to receive from the user a gaming input having a defined cost and a given set of possible returns; and (b) a purchase order generator operative to generate a purchase order on behalf of the user for a set of short-term digital options having substantially the same set of possible returns as said gaming input wherein said gaming interface is further operative to present to the user a gaming result having a payout related to an actual return of said set of digital options of said generated purchase order.

22. A computer readable medium having stored thereon computer readable program code for providing a user with a simulated gaming experience based on financial transactions, the program code being operable to: (a) present to the user a gaming interface; (b) receive from the user via said gaming interface a gaming input having a defined cost and a given set of possible returns; (c) generate a purchase order on behalf of the user for a set of short-term digital options having substantially the same set of possible returns as said gaining input; and (d) present to the user via said gaming interface a gaming result having a payout related to an actual return of said set of digital options of said generated purchase order.

23. A method for facilitating financial transactions, the method comprising: (a) presenting to a user a brokerage agreement, said presented brokerage agreement providing that a gaming input received by a gaming user interface be considered authorization to purchase on behalf of said user a set of short-term digital options having substantially the same set of possible returns as the gaming input; (b) receiving via said gaming user interface a user-generated gaming input having a defined cost and a given set of possible returns, thereby authorizing, contingent on acceptance by said user of said brokerage agreement, purchase on behalf of said user of a set of short-term digital options having substantially the same set of possible returns as the gaming input; and (c) presenting via said gaming interface a gaming result having a payout related to an actual return of said purchased set of digital options purchased on behalf of said user.

24. A method for facilitating performance of financial transactions by a user, the method comprising: (a) entering a brokerage agreement, said brokerage agreement providing that a gaming input received by a gaming user interface be considered authorization to purchase on behalf of the user a set of short-term digital options having substantially the same set of possible returns as the gaming input; (b) providing via said gaming user interface a user-generated gaming input having a defined cost and a given set of possible returns, thereby authorizing according to said brokerage agreement purchase of said set of short-term digital options having substantially the same set of possible returns as said gaming input; and (c) receiving via said gaming interface a gaming result having a payout related to an actual return of said purchased set of digital options purchased on behalf of said user.

Description:

FIELD AND BACKGROUND OF THE INVENTION

The present invention relates to a system, method and graphic user interface for providing a user with a simulated gaming experience based on financial transactions.

Internet casinos and similar online gaming services have proven to be a popular form of entertainment and excitement for significant sectors of the public. However, various regulatory limitations have been imposed in many jurisdictions limiting or prohibiting the provision of casino games of chance online.

Although subject to strict regulation of its own, trading on financial markets is not included in such prohibitions. Particularly in transactions dependent upon short term market fluctuations, some financial transactions give a user experience somewhat similar to the aforementioned games of chance in the sense that their outcomes are unpredictable and they offer a possibility of immediate returns. Practically, however, many users are inhibited from entering the financial markets with which they are unfamiliar.

Many attempts have been made to popularize access to financial trading by providing investor tools and “user-friendly” interfaces. In some cases, the performance of financial instruments has been presented in a metaphoric representation, for example, displaying fluctuations in a currency exchange rate as a race between two competitors. Even in such cases, the user still directly selects the details of the financial transaction.

There is therefore a need for a system, method and graphic user interface for providing a user with a simulated gaming experience where a gaming input of a user to a gaming user interface would be interpreted as an order for a corresponding set of financial transactions. It would also be advantageous to provide a system, method and graphic user interface for simulating a game of chance by commuting the possible returns of the game of chance into a financial holding with a similar set of possible returns.

SUMMARY OF THE INVENTION

The present invention is a system, method and graphic user interface for providing a user with a simulated gaming experience based on financial transactions.

According to the teachings of the present invention there is provided, a method for providing a user with a simulated gaming experience based on financial transactions, the method comprising the steps of: (a) presenting to the user a gaming interface; (b) receiving from the user via the gaming interface a gaming input having a defined cost and a given set of possible returns; (c) generating a purchase order on behalf of the user for a set of short-term digital options having substantially the same set of possible returns as the gaming input; and (d) presenting to the user via the gaming interface a gaming result having a payout related to an actual return of the set of digital options of the generated purchase order.

According to a further feature of the present invention, the set of digital options are chosen to provide a probability of each possible return similar to probabilities of the corresponding possible returns of the gaming input.

