Tuesday, March 10, 2009 Updated: March 19, 7:57 AM ET
Behind the Bets
Markell's plan might be at odds with the NFL, but he's more worried about a $700M budget deficit.
During his campaign for Delaware Governor last fall Jack Markell often hinted that, if elected, he'd support sports betting in his state. Now that he's got the job, Markell is done hinting.
ESPN The Magazine has learned that sometime next week, according to a statehouse source, Markell will introduce a proposal which, for the first time in more than 30 years, makes gambling on sports legal east of the Mississippi River. The plan, which could be approved by the state legislature as early as April, would likely be operational come fall, just in time for the NFL season.
Markell's proposal calls for a statewide sports lottery that only allows parlay bets. In a parlay, gamblers have to get two bets right in order to win. It's an idea that has been brewing in Delaware for a while, long before the economy imploded and the state found itself with a budget shortfall of $700M. In fact, a proposal to allow gambling on sports died in the state legislature last year, when then governor Ruth Ann Minner made it clear she'd veto a resulting bill. When it comes to gambling, "you can't really be half-pregnant." - Delaware Governor Jack Markell
The newly elected Markell, who has spent the past several weeks listening to proponents of gambling as well its opponents, is much more of a pragmatist than a betting revolutionary. He hasn't been to Vegas in nearly 15 years and almost never hits the race track/casinos (called racinos) in his home state. But the way he sees it is this: Delaware already allows horse racing and slots. And with the state currently $700M in the hole, offering the Pats minus-six over the Jets when bettors come by to drop a nickel in the slots isn't amoral. As he told me a couple months ago, "you can't really be half-pregnant."
Delaware, along with Nevada, Montana and Oregon, is one of four states that has long had sports betting laws in its books, exempting it from the 1992 Professional and Amateur Sports Protection Act, a federal law which banned states from getting into the bookmaking business. While Montana and Nevada still support sports gambling and Oregon only recently shut down its sports lottery, Delaware hasn't toyed with it since a failed run during the 1976 NFL season.
Markell is banking that the return of betting will help close his state's budget gap. According to the last National Gambling Impact Study, commissioned by Congress and released a decade ago, as much as $380 billion is bet on sports every year. In the ten years since then the Internet has not only increased the opportunity for sports betting, but the interest as well.
Markell expects the lottery to bring in at least $50-$100M in revenue through betting on games, increased handle at the racinos and higher food and beverage sales. He'll also propose that an unspecified number of locations, such as sports bars around the state be allowed to sell sports lottery tickets. He's hoping to develop a study of table gaming and eventually push for multiple casinos in the state. Essentially, he wants to turn his state from a local betting Stop-N-Shop into a full-fledged gambling destination. Sports betting is a lynchpin in his plans, which doesn't thrill leagues like the NFL.
"Our policy on this issue has been consistent for decades." NFL spokesman Greg Aiello wrote me in an email. "We have been an active proponent of federal and state legislation that prohibits the spread of legal sports gambling. We do not want our games used as bait." "To allow betting in Nevada and three other states is discrimination against the rest of the states. We have to do something. If you go to Atlantic City on Super Bowl weekend there won't be anyone there." - NJ Senator Ray Lesniak
Governor Markell's spokesman Joe Rogalsky had no comment on the expected announcement.
Once upon a time supporting any form of betting was considered one of the third rails of American politics. Pols were better off saying they hated puppies, Christmas and the Star Spangled Banner. But that's changed in the past fifteen years, as riverboat and Native-American casinos have become as ubiquitous as interstate exits.
The economic crisis is only making elected officials more aware of how much the government can make by betting on gambling revenue. A recent study by PricewaterhouseCoopers reported that the United States stands to earn $52 billion over the next decade by taxing, rather than policing, Internet gaming sites, mainly those focused on poker. That news prompted Congressman Barney Frank (D, Mass.) to announce that, later this month, he'll propose a bill overturning the Unlawful Internet Gaming Enforcement Act of 2006, which bars banks and credit card companies from making payments to known online gambling sites. The law has made it difficult for many betting sites to do business in the U.S.
While sports betting is still the one form of gaming considered taboo by most lawmakers, Markell's move will have nationwide ramifications. When Congress passed the sports betting ban in 1992, only a handful of states allowed gambling of any kind, not including lotteries. That total is now 37, including Connecticut, New Jersey, New York, Pennsylvania and West Virginia, five states that either border Delaware or are less than a day-trip away.
All of these states compete for the betting dollars of people in the densely packed Mid-Atlantic region up through the Northeast corridor. In fact, New Jersey—which has seen gambling revenues in Atlantic City erode as the Internet and neighboring states encroached on its territory—is desperate to get a piece of Delaware's likely action. Later this month, NJ State Senator Ray Lensiak says he will file a federal lawsuit claiming the 1992 sports betting ban is illegal. "To allow betting in Nevada and three other states is discrimination against the rest of the states." Says Lesniak. "We have to do something. If you go to Atlantic City on Super Bowl weekend there won't be anyone there."
Chances are they'll be in Delaware.
Got a betting story for Chad? Email him.Read more Behind the Bets.Chad Millman is a Senior Deputy Editor at ESPN The Magazine, and once wrote a book called The Odds. His column takes a close look at the culture surrounding the bet.