Four professional sports leagues and the National Collegiate Athletic Association sued the state of Delaware yesterday, hoping to prevent the state from starting a sports-betting lottery when the NFL season begins Sept. 10.
Faced with budget challenges, Delaware hopes to raise $50 million in profit in the first year alone.
The focus of the complaint, filed in federal district court in Wilmington, is Delaware's plan for betting on single games, which is much more appealing to gamblers than multigame lotteries.
Major League Baseball, the NFL, NHL, NBA, and the NCAA fear that such interest will prompt gamblers to try to fix games or illegally obtain information to win bets.
"Sports lotteries involving single-game betting threaten the integrity of professional and amateur sports and are fundamentally at odds with the principle - essential to the success of MLB, the NBA, the NCAA, the NFL, and the NHL - that the outcomes of professional and collegiate athletic contests must be perceived by the public as being determined solely on the basis of honest athletic competition," the complaint said.
Delaware Gov. Jack Markell and state Lottery Director Wayne Lemons were named in the complaint. An expedited hearing was requested given the state's plan to start sports betting by Sept. 10.
"Delaware's sports lottery will help pay for our core government services like our teachers and police and will also create new jobs in our state. That's our focus," Joe Rogalsky, Markell's communications director, said in a statement. "We asked for and received a Delaware Supreme Court advisory opinion prior to moving forward to ensure we are in compliance with state law. We invited the NFL to sit down and share their concerns. They decided instead to sue."
Delaware has had slot-machine gambling at its three casinos attached to racetracks since 1995. The state passed a law to legalize sports betting earlier this year.
Delaware, Nevada, Oregon and Montana are the four states that were granted exceptions to the Professional and Amateur Sports Protection Act, which Congress passed in 1992 to stop the expansion of state- and tribal-sponsored sports gaming.
Delaware's three casinos have been preparing to offer sports betting at their venues.
In the complaint, the leagues argue that the grandfather clause in the federal law only allows games of chance that were in use before the law was passed. Delaware did not have single-game betting in 1976 when it had three NFL-oriented lotteries.
NFL gambling draws the most action in Las Vegas and the NFL is especially interested in stopping Delaware before it gets moving.
"We are sensitive to the economic issues in Delaware and all other states," NFL spokesman Brian McCarthy said in a statement. "That is the primary reason our office wrote Governor Markell on April 7 and told him we would be willing to discuss ways - short of using our games as betting vehicles - that we might assist him and the legislature in helping to close the budget gap as we have done recently in other states. The Governor responded five weeks later on May 14 that he was signing legislation that day which, in effect, uses our games as betting vehicles. We could not sit on the sidelines and had to move forward with the other leagues and the NCAA."
Dover Downs Hotel and Casino is home to 3,100 slot machines and also offers harness track racing and simulcasting. Denis McGlynn, president and chief executive officer of Dover Downs Gaming and Entertainment Inc., declined comment.
Atlantic City operators are closely watching the developments in Delaware. New Jersey state senator Ray Lesniak (D., Union) filed a federal lawsuit in March against the Justice Department, seeking to overturn the ban on sports betting in other states.
Last month, Gov. Corzine said he supported legalizing sports betting in New Jersey.
Mark Juliano, chief executive officer of Trump Entertainment Resorts Inc., which owns the three Trump casinos in Atlantic City, said Atlantic City casinos want sports betting as another revenue source.
"Delaware is in a different situation than we are," he said yesterday. "It was smart enough to grandfather sports betting in when it did.
"We have to go back and actually challenge the federal law because we did not ask for that exemption," Juliano said. "We think it's worth pursuing."
Juliano said sports betting was "an amenity we would love to offer because it helps you create an environment where customers can watch the games, bet, and do everything else we like them to do when they are here - which is eat in the restaurants, go to the bars, and stay in the hotels.
"Anytime we have any kind of gaming that we can add to the existing games that we have, we like to do that," he said.
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