According to a further feature of the present invention, the set of digital options are based on at least one publicly available, continuously updated underling financial instrument.

According to a further feature of the present invention, during a first period of a day, the set of digital options are based on at least one underlying financial instrument traded in a first region of the world and, during a second period of the day, the set of digital options are based on at least one underlying financial instrument traded in a second region of the world.

According to a further feature of the present invention, the digital options are over-the-counter options.

According to a further feature of the present invention, the set of digital options includes a plurality of binary options having differing possible returns based on a common underlying financial instrument, the plurality of binary options having the same expiry time and different thresholds.

According to a further feature of the present invention, each of the digital options is a binary option with a predefined fixed return ratio between its possible returns and its purchase price.

According to a further feature of the present invention, the set of digital options are generated dynamically in response to the gaining input.

According to a further feature of the present invention, the digital options have a lifetime from issue to expiry of less than one minute.

According to a further feature of the present invention, the set of digital options are selected from a pool of pre-published publicly available options including a plurality of options with successive expiry times separated by periods of less than one minute.

According to a further feature of the present invention, the gaming interface is configured to receive at least one possible gaming input having at least three different possible returns.

According to a further feature of the present invention, the gaming interface is a roulette interface, and wherein the gaming input is indicative of a value placed on at least one betting location on the roulette interface.

According to a further feature of the present invention, the gaming interface is a slot machine interface.

According to a further feature of the present invention, the gaming interface is configured to present to the user, and to receive gaming inputs corresponding to bets placed in, a game selected from the group consisting of: Craps; Baccarat; Sic Bo; and Keno.

According to a further feature of the present invention, the gaming interface is configured to present to the user, and to receive gaming inputs corresponding to bets placed in, a game of chance.

According to a further feature of the present invention, the gaming result presented to the user is selected in an apparently unordered manner from a set of possible gaming results having a payout corresponding to the actual return.

According to a further feature of the present invention, a trading interface providing information regarding the set of digital options is also provided to the user.

According to a further feature of the present invention, a financial account of the user is debited the defined cost of the gaming input and credited any return from the set of digital options.

There is also provided according to the teachings of the present invention, a method for providing a user with a simulated gaming experience based on financial transactions, the method comprising the steps of: (a) presenting to the user a roulette gaming interface including a representation of a roulette table having betting locations; (b) receiving from the user via the roulette gaming interface a gaming input indicative of a value placed on at least one of the betting locations, the gaming input having a given set of possible returns according to the rules of roulette; (c) generating a purchase order on behalf of the user for a set of short-term digital options having substantially the same set of possible returns as the gaming input; and (d) presenting to the user via the roulette gaming interface a gaming result having a payout related to an actual return of the set of digital options of the generated purchase order.

There is also provided according to the teachings of the present invention, a method for providing a user with a simulated gaming experience based on financial transactions, the method comprising the steps of: (a) presenting to the user a slot machine gaming interface including a representation of a plurality of reels; (b) receiving from the user via the slot machine gaming interface a gaming input indicative of actuation of the slot machine game, the gaming input having a defined cost and a given set of possible returns; (c) generating a purchase order on behalf of the user for a set of short-term digital options having substantially the same set of possible returns as the gaming input; and (d) presenting to the user via the slot machine gaming interface a gaming result having a payout related to an actual return of the set of digital options of the generated purchase order.

There is also provided according to the teachings of the present invention, a system for providing a user with a simulated gaming experience based on financial transactions, the system comprising: (a) a gaming interface operative to receive from the user a gaming input having a defined cost and a given set of possible returns; and (b) a purchase order generator operative to generate a purchase order on behalf of the user for a set of short-term digital options having substantially the same set of possible returns as the gaming input, wherein the gaming interface is further operative to present to the user a gaming result having a payout related to an actual return of the set of digital options of the generated purchase order.

There is also provided according to the teachings of the present invention, a computer readable medium having stored thereon computer readable program code for providing a user with a simulated gaining experience based on financial transactions, the program code being operable to: (a) present to the user a gaming interface; (b) receive from the user via the gaming interface a gaming input having a defined cost and a given set of possible returns; (c) generate a purchase order on behalf of the user for a set of short-term digital options having substantially the same set of possible returns as the gaming input; and (d) present to the user via the gaming interface a gaming result having a payout related to an actual return of the set of digital options of the generated purchase order.

