Federal Judge Rules Against Plan By Delaware for Sports Betting

A federal appeals court yesterday ruled that allowing Delaware to conduct sports betting on single games is a violation of federal law, a decision that the state estimates will cost it roughly $17 million in fiscal 2010.

The panel of three judges in the U.S. Court of Appeals for the Third District in Philadelphia decided to weigh in on the merits of the case instead of ruling on a temporary injunction that was before it.

Earlier this month, a U.S. District Court ruled against prohibiting Delaware from organizing sports wagering prior to a scheduled Dec. 7 trial on the issue. The National Football League and three other professional associations appealed that decision and continued seeking the temporary injunction.

Delaware was planning on implementing sports wagering at three racetracks next month. The state must now alter its fiscal 2010 budget as it will not generate the $17 million of anticipated revenue from the gaming law for this fiscal year.

Officials estimate that the state in future years would have gained more than $50 million of additional revenue annually from legalized sports betting and from an increased share in slot-machine revenue, according to Joe Rogalsky, spokesman for Gov. Jack Markell.

"Obviously I am disappointed with the court's decision and will be meeting with the state's attorneys to evaluate our legal options," Markell said in a prepared statement. "Nevertheless, the state still has the legal authority to offer a sports lottery of parlays involving professional football games, which is a competitive advantage for our three racinos. We look forward to welcoming to Delaware visitors from all over the region to place parlay bets on professional football games."

Parlay betting involves placing a wager on two or more teams.

Rogalsky said in an e-mail that the Delaware Economic and Financial Advisory Council will take up the revenue issue later this fall, as the fiscal 2010 budget included $3 million in sports lottery revenue and $14 million in increased video lottery revenue related to the sports lottery.

Delaware, one of four U.S. states that is exempt from a federal ban on wagering, could appeal yesterday's decision, which would place the issue before the U.S. Supreme Court.

Currently, Nevada is the only state where individuals can place bets on sporting events. Oregon and Montana are also exempt from the federal ban, but have yet to implement wagering.

The NFL, along with the National Basketball Association, the National Hockey League, and the National Collegiate Athletic Association, all plaintiffs in the case, believe sports betting undermines the integrity of athletic events.

Delaware, however, would like their take of the money they expect the gaming would generate. Markell in May signed into law the bill to legalize sports betting at three racetracks.

Some states believe that the federal ban restricts their jurisdictions from gaining additional revenue. In March, New Jersey Sen. Ray Lesniak, D-Union filed suit in U.S. District Court to overturn the federal prohibition. Gov. Jon Corzine has added his name to that lawsuit.

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