Bradley C Bower/AP
Delaware Gov. Jack Markell 

Delaware May Transform State of Sports Betting in US

March 13, 2009 01:45 PM
by Denis Cummings
Delaware may institute legalized sports wagering by the end of the year, which could prompt a change in federal law.

Delaware May Legalize Sports Wagering

According to a report by ESPN The Magazine’s Chad Millman, Delaware Gov. Jack Markell will soon introduce a proposal to the state legislature to legalize certain forms of sports gambling. He hopes to have it passed by April and put into effect before the start of the 2009 NFL season in September.

Just two states, Nevada and Montana, allow sports gambling, which hasn’t been legal east of the Mississippi River in more than 30 years. Delaware, along with Oregon, is exempted from the Professional and Amateur Sports Protection Act, a federal law passed in 1992 that forbids states to allow sports gambling.

Delaware, like most states, is facing a budget shortfall due to the recession. Regulating and taxing sports gambling would provide a lucrative revenue stream for the state. The Global Gaming Business reports that Delaware government offices presented a report to former Gov. Ruth Ann Minner in January 2008 estimating that a sports lottery in the state’s three race track casinos would generate a “General Fund return of between $22.5 million and $30.6 million” in the fiscal year 2010.

Minner was opposed to gambling and discouraged legislative efforts to pass a sports betting bill last year, but the election of Markell has cleared the way for legalized sports betting.

“While sports betting is still the one form of gaming considered taboo by most lawmakers, Markell’s move will have nationwide ramifications,” writes Millman. If sports wagering is successful in Delaware, other states—particularly neighboring states—may push for the right to legalize it.

In New Jersey, state Sen. Raymond Lesniak is thinking about filing a federal lawsuit over the Professional and Amateur Sports Protection Act, claiming that it unconstitutionally discriminates against the 46 states where sports gambling is prohibited

“Billions of dollars are being bet offshore through the Internet or through organized crime, and those are revenues that could be going to New Jersey,” Lesniak told the Newark Star-Ledger. “But we can’t regulate it and run it in the state of New Jersey, and that’s just unfair.”

Background: Sports gambling in the United States

In 1992, Congress passed the Professional and Amateur Sports Protection Act, which forbade states from sponsoring or legalizing wagering on sporting events. It “all but stopped the expansion of legal-land-based sports wagering in the United States,” according to the Global Gaming Business, though four states that allow forms of sports gambling were allowed to continue doing so.

These exemptions were created in order to allow Nevada, which has an economy highly dependent on gambling, to continue allowing sports books, but they also applied to Montana, Oregon and Delaware. Delaware was granted the exemption based on a state lottery game than ran in 1976 that involved picking NFL games against the spread.

New Jersey, home to Atlantic City, was also granted an exemption of sorts; PAPSA allowed states that had legal gambling for the previous 10 years to pass a law legalizing sports gambling within a year. The New Jersey legislature was unable to pass such a law, and thus it is not currently allowed to legalize sports gambling.

Other forms of gambling, most notably slots, have expanded significantly since 1992 and now 37 states have legalized gambling. Pennsylvania and Maryland have each approved slots recently, driving money away from gambling options in Delaware and New Jersey; sports betting could help bring the money back.

“Sports betting can draw people away from the other states,” said Delaware House Speaker Pete Schwartzkopf to USA Today. “And while there is money to be made on sports betting, the real dollars are in the carryover to casinos.”

Legalized sports wagering can have economic drawbacks, however. Professional sports leagues and the NCAA are strongly opposed to gambling on sports, and treat states that allow it unfavorably.

Oregon dropped its sports lottery game in 2006 after the NCAA said it wouldn’t allow the state to host tournament games. “The rationale was that the state could realize more economic benefit from hosting NCAA (basketball) tournament games,” said Oregon Lottery spokesman Chuck Baumann to USA Today.

Analysis: Delaware’s proposal

Markell’s plan would allow only parlay bets, which are a combination of at least two bets. Joe Weinert, senior vice president of the Spectrum Gaming group, explained to gambling site Covers, “The law has determined that sports betting must be a game of chance, and not skill.”

Parlay bets, where the odds of winning are at least 1 in 4, would therefore qualify as a game of chance, while a straight bet, where the odds are 1 in 2, would qualify as a game of skill.

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