There is also provided according to the teachings of the present invention, a method for facilitating financial transactions, the method comprising: (a) presenting to a user a brokerage agreement, the presented brokerage agreement providing that a gaming input received by a gaming user interface be considered authorization to purchase on behalf of the user a set of short-term digital options having substantially the same set of possible returns as the gaming input; (b) receiving via the gaming user interface a user-generated gaming input having a defined cost and a given set of possible returns, thereby authorizing, contingent on acceptance by the user of the brokerage agreement, purchase on behalf of the user of a set of short-term digital options having substantially the same set of possible returns as the gaming input; and (c) presenting via the gaming interface a gaming result having a payout related to an actual return of the purchased set of digital options purchased on behalf of the user.

There is also provided according to the teachings of the present invention, a method for facilitating performance of financial transactions by a user, the method comprising: (a) entering a brokerage agreement, the brokerage agreement providing that a gaming input received by a gaming user interface be considered authorization to purchase on behalf of the user a set of short-term digital options having substantially the same set of possible returns as the gaming input; (b) providing via the gaming user interface a user-generated gaming input having a defined cost and a given set of possible returns, thereby authorizing according to the brokerage agreement purchase of the set of short-term digital options having substantially the same set of possible returns as the gaming input; and (c) receiving via the gaming interface a gaming result having a payout related to an actual return of the purchased set of digital options purchased on behalf of the user.

BRIEF DESCRIPTION OF THE DRAWINGS

The invention is herein described, by way of example only, with reference to the accompanying drawings, wherein:

FIG. 1 is a schematic representation of part of a display from a graphic user interface for implementing a method, constructed and operative according to the teachings of the present invention, illustrating an example of a gaming input;

FIG. 2A is a graph illustrating the set of possible returns of the gaming input of FIG. 1 as a function of the landing location of a ball on a roulette wheel (positions 0-36);

FIG. 2B is a graph equivalent to FIG. 2A in which the results having similar returns are grouped together to construct a probability distribution of returns;

FIG. 3A illustrates a probability function for variations in value of an underlying financial instrument over the term of a short-term option according to the present invention;

FIGS. 3B and 3C illustrate two binary options based on the underlying financial instrument of FIG. 3A used together according to the teachings of the present invention to provide a set of possible returns similar to that of FIG. 2B;

FIG. 4A illustrates the variation in value of the underlying financial instrument over the term of the binary options of FIGS. 3B and 3C, while FIG. 4B is a reproduction of FIG. 3A on the same axes as FIG. 4A;

FIG. 5 is a flow diagram illustrating an implementation of a method, according to the teachings of the present invention, for providing a user with a simulated gaming experience based on financial transactions;

FIG. 6A is a detailed flow diagram of the “Generate Purchase Order” step of FIG. 5;

FIG. 6B is a detailed flow diagram of the “Present Gaming Result” step of FIG. 5;

FIG. 7 is a generalized schematic block diagram of a system, constructed and operative according to the teachings of the present invention, for implementing the method of the present invention;

FIG. 8 is a functional system diagram of the system of FIG. 7; and

FIG. 9 is a block diagram of one preferred client-side implementation of FIGS. 7 and 8.

DESCRIPTION OF THE PREFERRED EMBODIMENTS

The present invention is a system, method and graphic user interface for providing a user with a simulated gaming experience based on financial transactions.

The principles and operation of systems, methods and user interfaces according to the present invention may be better understood with reference to the drawings and the accompanying description.

Referring now to the drawings, by way of an overview, FIGS. 1-4B illustrate various aspects of a preferred implementation of a method according to the present invention for providing a user with a simulated gaming experience based on financial transactions. The method is itself presented as a flow diagram in FIG. 5 and further detailed in FIGS. 6A and 6B. A corresponding system, constructed and operative according to the teachings of the present invention, is presented in FIGS. 7-9.

In general terms, the method of the present invention may be described as follows. A gaming interface is presented to a user who provides, via the gaming interface, a gaming input having a defined cost and a given set of possible returns. A purchase order is then generated on behalf of the user for a set of short-term digital options having substantially the same set of possible returns as the gaming input. When the actual return of the set of digital options of the generated purchase order becomes available, a gaming result is presented to the user via the gaming interface. The gaming result is chosen to have a payout related to the actual return of the set of digital options.

