Supreme Court turns back Delaware bid to expand sports betting

Delaware wanted to expand sports betting games, in an effort to bring in new revenue for a strapped state budget. But a US appeals court said a federal law prevents it. On Monday, the Supreme Court let that ruling stand.

Delaware has lost its bid to run an expanded array of sports betting games intended to alleviate a state budget crisis.

The US Supreme Court on Monday let stand an appeals court ruling that the state’s plan to run an expanded sports betting operation is barred by a federal antigambling law.

Congress passed the Professional and Amateur Sports Protection Act of 1992 in an effort to prevent sports betting from undermining public confidence in sporting events and to protect the image of professional and collegiate athletics as wholesome entertainment.

The law makes it illegal to bet on sporting events. But the statute includes a clause allowing those states that permitted sports betting between 1976 and 1990 to continue to authorize those activities. The clause “grandfathers” some version of sports betting in four states: Delaware, Montana, Nevada, and Oregon.

Last year, faced with a mounting budget crisis, Delaware decided to offer a broader range of sports betting games on non-Delaware athletic events, including individual games at the professional and college level. The state-run betting operation was set to begin in September 2009.

The four major professional sports leagues – baseball, basketball, football, and hockey – and the National Collegiate Athletic Association filed suit to block the Delaware sports betting operation.

At issue was whether the federal law’s grandfather clause should be read broadly to permit states to operate a wide range of gambling options, or whether the clause should be read narrowly to authorize only the same wagering games offered in the state between 1976 and 1990.

A federal judge declined to issue an injunction, siding with Delaware officials. The leagues appealed to the Third Circuit Court of Appeals in Philadelphia.

The Third Circuit ruled that the Delaware plan exceeded the narrow scope of the federal law’s grandfather clause. The state could run the same games it ran in 1976 but may not expand those games or include new games, the appeals court ruled.

Delaware trimmed back its sports betting operation to comply with the appeals court ruling. But the state also filed an appeal to the US Supreme Court, saying the appeals court’s interpretation of the statute was too narrow. Delaware also complained that the appeals court issued its final judgment before the state was given a full and fair opportunity to argue its case.

“Congress chose to preserve a small group of states’ rights to raise revenues through sports lotteries. That choice should be respected, not ignored,” wrote Washington lawyer Virginia Seitz in her brief on behalf of Delaware Gov. Jack Markell and the Delaware State Lottery Office.

“Delaware is not contending that it is entitled to conduct any sports gaming without regard to the scheme Delaware had in place during the grandfathered period,” Ms. Seitz wrote. “Rather …, Delaware asserts that, at the very least, [the grandfather clause] permits it to offer lotteries that follow the same structure as the prior lotteries, or are akin to those that were part of the prior lottery scheme.”

Lawyers for the sports leagues urged the high court to reject the appeal. “The grandfather clause at issue here authorizes Delaware to conduct a sports gambling scheme only to the extent that the scheme was conducted by the state before PASPA’s enactment,” wrote Washington lawyer Paul Clement in his brief. “Delaware’s proposed expansion into new types of sports lotteries falls well outside of the scope of that grandfather clause.”

The case was Markell v. Office of the Commissioner of Baseball.


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