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`Page 1
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`---------------------------
`Game Show Network, LLC and
`WorldWinner.com, Inc.,
` Petitioners,
` vs.
`Patent Owner of
`U.S. Patent 6,174,237
`to Stephenson
`--------------------------
`
` Case IPR2013-00289
`
` VIDEOTAPED DEPOSITION OF
` STACY FRIEDMAN
` April 11, 2014
` 9:00 a.m.
`
` REPORTED BY: Kathy L. Stewart
`
`877-489-0367
`
`MERRILL CORPORATION
`www.merrillcorp.com/law
`
`Game Show Network Ex. 1020
`IPR2013-00289
`
`
`
`STACY FRIEDMAN 4/11/2014
`
`Page 2
`
` The Videotaped Deposition of Stacy
`Friedman, taken pursuant to Notice of Taking
`Deposition, taken before Kathy L. Stewart, a
`Notary Public in and for the County of
`Hennepin, State of Minnesota, taken on
`April 11, 2014, at Merchant & Gould, located
`at 80 S. 8th Street, Suite 3200,
`Minneapolis, Minnesota, commencing at
`approximately 9:00 a.m.
`
`APPEARANCES:
`
` TED CANNON, Attorney at Law, of the Law
`Firm KNOBBE, MARTENS, OLSON & BEAR, 10100
`Santa Monica Boulevard, Suite 1600, Los
`Angeles, California 90067, appeared for and
`on behalf of the Petitioner.
`E-mail: Ted.Cannon@knobbe.com
`Telephone: 952.721.2897
` THOMAS LEACH, Attorney at Law, of the
`Law Firm MERCHANT & GOULD, 80 S. 8th Street,
`Suite 3200, Minneapolis, Minnesota 55042,
`appeared for and on behalf of the
`Respondent.
`E-mail: Tleach@merchantgould.com
`Telephone: 612.336.4703
`Also Present: Mark Haskins, Videographer
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`STACY FRIEDMAN 4/11/2014
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`Page 3
`
` INDEX
` PAGE
`EXAMINATION BY:
`Mr. Cannon......................... 5
`Mr. Leach.......................... 198
`Mr. Cannon......................... 210
`
` PREVIOUSLY MARKED EXHIBITS REFERENCED
`Exhibit 1009
`Exhibit 1011
`Exhibit 1012
`Exhibit 1013
`Exhibit 1014
`Exhibit 1018
`Exhibit 1019
`Exhibit 2002
`Exhibit 2007
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`STACY FRIEDMAN 4/11/2014
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`Page 4
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` VIDEOGRAPHER: This is tape
`number 1 of the videotaped deposition of
`Stacy Friedman, taken by Game Show Network
`and Worldwinner.com, Inc., in the matter of
`Game Show Network, LLC and Worldwinner.com,
`Inc., vs. Patent owner of U.S. Patent
`6,174,273 [sic] to Stephenson in the
`United States Patent and Trademark Office,
`Case Number IRR2013-00289 [sic].
` This deposition is being held at
`the offices of Merchant & Gould, 3200 IDS
`Center, 80 South Eighth Street, Minneapolis,
`Minnesota 55402. The time is approximately
`9:08 a.m.
` My name is Mark C. Haskins. I am
`the legal videographer from Digital Evidence
`Group. The court reporter is Kathy Stewart.
` Will counsel please introduce
`themselves for the record, after which the
`court reporter will swear in the witness.
` MR. CANNON: I am Ted Cannon of
`Knobbe, Martens, Olson & Bear. I represent
`the Petitioners, Game Show Network and
`Worldwinner.com.
` MR. LEACH: Tom Leach with Merchant
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`STACY FRIEDMAN 4/11/2014
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`Page 5
` & Gould, and I represent John Stephenson,
` the patent owner.
`
` STACY FRIEDMAN,
` called as a witness, was duly sworn and
` testified as follows:
`
` EXAMINATION
` BY MR. CANNON:
`Q. Good morning, Mr. Friedman.
`A. Good morning.
`Q. Will you please state your full legal name
` for the record.
`A. Stacy Aaron Friedman.
`Q. And have you been deposed before?
`A. I have.
`Q. How many times?
`A. Somewhere in the vicinity of four, five.
`Q. And so are you familiar with the general way
` that depositions are conducted?