At this stage, it will already be appreciated that the present invention provides a user experience closely paralleling that of an online casino or other game of chance while in fact being based on an engine which performs conventional financial transactions, thereby steering clear of various regulatory or other limitations associated with online gambling. This and other advantages of the present invention will be better understood with reference to the detailed description below.

Definitions

Before addressing the features of the present invention in more detail, it will be helpful to define certain terminology as used herein in the description and claims. Firstly, the term “gaming” is used to designate elements of the system and method of the present invention which are associated with, or appear to be associated with, an online game in which money can be bet and, depending on the result of the game, a return may be won. More particularly, the term “gaming” is used herein to refer primarily to “games of chance”, i.e., in which the outcome results from a process assumed to be random, such as rolling of dice, the dealing of well-shuffled cards, landing of a ball in a roulette wheel or the final position of slot-machine reels. Excluded from “games of chance” in this definition are games based even in part on the skill of the user, or on the performance of a player, an animal or a natural phenomenon. In most preferred cases, the games in question are games generally considered casino games, typically selected from the group consisting of: Roulette, Slot Machines; Craps; Baccarat; Sic Bo; and Keno.

In accordance with the above definition of “gaming”, a “gaming user interface” is a user interface which presents to the user a game, or simulated game, as defined above and allows the user to enter an input related to the game. A “gaming input” is one or more input, of a type suited to the game in questions, which indicates the user's position for the upcoming game and/or the user's intent to take part in, or initiate, the game. In certain cases, such as in a slot machine user interface, the gaming input may be simply a “start” input which starts the next round of the game. In other cases, the gaming input may include the placing of one or more bets on certain particular outcomes of the game.

The “defined cost” of a given gaming input is the payment or cost to which the user obligates himself or herself by submitting the gaming input. Thus, in the case of one or more bets, the defined cost is typically the total value of the bets placed, give or take any additional service charges. In the case of a slot machine, the defined cost will be the fixed cost per round of play. Similarly, the “set of possible returns” is the set of possible payouts which could result from possible outcomes of the game for the given gaming input. The set of possible returns is defined by the rules of the game being played (or rather, simulated), which are typically the standard rules for the corresponding game, but may in certain eases be “house rules”, as is known in the art.

The term “gaming result” is used to refer to an outcome of the game in question. In the context of the present invention, the gaming result is a simulated result that is chosen to correspond to the actual return of the set of digital options. In cases in which there are a plurality of possible outcomes with the corresponding return, one of the appropriate outcomes is preferably chosen in an apparently unordered manner. The phrase “apparently unordered manner” is used herein to refer to any manner of selecting an outcome which would offer the user a plausible impression of a random game result. Thus, the unordered manner may in fact be a random or pseudo-random selection amongst the group of suitable equivalent outcomes, or may be selected according to some arbitrary non-sequential order.

In the financial transaction aspect of the invention, reference is made to “digital options.” The term “digital option” is used to refer to an option in which the values of the possible returns are predefined at the time of purchase of the option. The most common digital option is a “binary option” in which the return is either zero or a fixed sum, although the term “digital option” is used more broadly to encompass the possibility of three or more predefined possible returns. The digital options employed by the present invention may be exchange-traded options or over-the-counter options. Even in the case of over-the-counter options, the options may be registered securities.

The digital options employed by the present invention are typically based on at least one publicly available, continuously updated underlying financial instrument. The phrase “financial instrument” is used herein to refer to any financial instrument on which an option can be based including, but not limited to, any one or combination of: an index; a single stock; a bond; a currency exchange rate; a commodity price; other traded securities such as future contracts, options, etc.; or a specially defined non-traded index based on any combination of other financial instruments. Digital options based on non-financial variables also fall within the general scope of the present invention, although in most circumstances they are less practical.

The phrase “publicly available” is used herein to denote a financial instrument about which information is available via channels of information available to the public. This includes information from any source, whether freely available or available only through commercial subscription information suppliers or other specialized sources. The phrase “continuously updated” is used to refer to information which is updated at intervals of no more than about 1 minute, and with a delay of no more than about 1 minute. In many cases, real-time financial data is available with updates at intervals of no more than about 10 seconds and minimal delay behind real-time market values.

When reference is made to “short-term” options, this refers to options having a period of less than one day between sale and expiration, and preferably less than one day between issue and expiration. In certain implementations, as will be discussed below, the present invention may employ super-short-term options for which the entire lifetime from issue to expiry is less than one minute.

