July 24, 2015
For the last two decades, the Professional and Amateur Sports Protection Act (“PASPA”) has made it illegal to wager on sports in the United States, with the exception of a few states that had legalized casino gambling at the time that the law was passed. Historically, sports betting has been recognized as a game of chance. However, this week, ESPN revealed that it had obtained documents previously submitted by the National Football League’s (“NFL”) outside counsel and, more notably, by U.S. Attorney General Loretta Lynch (then the U.S. Attorney for the Eastern District of New York), arguing at different points over the past decade that sports betting is a game of skill.
What were the Attorney General and NFL specifically arguing?
In 2003, the NFL submitted comments during Delaware’s legislative process at a time when the State was considering introducing a football-based sports lottery. At the time, the NFL had opposed the proposed lottery, arguing that the Delaware constitution does not permit sports gambling because it is predominantly a skill-based game, rather than a game based on chance.
In 2013, in a case concerning the legality of certain poker games under federal law, then U.S Attorney Loretta Lynch argued that sports betting involves more than a slight amount of skill due to bettors’ ability to use superior knowledge regarding players, teams, etc., to exploit the odds set by bookmakers, odds that may not otherwise reflect the true likelihood of possible outcomes. Lynch also pointed to a bettors’ ability to place a small wager on one side of a betting line in order to influence the movement of that line in order to get more favorable odds on the other side of the line, as further support that sports gambling is more than a game of chance.
Sports Betting’s Future In Light of the Uncovered Documents
The revelation of these documents, as well as the notable parties involved, has engendered renewed optimism in those that are lobbying for legalized sports betting. The legal distinction between games of skill and games of chance has become highly publicized over the past decade, most notably due to the explosion in popularity of the fantasy sports industry, which enjoys favored status under the Unlawful Internet Gambling Enforcement Act’s (“UIGEA”) narrowly tailored fantasy sports exemption, a topic on which we have written extensively. As the debate regarding legalized sports gambling rages on, it is important to also note that the Commissioners of the National Basketball Association and Major League Baseball have both recently changed their stance on sports betting. With Loretta Lynch now the nation’s top law enforcement officer, it will be interesting for gaming attorneys and casual observers alike to see whether momentum for legalized sports betting gains an even more prominent vocal supporter in the form of a cabinet-level member of the federal government.
If you are interested in learning more about this topic or pursuing a fantasy sports venture, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.
The material contained herein is provided for information purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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