Despite opposition, Delaware might bring back sports betting
By Steve Berkowitz, USA TODAY
Legal, lottery-style betting on pro and
college sports events might be coming to Delaware, where several recent
developments could prompt lawmakers to activate the state's exemption
from the 1992 federal law that generally bans such gambling.
A governor who opposed sports betting has
departed after serving the maximum two four-year terms. The state
projects an estimated $600 million budget deficit for the fiscal year
that begins July 1. And the pillars of its gaming industry ? horse
racing and slot machines ? are up against challenges from the
introduction, or approval, of slot machines in Pennsylvania and
Maryland.
"This year is different," state House Speaker Pete Schwartzkopf said.
Delaware's House of Representatives passed a
sports-betting bill last year 28-10, but it didn't get past a state
Senate committee because of disagreements over operational details and
then-Gov. Ruth Ann Minner's opposition.
Schwartzkopf and Senate Majority Leader Tony
DeLuca say a sports-betting bill will be introduced after legislators
reconvene March 17, following six weeks of budget hearings. "A properly
written bill stands a pretty good chance" of becoming law, Schwartzkopf
said.
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Gov. Jack Markell has asked the state's finance
office to talk with companies that would be interested in running a
sports lottery about the amounts of direct and ancillary revenue this
type of betting could produce, spokesman Joe Rogalsky said.
Delaware, Montana, Nevada and Oregon have
exceptions to the federal sports-betting ban because they had forms of
legalized pro and college sports betting before or close to the time
when legislation was introduced in 1991. Nevada was the only state with
largely unlimited sports betting. Delaware and Oregon had operated
sports lotteries, so named because they require players to wager on
more than one outcome in a single bet known as a parlay; this creates
more of an element of chance than is involved with betting on a single
outcome in a sporting event.
Parlay betting on NFL games under the lottery
system was allowed in Oregon from 1989 until 2006, when state lawmakers
voted to end it.
It wasn't because of pressure from the NFL. And
it wasn't because bettor interest had declined; in 2006, sales for the
so-called sports lottery increased for a fifth consecutive year and set
a record of $14 million.
"The rationale was that the state could realize
more economic benefit from hosting NCAA (basketball) tournament games ?
specifically men's games," Oregon Lottery spokesman Chuck Baumann says.
And, Baumann says, the NCAA Division I men's
basketball committee had made clear that if sports betting existed in
Oregon, tournament games would not. In March, first- and second-round
games will be played in Portland, the state's first men's tournament
games since 1983.
As lawmakers in Delaware consider allowing pro
and college sports parlay betting, they say they aren't worrying much
about pressure from the NCAA, NFL or any other sports organization.
And such opposition will come "vigorously," says
Laird Stabler, a lobbyist in Delaware who represents the NFL, NBA,
Major League Baseball and the NCAA, "all of which strongly oppose
states legalizing, and thereby promoting, betting on their sporting
events."
But there are no venues in Delaware large enough
for an event such as the NCAA men's basketball tournament, and
legislators, facing a projected $600 million deficit for fiscal 2010
and threats to the state's lucrative gaming industry, are unlikely to
be swayed by impact on possible NCAA postseason home games for the
University of Delaware or Delaware State, says DeLuca.
"We have seen lobbying for the NFL come in,"
says DeLuca, referring to last year when the state House of
Representatives approved sports-betting legislation that had faltered
in the Senate. "They say they don't want to be associated with
gambling. With no disrespect intended, I think that boat has already
sailed."
DeLuca and Schwartzkopf say the primary
obstacles to passage of a bill by legislators are mechanical issues:
whether sports betting would be limited to casinos at the state's three
horse racing tracks; the cost of licensing and specifics of how the
betting would work.
"There are all kinds of people with vested
interests," DeLuca says. "And I'm sure there will be lively debate, but
I would say (a bill) is going to be successful."
This is not only a function of potential revenue
gain, Schwartzkopf says, but also prevention of projected revenue loss.
Delaware has a lottery, slot machines and horse racing. In fiscal 2008,
it got more than $250 million of its $3.3 billion budget from slots and
the lottery ? $213 million from slots. That makes the lottery and slots
the state's No. 4 income source to personal income taxes, franchise
taxes and abandoned property.
Pennsylvania introduced slot machines in 2007.
Maryland voters in November approved slots, which could start operating
in 2010. Delaware has avoided large revenue losses to Pennsylvania by
adding machines, extending hours and using promotions, says Thomas J.
Cook, the state's deputy secretary of finance. Without sports betting,
Cook says, Delaware could lose $70 million a year in revenue once
Maryland's slots are fully operational.
Stabler says he questions the degree to which sports betting in Delaware could offset that.
"Even without the (budget) deficit, we have to
stay competitive," Schwartzkopf says. "The bottom line with sports
betting is that only Delaware can do it east of the Mississippi
(federal law also allows it in Nevada and Montana). Sports betting can
draw people away from the other states. And while there is money to be
made on sports betting, the real dollars are in the carryover to
casinos" in slot play and meals.