Thinking about heading down to Delaware for some fall sports betting? Think again. On Monday, August 24, 2009, a Federal Appeals court granted an emergency injunction against Delaware’s plans to begin taking bets on single game events, beginning with this NFL betting season. The actual case itself was scheduled for December 2009, which would have allowed sports betting to move forward, but lawyers from the major sports leagues plus the NCAA were successful in convincing the 3 judge panel that general sports betting in Delaware would violate a 1992 Federal ban on sports gambling.
Like many other states, Delaware is in dire need of funds for its state government, which is believed to have the greatest shortfall per capita compared to every other state in the union. Delaware’s governor, Jack Markell, sought to legalize sports betting based on legislation enacted in the 1976, which allowed the state to run a “sports lottery” style parlay betting operation. Ultimately, this plan fizzled out, but the laws permitting the lottery remained on the books. The natural progression from this status was to move towards Las Vegas style, single game betting and bookmaking. Markell and many other state lawmakers felt legalizing sports betting would create a steady stream of revenue for the state.
In the wake of the Federal Appeal’s Court decision, the Governor and many other officials are stunned. Governor Markell stated, “[the] Delaware Sports Lottery was invented as an economic development initiative. We felt it was consistent with federal law.” Lawyer Kenneth K. Nachbar, who represented the various sports leagues disagreed in court, stating: “The closer you get to single-game betting, the more you affect the integrity of what happens on the field”. Unfortunately for Delaware, the Justices agreed with Nachbar’s sentiment.
The judges were also concerned that Delaware’s plans to start single game sports betting prior to the December 2009 court case regarding its Federal level legality could essentially be an illegal activity. Had sports betting commenced as planned, and then was later deemed illegal by the court in December, people who lost wagers could request the state to return their money. According to Chief Justice Theodore McKee, “[If] Delaware knows it was taking my money in an illegal scheme, I want my money back.”
The other end of the argument, however, dealt with the impact on sports and fair play. Lawyer Nachbar believed that fans could question the integrity of a sports contest if they believed money was riding on the result. A sloppy pass from a quarterback, or a missed field goal could all be construed as deliberate efforts to influence the game result. Opposing Counsel Andre Bouchard, who represented the state of Delaware, suggested this argument was incorrect, because the leagues have been unable to prove whether or not sports were negatively affected by existing bookmaking operations in Las Vegas. Further, Bouchard suggested Delaware’s 1976 legal sports lottery provided an adequate basis for legislating general bookmaking activity in the state.
So, as it stands, Delaware still has the go ahead for lottery style parlay betting. Any other sports wagering is on hold until the court hears the entire case in December 2009. Local gaming operations were naturally upset with this result, since many had already invested millions of dollars renovating their facilities in anticipation of larger crowds coming to place bets on sports. Now, those renovations are either at a stand still, or will be quietly completed with the faint hope that the lottery style parlay betting will bring in customers.
Others feel the Judge’s missed the point with respect to legality of bookmaking on a state level. Now that Delaware has put the breaks on full sports betting activities, it could be argued more people will look to organized crime and other illegal enterprise to take their wagers. This naturally furthers the plight of criminal activity, which could have been stemmed had the justices sided with Delaware.
Aside from “placing bets with mob” (a hyperbole used by many naysayers to state sports betting), there is still one very obvious, perhaps safer alternative: online sports betting. People hoping to place bets in Delaware will now turn to offshore NFL betting operations for their business. While the legality of such activity is questionable, one thing about offshore betting is for sure: any monies that could potentially benefit a state government leave the country altogether, and into the economies of foreign countries instead of the USA. So even if the ruling on the emergency injunction requested by the sports leagues maybe legally sound, it definitely is not economically productive.
Delaware aside, major offshore sportsbooks are anticipating a strong season, despite the stagnant USA economy. NFL betting is extremely popular, not to mention betting on College football, NBA basketball, College basketball, and most all other major sports. As a result, offshore betting still remains strong whether or not states like Delaware legalize sports betting at home.
Barney Frank, D Massachusetts, chair of the house banking committee has already introduced legislation that would legalize and tax internet gambling in the USA. Frank’s motivation is similar to Delaware’s: the Federal government could greatly benefit from additional revenues, and regulating internet gaming could be a potential windfall. At this time, however, this legislation is at a standstill while the congress is away.
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