Details of Method

Turning now to the features of the present invention in more detail, FIG. 5 illustrates the main steps of a method, generally designated 10, according to the teachings of the present invention. In most cases, a first step of method 10, performed prior to a first use of the system, is setting up of a brokerage agreement (step 12) between the user and the service supplier. Since the inputs of the user during operation of the system are essentially gaming inputs given in the context of a gaming user interface, prior authorization is typically needed in order to empower the service provider to commute the gaming inputs into corresponding financial transactions and to perform a binding set of financial transactions on behalf of the user.

Then, at step 14, a gaming interface is presented to the user through which the user provides a gaming input (step 16) as defined above. Then, at step 18, the gaming input is commuted into a purchase order on behalf of the user for a set of short-term digital options having substantially the same set of possible returns as the gaming input, and the purchase order is implemented (step 20). The purchase order implementation is typically either by allocating to the user digital options according to the purchase order which were issued by the service provider, or by transmitting the purchase order to an external issuer of options. On expiry of the set of digital options, the actual return is evaluated (step 22) and a corresponding gaming result is presented to the user via the gaming interface (step 24).

One particularly preferred but non-limiting implementation of step 18 is illustrated in FIG. 6A. Specifically, the system first calculates all possible outcomes of the game round according to the particular gaming input supplied (step 26). Outcomes having the same financial value are grouped together (step 28), and may optionally be sorted, for example into ascending order of payout (step 30). For each group, a purchase order is generated (step 32) for an option having a possible return equal to the difference in value between the previous value of return and the current group. This procedure will be further understood with reference to a specific example, as will be set out below.

One particularly preferred but non-limiting implementation of step 24 is illustrated in FIG. 6B. Specifically, at step 34, the system identifies the group of outcomes from step 28 which share a financial value corresponding to the actual return of the set of digital options after expiry. Where more than one gaming outcome corresponds to the actual return of the set of digital options, one of the appropriate outcomes is selected in an apparently unordered manner (step 36) for display on the gaming user interface.

Example: Roulette

The invention may be better understood with reference to the following specific example of a Roulette gaming interface. FIG. 1 shows schematically a part of a Roulette gaming user interface, namely, a display of a Roulette table for receiving bets placed in a round of Roulette. In this case, the user's gaming input is indicative of a value placed on at least one betting location on the roulette interface. In the example illustrated here, the user has placed a five dollar chip on “ODD” and a ten dollar chip on number “7”.

FIG. 2A depicts the payout for all possible game outcomes (i.e., the ball falling on each value from “0” through “36”). Thus, if the ball falls on “0”, no payout is due (i.e., zero return). If it falls on “1”, a 2:1 return is due on the $5 only, namely, a $10 return. On “2”, zero payout is due. On “3”, $10 is due, and so on. If the ball lands on “7”, payment is due on $10 at 36:1 plus the $5 at 2:1, giving a total of $370.

FIG. 2B shows the same set of possible outcomes as FIG. 2A rearranged so as to group together outcomes with the same payout. In the case illustrated here, the groups are arranged in ascending order of payout, although this is not critical. The proportional number of outcomes resulting in each value of payout corresponds to the probability of that payout.

FIG. 3A illustrates a probability distribution for variations in an underlying financial instrument over the time period set for a digital option. FIG. 3B illustrates the corresponding return function of an Option “A” according to which a $5 option pays out $10 if the underlying financial instrument ends up outside the range of −X to X, and zero if it remains within that range. Option “B” is a second option based on the same underlying variable according to which a $10 pays out $360 if the underlying financial instrument ends up outside the range of −Y to Y, and zero if it remains within that range. The overall set of possible returns thus parallels the possible returns of the game input as illustrated in FIG. 2B.

FIG. 4A illustrates the actual variation of the value of the underlying financial instrument over the period of Options A and B, and shows a value on expiry which lies between −X and −Y. As a result, Option “A” ends up “in the money”, paying out $10, while Option “B” ends up “out of the money” and returns nothing. Referring back to FIG. 2B, the actual return of the set of digital options, namely, a $10 payout, corresponds to the set of outcomes in which the Roulette ball falls on an odd number other than “7”. One such outcome, for example, falling on “19”, is then chosen for presentation to the user. This result is typically presented in the context of a graphic display depicting the occurrence of the selected gaming outcome. The debit or credit is then performed to the user account, which may either be administered by the service provider or by an independent banking or other financial institution. The debit or credit may be performed immediately, or may be implemented at the end of a session.