`A. Generally, yes.
`Q. What have you done to prepare for this
` deposition today?
`A. Pardon me. I reread my declaration that I
` submitted a few months back. I reread the
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`STACY FRIEDMAN 4/11/2014
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`Page 6
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` patent and the Walker reference, and I
` reread several of the filings that the
` attorneys have made in this case.
`Q. And about how much time did you spend
` preparing for your deposition?
`A. Just preparing or in total?
`Q. Just -- we will start with preparing for the
` deposition.
`A. A few days.
`Q. And how long -- how much time did you spend
` preparing your declaration?
`A. About a week and a half.
`Q. And how long in terms of hours?
`A. Oh, sorry, I was talking -- yeah, about 60.
`Q. Okay. And did you prepare the first draft
` of your declaration?
`A. I prepared significant parts of the actual
` substance.
`Q. Okay. And what did you do in preparing?
` Did you type it in to a word processor or
` did somebody else do that?
`A. Well, so -- excuse me. I provided the first
` draft of the opinions that I was laying out.
` Counsel provided the legal
` statement of obviousness, anticipation,
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`STACY FRIEDMAN 4/11/2014
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`Page 7
` those sorts of things, and then I believe I
` took my Background section from a report I
` had previously done just to save time.
`Q. All right. I am going to hand you Exhibit
` 2007. Do you recognize this document?
`A. I do.
`Q. And what is this document?
`A. This appears to be the declaration that I
` filed.
`Q. Okay. And at the end of the document there
` is two attached exhibits, one starting after
` page 53, Exhibit A.
`A. Was that a question?
`Q. No.
` Do you see Exhibit A?
`A. I do.
`Q. And is that a -- is that your CV?
`A. It is my CV, yes.
`Q. And is this CV complete at this time?
`A. I have done a few extra things in the months
` that -- between the time -- between now and
` the time that I filed this, but it's mostly
` complete, yes.
`Q. And what other things have you done that you
` would put on your CV?
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`STACY FRIEDMAN 4/11/2014
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`A. An additional case or two.
`Q. Okay. And what, in general, was the subject
` matter of those cases?
`A. One was a patent infringement that then
` settled, and I think that might have -- I
` think there might have just been one.
`Q. All right. Let's turn to Exhibit B, which
` is entitled Materials Considered by Stacy
` Friedman.
` Do you see that page?
`A. I do.
`Q. And is this a complete list of the materials
` that you considered in preparing your
` declaration?
`A. It is.
`Q. Have you considered any other materials
` since preparing your declaration in
` connection with this case?
`A. I have, yes.
`Q. What other materials have you considered?
`A. Primarily, the -- well, after this was filed
` I read the filing that counsel did that used
` this; I can't remember the name of that
` document, but whatever it was that was
` submitted.
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`STACY FRIEDMAN 4/11/2014
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`Page 9
` And additionally, I further looked
` at the Encyclopedia of Card Games, I think
` it's called, by John Scarne.
`Q. Okay. And so was it your understanding that
` your declaration was submitted to the patent
` office in a filing to the patent office?
`A. Yes, that is my understanding.
`Q. And is it your understanding that that was a
` response to the petition in this case?
`A. Well, I am not sure about the legal
` processes involved, but it's my
` understanding that my declaration was
` testimony on the record to be used by
` counsel in the back and forth process.
`Q. All right. I am going to go through some
` questions related to the declaration. As I
` go through these questions, if there is any
` questions that you don't understand or that
` you need me to repeat, would you please
` indicate that you need clarification?
`A. I will.
`Q. And if you don't indicate that you need
` clarification, can I assume that you
` understand the question?
`A. You may.
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`STACY FRIEDMAN 4/11/2014
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`Page 10
`Q. At some parts during this deposition there
` may be objections interposed by counsel.
` Do you understand that?
`A. I do understand that.
`Q. And do you understand that those objections,
` unless there is an instruction not to
` answer, are merely entered for the record
` and that you will still be required to
` answer the question?
`A. I will have to take your word for that.
`Q. And is there any reason, sitting here today,
` that you believe that you would have
` difficulty answering the questions fully and
` completely today?
`A. No.
`Q. No, no medications or illnesses or anything
` like that that would make answering
` difficult?
