July 27, 2009

Sports Leagues…Assemble!

The NFL had been threatening to sue the state of Delaware for months if they continued their plans of allowing sports betting in the state.  The NFL, is nothing, if not consistent.  But before suing, they decided to bring some friends, ensuring that this whole situation gets that much stickier.  From ESPN,

Friday, the league, which had been pro sports’ biggest opponent to Delaware’s plans, followed through. And it convinced some powerful friends to join in the fight. In federal court in Wilmington, the NFL, NBA, Major League Baseball, the NHL and the NCAA filed a complaint to stop Gov. Jack Markell and the Delaware State Lottery Office from taking bets on their games.

Delaware, along with Nevada, Montana and Oregon, is one of four states legally exempt from the 1992 Professional and Amateur Sports Protection Act (PASPA), a federal law which prohibits states from being in the bookmaking business. But the state hasn’t had sports betting since a failed attempt at allowing parlay betting in the mid-1970s. Now, faced with an $800 million budget deficit, Markell is turning to sports betting to hopefully raise between $50-$100 million for his state.

With Delaware having the PASPA exemption, the NFL’s argument would have to be based on something outside of the exemption granted to Delaware.  To step outside the exemption, the NFL looked at the types of games to be offered by Delaware.

Soon after the Delaware state Senate approved Markell’s sports betting proposal in May, the question of whether the state would continue with parlays — which require picking two or more winners to cash in a bet — or if it would allow single-game betting like Nevada, became paramount. Delaware pols favored single-game betting because they expected it would attract more gamblers and money from neighboring Pennsylvania and Maryland.

The leagues think those plans are against the law.

“Delaware did not conduct single-game wagering during its 1976 sports lottery, which was limited to parlay bets on NFL games,” league representatives said in a joint statement. “The PASPA exception does not permit Delaware to now conduct single-game wagers on the NFL or wagering on sports other than the NFL.”

The complaint alleges that sports betting in Delaware violates the 1992 anti-sports betting law, as well as the state law which mandates all forms of gambling be games of chance, not skill. The leagues argue that, by going from parlay to single game betting, chance gives way to skill.

So, the federal claim boils down to whether or not single game betting falls under Delaware’s PASPA exemption; Delaware having already been granted an exemption to allow parlay betting in 1976.  As the article mentions, if Delaware was granted the exemption to allow betting on multiple games, why wouldn’t the same exemption be allowed for betting on one game?  If the law prohibits states from being in the bookmaking business, and Delaware has an exemption, I don’t see how number of games wagered on makes any difference.

The state law claim, which is basically the chance vs. skill argument could carry some weight.  Although it certainly wouldn’t apply to everyone, some would use injury reports, injuries, point spreads, etc. to determine which single team they should bet on.  On its face, that sounds like more than chance.  In case you were wondering, this is the same logic the NFL used to allow its teams to enter into lottery sponsorships.

With Delaware moving forward with plans to allow betting by the time the NFL season starts, and the NFL asking for an injunction, we should see a development in this case, sooner rather than later.

ESPN — NFL, NBA, MLB, NHL sue to block Delaware sports betting

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