In the above example, it will be noted that the outcomes of the different options are interdependent, reflecting the particular situation in the game; a result of “7” is always also an “odd” result. In such circumstances, nesting of multiple options using a single underlying variable and having the same expiry times is intuitively appropriate. By following the aforementioned procedure of grouping all possible outcomes in order of payout, it is typically possible to construct suitable sets of digital options based on a single underlying variable for all situations. Nevertheless, in certain cases where two or more independent variables are involved in the game represented by the gaming interface, implementations employing options based on more than one independent underlying variable may be used.

Option Types and Pricing

As stated, the preferred implementation of the present invention uses digital options to provide a set of possible returns substantially the same as the possible returns of the gaming input. The digital options employed may be of substantially any type which provides the required pre-defined set of possible returns. Particularly preferred are European cash-or-nothing binary options.

The option type and strike price(s) or threshold(s) typically determine a range of prices within which the price of the underlying instrument should be at the time of option expiration for the option to be considered in-the-money. Depending on option type, the price of the underlying must be above a strike price, below a strike price, within a range defined by two prices or outside of such a range. In certain cases, other types of thresholds may be employed, such as, for example, barrier options where the outcome depends not only on the final value of the underlying instrument but on whether a threshold was exceeded during the entire lifetime of the option.

Offered Options may have their strike prices defined as a move of the price relative to the quoted price at the time the option is purchased rather than an absolute value. Similarly, the expiration time is preferably defined as an interval relative to the time of purchase.

In order to be offered to the public in the US, the options are preferably registered securities and a prospectus of the options is filed with the Securities & Exchange Commission (SEC). While exchange-traded options are always registered securities, over-the-counter options are typically unregistered since they are considered a private placement. Certain preferred implementations of the present invention employ a combination of an over-the-counter option which is registered and offered to the public. Over-the-counter options are a direct contract between two parties and do not require a broker or exchange as an intermediary.

The system is described here as publishing or offering the options in advance. This may or may not be required for compliance with current regulatory requirements. A system with generally equivalent functionality may be described as generating or writing customized options in response to the client requests. If a pre-published prospectus is required, any customization is performed within the parameters defined in the prospectus as published.

A further distinctive feature of preferred digital options for implementation of the present invention is that they exhibit a predefined fixed return ratio between its possible returns and its purchase price. In other words, unlike the conventional approach according to which the strike price and the possible returns of the digital option are fixed and the price varies, preferred digital options according to the present invention have predefined returns and a fixed price, thereby defining fixed return ratios. The strike price is the remaining available variable which is preferably chosen in order to make the fixed purchase price a fair price (to be discussed below) and/or to provide a probability of each possible return similar to probabilities of the corresponding possible returns of the gaming input.

In order to determine a fair strike price (or threshold/range according to the type of option), an option pricing model is used. An option pricing model is a mathematical relationship between the attributes describing of the option contract (time, strike price, etc) and its estimated fair market value. Any conventional option pricing model may be used. One popular non-limiting example is the Black-Scholes option pricing model. The pricing model is usually employed in order to determine the market value. However, in the present invention, the system preferably employs the model “in reverse” to calculate the option parameters (specifically, the strike price) required to make the predefined fixed price of the offered option into a fair market price.

The equations describing the model may be solved (analytically or numerically) for the option strike price as a function of return. Alternatively, reversing the model may be as simple as applying it the conventional manner (forward) for multiple strike prices and choosing the strike price where the resulting price most closely matches the desired fixed price for the option yielding the desired return.

In order to provide a dynamic gaming effect, the period between placing of the gaming input and receipt of the gaming result must be kept short, typically to less than one minute, and most preferably, less than half a minute. In order to render the synthesized gaming experience readily available on demand, it is necessary to make available suitable digital options with closely spaced expiry times. In most cases, suitable exchange traded options are not likely to be available at sufficient frequency, even if they were to match the needs of the present invention in other respects. For this reason, over-the-counter options are preferred.

There are typically two approaches to providing the required digital options. According to a first approach, the set of digital options are generated dynamically in response to the gaming input. In this case, the digital options preferably have a lifetime from issue to expiry of less than one minute. Alternatively, in certain cases, it may be preferable to provide a pool of pre-published publicly available options including a plurality of options with successive expiry times separated by periods of less than one minute. Suitable digital options are then selected from this pool on the basis of each gaming input.

