Scientific Games Sues G-Tech
(Texas' Two Largest Lottery Vendors At War!)

Posted: Wednesday, May 11, 2005

Editorial by Dawn Nettles below the news story.


Lawsuit Claims Unlawful Use of Group Participation Multiplier Patents

NEW YORK, MAY 9, 2005 -- SCIENTIFIC GAMES CORPORATION (NASDAQ: SGMS) announced that its wholly-owned subsidiary, Scientific Games Royalty Corporation, has filed a patent infringement lawsuit in the Federal District Court in Delaware against GTECH Corporation (NYSE: GTK). The lawsuit concerns the enforcement of Scientific Games' group
participation multiplier patents, U.S. Patent Nos. 6,648,753 and 6,692,354 and GTECH's unauthorized and illegal use of same including its use of the patents in the Rhode Island Lottery's Powerball Power Play and Keno Plus games.

Lorne Weil, Scientific Games' chairman and CEO, said, "It is our intention to vigorously protect our intellectual property whenever necessary. Many lotteries, the Multi-State Lottery Association and International Game Technology have already signed license agreements concerning these patents in recognition of our legal rights and it is time for GTECH to do so."

The patents apply to online lottery games that have an optional bonus wager as a feature of the game. In the event that a player wins a prize in the base game and has opted to make the bonus wager, all of the player's prizes in the base game, with the exception of the jackpot amount, may be multiplied by a randomly selected multiplier.

Editorial by Dawn Nettles
It is my opinion that this lawsuit is long overdue.
Here's why and here's how Texas is involved
from a morale or integrity stand point.

A little history first ... Powerball originally obtained permission
from the Oregon Lottery to use their PowerPlay idea/concept -
for the Powerball game. You see, back in the 80's, the Oregon
Lottery offered a game, called PowerPlay, where for an extra
dollar, a player could receive 4 times his prize amount.
But Powerball enhanced the idea/concept to include
offering "2, 3, 4 or 5 times the prize amount" for that extra
dollar - not just 4 times the amount like Oregon had done.

After introducing PowerPlay, Powerball was contacted by
someone who actually owned a trademark on the words
"PowerPlay." So Powerball bought the trademark so
they could use the name legally. An honorable thing to do.

Then unbeknownst to Powerball, in the 90's a man from Idaho filed
for a "patent" for randomly determining a multiplier number. He received
the patent as he was the first person to file. Eventually Scientific Games
learned that this patent existed - they either inherited it through
one of their mergers/buy outs or they bought the patent.

Whatever the case, Powerball was faced with another obstacle
for their PowerPlay game. They worked out a deal with Scientific
Games so they could continue with their PowerPlay game legally.

By the way, all of this occurred before lotteries were buying
copyrights, trademarks and patenting their games and ideas.
At that time, everybody was operating on "integrity" - thinking
no "state" would "steal" their ideas.

Powerballs actions certainly proved that they operate
with integrity because as soon as they learned of each
situation, they did the honorable thing.

Anyway, to continue about Texas. A very important factor in
this scenario that you need to keep in mind
... Powerball has always
used the word "multiplier" to explain their PowerPlay game.

Now comes the Texas Lottery. When Texas joined Mega Millions,
the Texas Lottery started the new game - "Megaplier" - which
was to be played with "Mega Millions." Texas chose Mega Millions
over Powerball as the multi-state game to join but Texas wanted
the Mega Millions group to offer Powerballs features - But the
MM group refused so Texas went it alone.

OK - so Texas takes Powerballs idea and uses it. But
then do you know what Texas did next to add insult to injury?

Texas had the audacity to enter their so-called "new idea" in a
yearly event hoping to receive an award. Texas "claimed" it was
"an original revenue enhancing idea" that Texas came up with.
Clearly this was NOT an original idea.

PGRI Magazine actually presented the Texas Lottery with an award for
putting “smart ideas" to work for the "successful development" of the
Megaplier game. "Smart Ideas" was sponsored by PGRI Magazine.

The Texas Lottery issued a press release regarding their award and
Director Greer was quoted as saying, “It is a special honor to
be recognized by one’s peers in such a unique industry.”

The magazines publisher claims he thought the idea was “an
original lottery revenue generator created by Texas." This
magazine is an industry magazine yet they want people to
believe that they were unaware of Powerballs PowerPlay game?

Also, as is tradition, every lottery who submitted an idea received
an “award.” In essence, the TLC PAID to enter and/or go to
“Smart Ideas” and that money BOUGHT them this “award.”
What a way to spend taxpayer money!

It is my opinion, the Texas Lottery plagiarized Powerball.

According to Charles Strutt with MUSL (Powerball) ... "Texas
has had no discussions regarding their Megaplier option."

The Texas Lottery never asked for permission to use -
nor paid for the use of - Powerballs PowerPlay game concept.

As for Scientific Games owning the patent, I have made an open
records request to find out when and how much that cost the
TLC. That is, IF the TLC ever even obtained permission from
Scientific Games to use the concept.

It is apparent by the lawsuit that G-Tech didn't
obtain permission or offer to pay for its use either.

What I really find interesting regarding the actions of the
TLC ... 3 1/2 years ago they tried to bully fellow web site
owners out of their domain names claiming copyright
infringements. Yet those web site owners had their names
and sites long before the Texas Lottery ever had a web site.
BUT ... the TLC had knowledge regarding purchasing domain
names but never bothered to buy the names they sought to
forceably take from these people.

Maybe this is why TX lottery terminals don't give Megaplier results.
The TLC has refused to provide this information via the terminals
since the start of the game - a very bad thing for a state to do.
If we ever get consumer protection, I would hope that this
would be a violation of some Texas law.

Also it is my opinion that the Texas Lottery staff was NOT very
creative in naming its new game. They literally took "Mega" from
Mega Millions then took the phrase "plier" from Powerballs
word "multiplier" and put it together to come up with "Megaplier."
Me, I would have called it something fun like "ExtraLoot" or
"MoreLoot" or "BonusLoot." I could go on but I won't!

There's only one good aspect to all of this ...
I own the domain name - - and a group of players
supposedly own the domain name - I can't speak
for, but I recently received a very hefty offer
from folks wanting to buy I didn't sell.
Good for me!

By the way, the Texas Lottery had 6 months to buy
the domain name before I finally bought it. I bought it
because I felt that other states would be offering Megaplier
and this will be the domain where I will track results, sales,
winnings and losses for the People in all the states. It will
compliment my Lotto Report web site. Obviously the TLC
nor the Mega Millions group wanted the name or they
would have bought it in the first place.

Attention Texas Players - Act Now!
Also included on this page are more winners
stories including two stories regarding
computer glitches. May 13, 2005. Click here.

The Lotto Report
Dawn Nettles
P. O. Box 495033
Garland, Texas 75049-5033
(972) 686-0660
(972) 681-1048 Fax

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