`A. Well, I am recovering from a cold I picked
` up on an airplane a few days ago, but if you
` bear with me, I will be okay.
`Q. Okay. All right. I would like to turn to
` your declaration, and specifically,
` paragraph 3.
` Paragraph 3, the second sentence,
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` says "In that capacity, I have consulted in
` the gaming industry regarding, among other
` things, game design and development, slot
` machine and table game mathematics, gaming
` software development, and gaming patent
` infringement and validity."
` What is meant by the term "gaming
` industry"?
`A. What I mean by the term "gaming industry" is
` the wagering or casino gaming industry, or
` wagering more broadly than just casinos.
`Q. And so is that term specific to casinos or
` is it more general to computer gaming, in
` general?
`A. The term, itself, is used by both
` industries, but -- and there is some
` convergence, but typically, they are two
` separate industries: On the one hand,
` wagering for money in some form; and on the
` other hand, computer games, in general.
`Q. And as used in your declaration, you are
` referring specifically to the casino gaming
` industry?
` MR. LEACH: Object to form.
` THE WITNESS: As used here, I am
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`STACY FRIEDMAN 4/11/2014
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`Page 12
` referring to the casino industry. I would
` have to -- if you pointed out another
` reference, I could address that.
` BY MR. CANNON:
`Q. When you refer to "game design and
` development," does that include computer
` or -- computer-implemented game design?
`A. Yes.
`Q. Have you also worked on game design that
` would not be considered a
` computer-implemented game?
` MR. LEACH: Object to form.
` THE WITNESS: Yes.
` BY MR. CANNON:
`Q. What kinds of things have you worked on that
` aren't computer-implemented games?
`A. Card games, dice games, games that involve
` roulette wheels, domino games.
`Q. And so have you developed games that are,
` essentially, played at a table with physical
` cards and things like that?
`A. Yes, I have.
`Q. Over what period of time have you been
` involved in developing games?
`A. Professionally, since '98. As a hobbyist, a
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`STACY FRIEDMAN 4/11/2014
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`Page 13
` few years before that, likely. But then
` almost continually since then.
`Q. And during that time what percentage of your
` time has been developing
` computer-implemented games compared to the
` percentage of time developing other games?
` MR. LEACH: Object to form.
` THE WITNESS: That's a hard
` question to answer. Virtually all of the
` games that I have developed can be
` implemented on the computer and, in fact,
` several have been, regardless of whether
` they would only be typically implemented on
` a computer.
` I would say that it's shifted over
` time between maybe -- well, let's start
` in '98. Between '98 and 2000 I was the
` mathematician for Silicon Gaming. We made
` video slot machine games, many of which were
` networked to local or wide area progressive
` games.
` I was the game designer for that.
` And by "game design," I mean mathematician,
` and specifically, how the game is played,
` how they behaved. I wasn't an artist, so I
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`STACY FRIEDMAN 4/11/2014
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`Page 14
`
` didn't draw the pictures.
` In 2001 I started my gaming
` consultancy. I originally started working
` with a few table game propositions that,
` naturally, had Internet embodiments, but
` were originally designed to be played in a
` physical casino with, as you say,
` physical -- the equipment, cards or dice.
` Over time I began focusing, as
` well, on -- I guess two additional areas:
` One is additional slot machine mechanics,
` ways of playing slot machines; and
` additionally, ways of converting common
` video games, which is what you meant by the
` other meaning of "gaming," into wagering
` games.
` And that started around 2003 or
` 2004, I believe, when I started focusing on
` that.
` And all of this, by the way, is
` referring to my own product development.
` During that same time I was
` consulting for online casino software
` vendors, starting in 2001, and those were
` the companies, mostly overseas, that were
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`STACY FRIEDMAN 4/11/2014
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`Page 15
` writing the software that Internet casino
` operators used to run their games.
` BY MR. CANNON:
`Q. In developing games, have you worked on
` programming computer implementations of
` those games?
`A. Most of the time I direct other programmers,
` as far as what software to write, as far as
` the design or the architecture.
` I don't typically do the
` programming for my clients' code or for my
` clients' systems.
`Q. Do you have programmers at your consulting
` company?
`A. No.
`Q. Who -- what programmers do you work with?
` MR. LEACH: Object to form.
` THE WITNESS: I am not sure I
` understand your question.