As discussed above, the short-term digital options are preferably based on short-term variations in an underlying financial instrument. Since the various markets have limited trading hours, each underlying financial instrument typically has dead-time during which there are no real-time updates as to the value of the instrument. In order to provide the simulated gaming experience of the present invention over extended hours of the day (beyond the trading hours of any one market), certain preferred implementations of the invention are such that, during a first period of a day, the set of digital options are based on at least one underlying financial instrument traded in a first region of the world and, during a second period of the day, the set of digital options are based on at least one underlying financial instrument traded in a second region of the world. By switching choice of underlying financial instrument, it is possible to operate the system of the present invention effectively around the clock.

System Description

Turning now to FIGS. 7-9, there is shown a system, generally designated 100, constructed and operative according to the teachings of the present invention, for implementing the method of the present invention.

Referring first to FIG. 7, in general terms, the system of the present invention includes a client computer 102 including a processor 102a and memory storage 102b, and a server computer 104 including a processor 104a and memory storage 104b. Client computer 102 and server computer 104 are interconnected for data communication via a wide area network such as Internet 106. One or both of client computer 102 and server computer 104 are also interconnected, directly or indirectly, to a source of information about financial markets 108, which may be a service provided by a financial market directly or any data feed provider which provides time-varying signals representing the price fluctuations of instruments traded in one or more market.

Each of computers 102 and 104 may be implemented as one or more device of any type of computer capable of performing at least a subset of the recited functions. Examples of suitable computers include, but are not limited to: desktop computers; notebook computers; mobile telephones and PDA's.

A functional overall representation of system 100 is illustrated in FIG. 8. Here, system 100 is seen to include a gaming user interface 110 which typically provides the simulated gaming display, receives gaming inputs from the user, and presents to the user a gaming result. Gaming user interface may also include additional components for implementing an initial user brokerage agreement authorizing purchase of digital options based upon a gaming input, and may provide additional user tools and/or a direct access financial transaction interface in parallel to, or as a switchable replacement for, the gaming interface. A purchase order generator 112 typically provides the functions of commuting the gaming input into a purchase order for a corresponding set of digital options with substantially the same possible returns as the gaming input. A purchase engine 114 typically implements the purchase order generated by purchase order generator 112, either by transmitting the purchase order to an external issuer of the digital options (e.g., to an electronic address of a brokerage house) or by directly implementing the sale if the service provider is also the issuer of the options.

Each of these system components can be implemented in any combination of software and hardware. In one non-limiting embodiment, the gaming interface includes one or more web component (for example, .html, Javascript, plug-ins, ActiveX, etc.). The implementation of any component may be on the server side, the client side or any combination thereof.

Turning now to FIG. 9, this illustrates a particularly preferred client-side implementation of the present invention in which gaming user interface 110 and purchase order generator 112 are implemented primarily as dedicated software running on client computer 102. The client side software in this case preferably performs some or all of the following functions:

    • Connect to server 104 via data network 106;
    • Identify and authenticate client identity;
    • Receive details of published Options from server 104;
    • Accept commands from user with a variety of User Interfaces;
    • Convert user gaming inputs into a request to the server for an Option or set of Options;
    • Receive acknowledgment and status messages and convert them for display in the User Interface; and
    • Facilitate registration within the system, and deposit and withdrawal of funds to and from accounts.

In this case, there is also illustrated a preferred option according to which the system includes a trading interface 116 which provides directly to the user information regarding the set of digital options, and may allow direct performance of option purchases and/or other financial transactions by the user. Trading interface 116 may be provided in parallel to, or as a switchable alternative to, gaming user interface 110.

It is noted that any of the embodiments described above may further include receiving, sending or storing instructions and/or data that implement the operations described above in conjunction with the figures upon a computer readable medium. Generally speaking, a computer readable medium may include storage media or memory media such as magnetic or flash or optical media, e.g. disk or CD-ROM, volatile or non-volatile media such as RAM, ROM, etc. as well as transmission media or signals such as electrical, electromagnetic or digital signals conveyed via a communication medium such as network and/or wireless links.

It will be appreciated that the above descriptions are intended only to serve as examples, and that many other embodiments are possible within the scope of the present invention as defined in the appended claims.