Appeals court rules against plan
PHILADELPHIA -- A federal appeals court ruled Monday that sports betting in Delaware would violate a 1992 federal ban on such wagering, essentially halting the state's plans to start taking bets next month.
The plan was opposed by the professional sports leagues and the NCAA, which claimed it violated the federal Professional and Amateur Sports Protection Act, would harm their reputations and expose young people to gambling.
Millman: Hefty Losses
The state of Delaware got a "bad beat" with Monday's ruling, and in the process lost as much as $50 million, writes ESPN The Magazine's Chad Millman. Blog
Delaware Gov. Jack Markell had pushed for sports betting as a way to help resolve an unprecedented shortfall in state tax revenues and balance the state budget. Attorneys who argued the case for the state appeared stunned by the ruling.
"We're very disappointed with today's ruling," said Michael Barlow, the governor's legal counsel.
Delaware was one of four states exempted from the federal ban on sports betting because it once ran an NFL sports lottery in 1976 that required parlay, or multiple bets, on at least three games.
The 1992 law restricts sports betting to the four states that met a deadline to sign up for it: Nevada, where Las Vegas sports books determine the odds for sporting events across the country; Delaware; Montana; and Oregon.
But the leagues argued that the exemption does not allow Delaware to offer bets on single games, or on sports other than professional football.
Speaking for the court, Judge Theodore McKee said Monday that the betting plan as currently envisioned violates the federal ban. The court was expected to issue a formal order later Monday, followed by a written opinion later.
Barlow said Markell administration officials would have to discuss whether to proceed next month with parlay bets on NFL games, which the leagues concede are legal. Administration officials also will meet with their lawyers to decide whether to appeal the ruling to the full appeals court, or to the U.S. Supreme Court.
The court heard almost two hours of argument from attorneys regarding the denial of an injunction that would have prevented the betting from beginning with the start of football season in September.
But instead of ruling on the injunction, the appeals court turned directly to the league's claim that sports betting would violate the federal ban.
"We were hoping the court would rule on the merits," said Kenneth Nachbar, an attorney representing the NFL, NBA, NHL, NCAA and Major League Baseball.
During Monday's arguments, the judge questioned what would happen if the state began sports betting in September, then had it declared illegal by the district court several months later. Individual bettors would have lost hundreds or thousands of dollars on what essentially was an illegal state scheme, he said.
"What happens if you're wrong?" McKee asked Andre Bouchard, an attorney representing the state.
"Caveat emptor," Bouchard replied, citing the Latin admonition of "buyer beware."
Copyright 2009 by The Associated Press