Why adopt that business model? Presumably, because it allows PurePlay to argue that it does not offer a gambling service. Specifically, PurePlay could claim that, because the amount players win has no relation to how much they stake, it dodges the “consideration” element of the legal definition of gambling. Query whether that claim would survive the devoted attentions of a prosecutor and court. I set that question aside, though, and here focus on PurePlay’s claim that they have patented their business model.

Curious about the scope of PurePlay’s patent, I searched its website for details. It offered none. I wrote to PurePlay asking for the patent’s number. PurePlay refused to say. So I put my able research assistant, Mr. Sherwood Tung, on the case. He found PurePlay’s patent, and more.

MMJK Inc., an entity located in San Francisco, California, owns PurePlay. It holds U.S. patent # 7,094,154. The Patentscope database of the World Intellectual Property Organization indicates that MMJK has also sought similar patent protection in many foreign countries. The patent’s abstract reads thusly:

A computer networked, multi-user game system utilizing subscription based membership and alternative methods of entry, as well as the award of prizes of immediate value to the winner is described. A game tournament is hosted by a game server computer coupled to client computers operated by participating players. The games offered are games that involve elements of both skill and chance and require active player participation and decision making. A subscription-based membership is established for each player by charging a fee for a pre-determined membership time period. An alternative method of entry is provided to allow non-subscription players to participate in the tournament without payment of the fee. The non-subscribing players receive equal access to the games and at least the same chance of winning as the subscribing players, but are limited to a single entry per game or tournament. The game server hosts at least one game or tournament within the period, and players are potentially eliminated until a winning player and any runner-up players are determined. A prize pool is disbursed to the winning players in the form of cash, cash-equivalent notes, or prizes that have inherent and immediate value.

That of course offers only a shorthand description of the patent. You must carefully read its claims to know its actual scope. Or, I should say, its supposed scope; any patent can fall to a legal challenge, and business method patents prove especially susceptible to failing “non-obvious” inquiries.

[Crossposted to Agoraphilia and The Technology Liberation Front.]

Lefteris Pitarakis / AP

—

Via mister Niall O’Connor, BBC News:

The object of the conspiracy was to wager large amounts of money on a particular horse to lose in each of those races while knowing that the jockey was prepared, if necessary, to cheat by stopping the horse.

Jonathan Caplan QC, prosecuting, explained to jurors how internet betting exchanges worked. He told them:

Betfair is one of the leading betting exchanges on the internet. In order to use it and place bets you must first open an account by registering. Customers will then be given a username and secure password. You can place bets by telephone but most betting is performed online on the internet. You must first deposit sufficient funds to cover the bet or bets that you wish to make. Betfair operates in a different way to a traditional bookmaker.

Mr Caplan said the main differences [between BetFair and the bookmakers] were:

1. That the customer does not bet directly with Betfair. Betfair is a commission agent which connects gamblers with opposing views on the outcome of a sporting event. It will only accept a bet if it is matched by another customer and it uses technology to match bets instantaneously. If the bet is large then it is likely that it will be matched with multiple counterparties.
2. That Betfair is a no-risk “bookmaker”. It makes a guaranteed profit by taking a commission from the winner’s net winnings. The commission varies between 2% and 5%.
3. That although wagers can be placed on the telephone, most of Betfair’s business occurs on the internet. Customers must have sufficient funds to deposit in their account to cover the bet. Usually these are deposited via a credit card.
4. That with Betfair a customer can “lay” or place a horse as well as back it to win or each way.
5. That Betfair’s odds are decimal (eg 4.1) and not fractions (eg 6-4) so 4.1 means that for every pound staked you receive a return of £4.10 which includes the pound stake. The decimal equivalent, therefore, of 2-1 is 3.0.
6. That Betfair’s market is a free market in that the prices are not controlled by the bookmaker.

More from The Financial Times.

The key to it all is the issue of reasonable doubt. Fitzgerald has to convince all the jurors that Libby is guilty beyond a reasonable doubt on at least one of the charges. The defense has to meet a lesser standard; all it must do is convince jurors that there exist reasonable doubts about the prosecutor’s case. Given the series of memory lapses, changed testimony, and conflicting stories that have been presented in the courtroom, that is something the jury has had plenty of chances to believe.

Previous: Scooter Libby Trial: InTrade Probabilities vs. Tom Maguire’s Insights