` BY MR. CANNON:
`Q. Does some other entity provide the
` programmers that you work with when you are
` designing games?
`A. Ah, so game design at the design level
` doesn't actually require programming. When
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`STACY FRIEDMAN 4/11/2014
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`Page 16
` I refer to "game design," I am talking about
` the storyboarding, the game play mechanics.
` This is before you actually do the
` implementation. So in many cases, the games
` that I have designed are patented and
` analyzed from a mathematical and game play
` standpoint, but I haven't written any
` software to actually play them, for example,
` on the Internet or on a mobile phone or on a
` slot machine.
` I have a few demonstration versions
` of several of my games on my website, and
` those were done by a contract programmer
` that I hired, and, also, modified by myself.
`Q. So do you provide -- you mentioned
` storyboards. Do you provide -- what work
` product do you provide to your clients in
` your game design projects?
`A. That is typically a par sheet. What's known
` as a par sheet in the slot machine industry
` is a listing of symbols on slot machine
` reels, winning combinations, how much those
` combinations pay, the rules for any
` additional slot machine game features, and
` rules for bonus rounds or free spins or --
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`STACY FRIEDMAN 4/11/2014
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`Page 17
`
` those are, basically, other features.
` And that's, in large part, because
` most of my clients already have a game
` studio including artists and programmers and
` project managers.
` And they are just looking for
` mathematical assistance, someone to make
` their games play the way slot machines are
` supposed to play.
`Q. Is there a standard format for a par sheet?
`A. No.
` MR. LEACH: Object to form on that
` last question.
` BY MR. CANNON:
`Q. You mentioned that there is something called
` a par sheet in the slot machine industry.
` Is that limited only to slot
` machines or is that something that you would
` submit for other types of games, as well?
`A. Well, "submit" is typically used to refer to
` the regulatory process.
` When a game -- when a casino game
` gets approved or submitted for regulatory
` approval, there is usually a mathematical
` document that goes along with it.
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`STACY FRIEDMAN 4/11/2014
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`Page 18
` It's typically not referred to as a
` par sheet unless it's a slot machine game.
`Q. And what would you call -- so -- and I was
` attempting to describe you providing the
` document to the company that's going to
` implement the game.
` What would you call that? I use
` the term "submit," but --
`A. Oh, just deliver, I guess.
`Q. And so when you deliver a specification to a
` gaming company, they have -- they have all
` the people that are required to implement
` the game; is that correct?
`A. My clients have varied in their level of
` capability from companies that have already
` successfully implemented slot machines in
` the past and simply needed help doing
` another one, to companies that have never
` even looked at a slot machine before but
` just heard about them and knew they could
` make money and wanted my help to do that.
`Q. And would you say that some companies have
` programmers and artists and the other people
` required to implement the games?
`A. Yes.
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`STACY FRIEDMAN 4/11/2014
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`Page 19
`Q. And would others rely on outside contractors
` to implement the games?
` MR. LEACH: Object to form.
` THE WITNESS: Potentially. There
` are a number of ways to run a game studio.
` BY MR. CANNON:
`Q. After delivering a specification of a game
` to another company, do you have any further
` involvement in the implementation of the
` game?
`A. That depends on whether they want me to.
` In many cases, they rely on my
` assistance for -- and my expertise for
` testing and verification.
` It's rare that a company that
` doesn't already know how to design a slot
` machine game knows how to do it right the
` first time, and the risk with not getting
` the implementation correct is that the math
` will be wrong and the game won't pay out the
` right percentage.
` So testing is a big part after
` implementation.
`Q. And are you involved in the testing in some
` cases?
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`STACY FRIEDMAN 4/11/2014
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`
`A. Yes.
`Q. And what is your involvement in the testing?
`A. Again, that depends on the, I guess,
` maturity of the client. If they don't know
` how to test a slot machine game, then
` typically I will be explaining that to them,
` understanding the test suites and the
` processes necessary to statistically verify
` that a game is behaving appropriately.
` In others it's simply a question of
` looking at the output of a test run and
` comparing it mathematically to what the par
` sheet says.
`Q. Based on your experience in the gaming
` industry, do you believe that you have a
` general knowledge of casino games?
`A. Yes.
`Q. And do you believe that you understand the
` rules of casino games?
