From the US Patent Office database:

United States Patent / 6,722,980
Stronach / April 20, 2004

Wagering system

Abstract

A wagering system comprises a race providing system facilitating wagering on race events and providing information regarding the race events, and at least one wagering terminal in communication with the race providing system. The at least one wagering terminal includes a race event selector to select next race events for wagering, a display to present information regarding the selected race events, a user interface to place a wager on an elected race event of the selected race events displayed, and a wagering value mechanism to provide a wager amount for the wager on the elected race event. Further, at least one of the race providing system and the at least one wagering terminal includes a quick pick race contestant(s) selector receiving handicapping information and odds information from the race providing system to select one or more race contestants of an elected race event for the wager in accordance with the received handicapping information and odds information.

Inventors: Stronach; Andrew M. (14875 Bayview Avenue, Aurora, Ontario, CA L3G 4G8)
Appl. No.: 997288
Filed: November 30, 2001

Now this wagering system patent was known for some time. It was an issue during the Conservative leadership race, the race Belinda Stronach lost to Stephen Harper.

But now the wagering system has an application:

Parimutuel wagering system with opaque transactions

Agent: Mark A. Litman & Associates, P.A. York Business Center - Edina, MN, US
Inventor: Andrew Stronach
Class: 463025000 (USPTO), A63F013/00 (Intl Class)

<snip>

[0481] 1.53 Wagering Clubs

[0482] Customers are rebated on wagering, depending on how much they wager in a month:

[0483] Coal <$1000/month nada . . .

[0484] Bronze $1000/month (rebated 2% on both losing SheTips picked bets and on winning player picked bets)

[0485] Silver $2500/month (rebated 4% on both losing SheTips picked bets and on winning player picked bets)

[0486] Gold $5000/month (rebated 6% on both losing SheTips picked bets and on winning player picked bets)

[0487] Platinum $20000/month (rebated 8% on both losing SheTips picked bets and on winning player picked bets)

[0489] The player must have access to an automatic wagering system that bases candidate selection on a handicapping system (e.g., algorithms and software implemented by a processor. Such an automated handicapping, race contestant selection system is described in U.S. Pat. No. 6,722,980 (hereinafter referred to as the "Stronach Application"), which patent is incorporated herein by reference in its entirety.

Who can afford to gamble $20,000 each month?!

Never mind.

We now have a use for patent 6,722,980.

It's called SheTips.

Here are some screenshots. Be warned. Depending on the sexual harassment policy of your workplace, these screenshots might get you in trouble.

So what exactly is this?

Welcome to the world of Hot Tips, Hot Girls, and so much more.

We'd like to introduce you to the wonderful world of SheTips. There isn't anybody out there that doesn't dream of winning it big. If that's you, this is your chance to get in on all the action.

With SheTips, you're betting like an insider.

Simply put, SheTips can help you win more money, more often. How? It's easy. By signing up now for a SheTips Membership, you'll automatically get instant access to the biggest sports tipping databases this universe has to offer. So every time you ask for a SheTips Hot Tip, you'll automatically increase your odds of winning.

Whether it's through a SheTips Machine, SheTips Online, SheTips Phone Tipping, or hiring your favorite SheTips Agent for a betting contest, you can bet on getting the hottest tips anytime, anywhere. Because with SheTips you are betting like an insider.

So it is a wagering site. No surprise. But what is it with the babes?

Every time you call you'll speak live with one of our gorgeous SheTips Hot Tippers or Runners, who'll provide you with the hottest tip derived from the world's biggest sports tipping databases. Even if a horse is scratched 1 minute before a race, or a sudden downpour makes the track sloppy and messy, your Hot Tip will incorporate all the latest information, and odds updates, to give you the best odds of winning and the maximum value for every dollar you bet with.

So let's be clear, when you call to place your bet, the person answering the phone is dressed like this:

Of course she is. Well, maybe not dressed like this. Maybe she wears less. Maybe she's an ex-strippers or a former Playboy Playmate. Maybe she's really lonely and can't wait until you call to place another bet, just so she can hear your voice. You should call her. Just place a bet as an excuse to chat with your favourite runner.

The patent speaks about how the user can maintain what it calls a "blackbook" of favourite runners. How helpful.