`A. I do.
`Q. And is that a generally widespread knowledge
` of casino games or do you have knowledge of
` some games but not other games?
` MR. LEACH: Object to form.
` THE WITNESS: Well, I am sure there
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`
` are games that I don't have intimate
` knowledge of, but basically, I have
` knowledge of, at a high level, the way
` gaming works, and at an intimate level of
` the rules and operations of certain games.
` And I guess have been studying it
` for 15 or 16 years, so yes, I would say I
` would.
` BY MR. CANNON:
`Q. In the gaming industry have you heard of the
` phrase "the house"?
`A. Yes.
`Q. And what is your understanding of that
` phrase?
`A. The operator of a particular game.
`Q. And in the -- in a physical casino, is the
` house synonymous with the casino, itself?
`A. Typically, that would be the case, yes.
`Q. And on an Internet gaming situation, the
` operator of a website that offers games
` might be called "the house" in that case?
`A. Under the assumption that they are actually
` banking the game, yes.
`Q. So is that a requirement? Does the house
` have to put up the money for people that
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`Page 22
` win? Is that one of the requirements?
` MR. LEACH: Object to form.
` THE WITNESS: Yeah. I don't think
` that the word "requirement" applies. I
` think when you are talking about "the
` house," it's usually in the context of the
` phrase "house-banked gaming" or
` "house-banked games."
` And so in that case it's the house
` that banks the game. There are other forms
` of games where the house doesn't bank the
` game.
` BY MR. CANNON:
`Q. What do you mean by "bank the game"?
`A. Put up the funds against which players
` wager.
`Q. For a competition in which there is various
` competitors who put in entry fees that go to
` one entity and then some of those are paid
` back to some of the competitors, would those
` be considered house-banked games?
` MR. LEACH: Object to form.
` THE WITNESS: Can you say that
` again?
` BY MR. CANNON:
`
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`
`Q. Sure.
` Are you familiar with a type of
` game in which competitors pay entry fees
` that go to one entity and then that entity
` pays back some of the entry fees to winners
` of games?
`A. I am.
`Q. Is there a term for that type of game
` arrangement?
` MR. LEACH: Object to form.
` THE WITNESS: There are several,
` depending on the exact structure for how
` those funds are moved and disbursed.
` One of them may be a player-banked
` game, another may be pari-mutuel, and
` another may be a tournament.
` BY MR. CANNON:
`Q. Are any of -- is there any situation with
` entry fees that would be called house-banked
` game?
` MR. LEACH: Object to form.
` THE WITNESS: I would have to
` understand the specific example you would be
` referring to.
` That's -- there are too many
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`STACY FRIEDMAN 4/11/2014
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`Page 24
` possibilities in the hypothetical there.
` BY MR. CANNON:
`Q. Okay. I would like to turn to paragraph 5
` of your declaration. This paragraph refers
` to design of casino wagering games for a
` company called Silicon Gaming, Incorporated.
` And about halfway through the
` paragraph, it says "Silicon Gaming's product
` line included networked multimedia gaming
` platforms, hardware, and software."
` Do you see that?
`A. I do.
`Q. And then the next sentence it says "While
` there, I worked on the designs of video slot
` games, video keno games, and video poker
` games; helped produce dozens of innovative
` new games for the Odyssey platform; and
` engaged regulatory agencies to achieve
` regulatory approval for the mathematics used
` in the games."
` Do you see that sentence?
`A. I do.
`Q. With respect to video slot games, what --
` how would you generally describe what a
` video slot game is?
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`Page 25
`A. In general, it's a physical machine with one
` or more displays, monitors, that would
` display a video image of a plurality of
` reels spinning, each reel having one or
` more -- well, typically three or more
` graphical symbols on them.
` The basic rules of video slot
` machines are similar to the basic rules of
` mechanical slot machines from 115 years ago.
` The reels revolve and then stop, and if
` there is a combination of symbols that
` appears on those stopped reels that
` corresponds to a predetermined winning
` combination according to the pay table, then
` an award is won.
`Q. Are video slot games single-player games?
`A. Most of the time.
`Q. Are there video slot games that are -- that
` include more than one player?
`A. There have been several attempts at
` designing multi-player slot games. They are
` in the minority.
`Q. And are you aware of any successful attempts
` of designing a multi-player slot game?
`A. Well, I guess "success" has to be better
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`Page 26
` understood. There are multi-player slot
` games on the Internet right now that are
` generating money, so on that yardstick,
` those are successful.
` There was an attempt by Bally to
` create a two-player slot machine game --
` physical video slot game a few years ago
` that involved a bench and two players
` sitting side by side and playing next to
` each other.
` I don't believe that was
` particularly popular, but they did produce
` it, so -- "success" has to be, I guess,
` better defined.
`Q. In the multi-player video slot games that
` you are aware of, what's the nature of the
` participation of the multiple players?
` MR. LEACH: Object to form.
` THE WITNESS: In one game that I am
` thinking of that's available on the
` Internet, players are grouped into what's
` colloquially called "a room."
` It's not a physical room, but it's
` a room -- a virtual room where you have an
` avitar, a picture, that represents you, and
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`Page 27
` there are four or five other people who also
` have avitars, and you are all playing slot
` machines as if you were sitting next to each
` other in a casino. Then you can communicate
` or chat, as it's called.
` Do you need a break?
` BY MR. CANNON:
`Q. I am fine.
`A. Where was I?
` So in that regard, the players are,
` I guess, playing near each other and can
` communicate back and forth.
`Q. Is there any interaction in the game play in
` the sense that one player's actions affect
` another player's actions in the play of the
` game?
`A. Not in that -- well, so actually, in that
` case, I think because it's a social slot
` game, one player can -- one player can win
` an award and that award can have positive
` effects on the awards of other players. So
` I think in that case there are some, I
` guess, inner-game effects.
` Typically, that's not the case with
` slot machine games, but like I said, there
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`Page 28
` have been attempts to make the games more
` interactive and more interdependent.
`Q. In general, what is a video keno game?
`A. A video keno game is a keno game played on
` an electronic gaming machine or what is
` typically looked at as a slot machine
` cabinet.
`Q. And in general, what is keno?
`A. Keno is a rather old proposition. It's a
` game based on drawing 20 numbers, or in the
` old days, numbered balls, from a bucket
` containing 80 numbered balls, and before
` that draw occurs, allowing a player to mark
` on a ticket between 1 and 10, or sometimes
` up to 20 numbers that they select, and then
` after the draw has concluded, comparing the
` numbers selected to the numbers drawn, as in
` a lottery.
` It's, basically, a lottery, just
` with more balls.
`Q. And is keno a single-player game?
`A. Typically, yes.
`Q. Are you aware of any multi-player keno
` games?
` MR. LEACH: Object to form.
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`Page 29
` THE WITNESS: Off the top of my
` head, I can't think of any keno game,
` itself, that involves multiple players in
` the game, I guess. Nothing is coming to
` mind.
` BY MR. CANNON:
`Q. Okay. Now, in keno, is there -- there is a
` draw of numbers, of 20 numbers; is that
` correct?
`A. Yes, that's correct.
`Q. And there are multiple participants in a
` single draw; is that correct?
` In other words, there can be
` multiple players that have picked numbers
` and submitted them to the casino or to
` whoever is running the game, correct?
`A. There can be. There are not necessarily
` multiple players. In fact, in many
` casinos -- and this is true for state
` lottery games, as well, which run keno games
` on a maybe 5- or 15-minute interval.
` It's entirely possible that no one
` has played during that interval and,
` therefore, there aren't any players for that
` game.
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`Page 30
`Q. And so you mentioned lottery, and that keno
` is somewhat similar to a lottery. I am just
` trying to get an understanding of any
` differences.
` Is keno like a lottery in the sense
` that there is periodic draws and multiple
` people can buy tickets and then anybody who
` matches a certain number wins money for each
` of those draws?
` MR. LEACH: Object to form.
` THE WITNESS: So both keno and the
` lottery game that I believe you are thinking
` of are ball drawing games. That is, there
` is a large set of numbers -- or number
` drawing games, I should say.
` There is a larger set of numbers
` from which a smaller set is selected,
` typically without replacement, and then the
` numbers drawn are compared to the numbers
` selected by the players and matched up to
` determine wins.
` There are a lot of different kinds
` of lottery games, so I am going to assume
` you are talking about the standard ball
` drawing Lotto, pick six numbers out of 49,
`
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