Then again, maybe she's a 60-year-old grandmother. It's the Internet. Who can tell?

But then one of the uses of the points you earn for repeated betting is the opportunity to join with the babes for a real-life party! So I suppose they must look like the babes pictured on the website.

Imagine the interview process! "You need to show me whether you have what it takes to be a SheTips babe. Heh-heh-heh."

For now, put aside the salacious aspect of Andrew Stronach's project. Let the minister in charge of the status of women make comments on this cross between Hooters and OTB, and on any company subject to Canadian law using sex and objectified women to promote gambling.

This is a Canadian company, don't forget. Here's an old job notice to recruit programmers in the Toronto area to work on the project.

First, don't fool yourself. Everything from the bikinis to the software itself is designed to entice you to bet:

Pari-mutuel wagering is a system by which a wagering pool is established for the receipt of bets, and the proceeds of the pool are divided amongst holders of winning wagers in accordance with the number and types of winning wagers and the magnitude of each wager...However, pari-mutuel wagering also suffers from a number of disadvantages...Firstly, pari-mutuel wagering often requires detailed knowledge of betting terminology (e.g., win, place, show, exacta, triacta, etc. wager types). Secondly, pari-mutuel wagering often requires the wager placer (wageror) to be conversant with betting forms, and to have knowledge of race contestant handicapping....Therefore, attempts have been made to improve on the conventional pari-mutuel wagering systems to encourage wagering.

Second, the system is designed to work around laws that forbid placing bets online...and the babes are a key part of it:

In addition to the complexities of the wagering structures themselves, wagering, and particularly pari-mutuel wagering is a highly regulated industry, and there are many legal requirements, legal restrictions, and local and national laws and regulations that govern the implementation of wagering. With on-line wagering and automated OTB wagering available, additional complexities are provided. Credit card and cash card companies may have restrictions on the direct charging into accounts in race facilities, and may prevent the transfer of funds from a credit card to a wagering account. This is one of the reasons that automated teller machines (ATM's) are prominent in some wagering facilities. Players may use their credit cards or cash cards in an ATM, withdraw the cash, and then make direct wagers or place the funds directly into their accounts. This can be an inconvenient method, with time consumed that may cause a player to miss races and force the player to physically carry sums of cash from the ATM to a betting window.

A novel wagering format will be introduced by the inventors that uses live employees carrying data transmitting systems (PDA, telephones, wired systems, wireless systems, Blackberries.TM., laptops, etc.) through which contacts with wagering facilities can be established and wagers assisted or placed from legal wagering facilities.

As the financial records from the financial structure never 'sees' the wagering facility in the transaction, transferring funds or guaranteeing funds to the intermediate transaction on a ledger, the entire transaction is in compliance with state and national regulations prohibiting or limiting or rendering illegal the availability of funds in the wagering transaction or transferring funds into a wagering account.

Don't forget: Andrew Stronach is listed as the inventor, so he's the one introducing this "novel wagering format".

The babes are actually critical to this "format". You put money in an intermediate account. You call the babe to place a bet. The babe takes the money out of the account and then places the bet. You can tell the government that you've never placed a bet. No record exists linking your money transfer with a wagering facility. You've avoided the rules in your jurisdiction that might prohibit or limit the availability of funds in a wagerng account, or so the patent claims.

Becase the babes are actually placing the bets on your behalf, you never enter a racetrack, physically or virtually.

The babes are, as described on the website, "runners".

This is important because of the laws that govern SheTips:

9. Law and Jurisdiction

These Terms of Use and your use of the Site are governed by the laws of the Province of Ontario, Canada, without regard to its choice of law provisions. The courts of general jurisdiction located within Toronto, Ontario, Canada, will have exclusive jurisdiction over any and all disputes arising out of, relating to or concerning these Terms of Use and/or the Site or in which these Terms of Use and/or the Site are a material fact.

Magna Entertainment Corporation, run by father Frank Stronach, manages many racetracks, but in the US and Europe only, none in Canada, nor in the Caribbean. It offers betting only for US and European residents. Nor does it endeavour to work around restrictions on betting that exist in many US states, subjecting itself to all applicable state and local laws.

On the other hand, SheTips subjects itself to Ontario law, and is explicitly attempting to create a structure that allows it to argue that it is not subject to most gambling legislation in any jurisdiction.

So what does the law say?

Canadians are gambling online. Online gambling is illegal in Canada. Despite this fact, it is very difficult to regulate Internet gambling in Canada.

Most of the Internet gambling companies are located offshore to thwart government prosecution. For example, ICI operates out of the Turks and Caicos Islands.

Where does SheTips list a mailing address? Aurora, Ontario? Nope.

Falcon Services Inc
P. O. Box 1143
Media House
Bay Road
Basseterre, St. Kitts
St. Kitts & Nevis
East Caribbean

The domain itself is registered offshore as well:

Domain Name: SHETIPS.COM
Registrar: TUCOWS INC.
Whois Server: whois.opensrs.net
Referral URL: http://domainhelp.tucows.com
Name Server: NS1.CYBERNOMICSNET.COM
Name Server: NS2.CYBERNOMICSNET.COM
Status: ACTIVE
Updated Date: 15-feb-2005
Creation Date: 07-apr-2004
Expiration Date: 07-apr-2006
Current Registrar: TUCOWS INC.
IP Address: 209.59.67.230 (ARIN & RIPE IP search)
IP Location: AG(ANTIGUA AND BARBUDA)
Record Type: Domain Name
Server Type: Apache
Lock Status: ACTIVE
Web Site Status: Active
DMOZ no listings
Y! Directory: see listings
Secure: No
E-commerce: No
Traffic Ranking: Not available
Data as of: 21-Oct-2005

But back to the law:

Canadian law allows only the provincial government and some charities to run gambling operations. It is now clear that this law, section 207 of the Criminal Code of Canada ("the Code"), makes it illegal to operate, or place a bet through, an offshore Internet casino. The Code specifically restricts the way in which Internet gambling can be introduced. Provincial governments are permitted to operate computer-based lottery schemes like Internet gambling but they cannot licence others to do so. Further, any province that did wish to offer Internet gambling could not take bets from out of province residents unless that other province allowed it. Finally, any type of gambling on the Internet would have to be legally available in Canada, leaving the most popular type of online gambling - single event sports betting - prohibited.

Single event sports betting? Like betting on a horse race?

It is estimated that by 2004 the Internet gambling market will pull in $7.4 billion in revenue through gambling operations as well as through related software sales.(7) The expansion of online gambling in Canada poses new challenges to law enforcement. Many of organized crime's criminal activities such as drug trafficking, money laundering and enterprise crime offences are financed by illegal gaming profits. Even if authorities decided to act, however, enforcing vague rules on the World Wide Web, which moves across borders faster than any roulette wheel can spin, may prove impossible. Canada's federal and provincial laws are inadequate to deal with the onslaught of virtual gaming. Provincial governments are limited in their ability to prosecute foreign-based casino operators operating in cyberspace. Since the existing legal framework is inadequate to deal with a global, intangible entity, new legal, technological, and political solutions will have to be crafted in order to protect Canadians from the substantial externalities posed by online gambling.

And that brings us back to the heart of the matter. Imagine that the Canadian government were to attempt to craft a new legal framework to tackle cyberspace gambling, and in particular, this use of runners and intermediate accounts to evade the technicality of a Canadian resident actually placing a bet. During cabinet meetings to debate the issue, the question turns to whether the presence of a minister whose brother is deeply involved in that industry means that she must leave the meeting.

If she talks to her cabinet colleagues, the topic must never come up. How can we be sure of that?

How can we be sure that she does not communicate information back to her brother about how the new laws are taking shape?

And what if law enforcement attempted to prosecute the online gaming site, even under the present statutes? What sort of position does this put her in?

In fact, the mere possibility of any of these situations happening in the future cannot help but have an effect. As a matter of common sense, if a minister's brother or sister, mother or father, son or daughter, is engaged in managing or supporting what is likely to be an ongoing criminal enterprise, then that minister is indelibly stained by association, and either the activity should be prosecuted and the legality tested in court, or the minister should seriously consider resigning from cabinet for as long as the situation is so ill-defined and potentially compromising.

But then are her constituents being served well by an MP who is burdened in such a way?

The voters in Aurora-Newmarket will have an opportunity to consider the question on January 23 when they decide on Belinda Stronach's future as the Liberal MP for their riding.