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Delaware should join iMEGA's lawsuit against the Feds...By Hartley Henderson

Last month the state of Delaware was denied the right to offer single game sports betting by the federal appeals courts. Justice Thomas Hardiman of the 3rd Circuit Court ruled that the state could offer no more than it did in 1976, and thus was limited to 3 game parlays on the NFL only. Without question the sports leagues and religious right were instrumental in lobbying for the ruling, and earlier this week a request by Delaware for an en banc hearing with the court was turned down. Delaware has said they won't appeal further, but certainly they can't be happy with the ruling. The 3 game parlay lottery has generated a reasonable amount of revenue the first 2 weeks, but surely is has generated nothing close to what the state was expecting to generate. More importantly, once the novelty of the sports lottery wears off and people become weary of losing parlays, they will surely stay away from Delaware's offering and return to local bookies or the internet.

In the past gambling laws have always belonged to the state, but in the matter of Delaware the federal courts have taken charge. As a matter of fact, it seems that the federal politicians and courts are attempting to take as much control of gambling in the United States as possible. This began in 1997 with John Kyl and has continued since. The courts are fighting New Jersey on their efforts to offer sports betting and are prepared to take on California in their efforts to offer a state run poker network. What is most bothersome is that the entities that have no vested interest are taking up lobbying positions as well. The sports leagues are challenging Barney Frank's efforts to repeal the UIGEA, even though Frank has taken sports betting out of the equation. And the leagues, religious groups and other "interests" are preparing to lobby against California's poker initiative as well, even though their organizations have no vested interest. (It's notable that Focus on the Family has been fighting gambling since it started up, even equating video lottery terminals to crack cocain---and they were instrumental in pressuring the federal government to finish the regulations relating to the UIGEA. But it appears Focus on the Family has never challenged the Catholic Church over church run bingos and raffles). Consequently, to many the issue is no longer about revenue generation, but rather about state's rights. Delaware, New Jersey, California and now Montana (along with other states) are waiting in the wings and want the right to offer whatever gambling they see fit---as has been the case for the last few decades. The federal courts didn't intervene when states decided to offer lotteries, horse racing and casinos. So why do they think it's their business to stick their noses in now?

Joe Brennan Jr, the founder and chairman of iMEGA, which is initiating the lawsuit to fight the constitutionality of PASPA, and which will no doubt fight for state's rights in any initiative, stated the following to me when asked what direction he believed Delaware should take now:

We're disappointed the 3rd Circuit did not grant Delaware's request. Delaware is a state, and they deserved a chance to be heard on this question. The option of appealing to the US Supreme Court is still open, but it seems less likely as time passes.

I feel bad for Gov. Markell, since he's been an unflinching champion of a rational, state-regulated approach to sports betting. The leagues and the NCAA pressured him and the state legislature, and he brushed them off, because the leagues and the NCAA have no business telling a state what it can do.

The leagues and the NCAA won this round, and I'm sure they were as surprised as anyone. But honestly, this one was the easy round, a warm-up for the big fight that's coming. I'm sure that the leagues have had attorneys look at PASPA, and they know it's as weak as we do. Why else would they be prompting Sen. Hatch and Sen. Kyl to write letters to US Attorney-General Holder? Why else would they be taking such a hard-line stance on any i-gaming legislation in Washington, or have their lobbyists actively seeking support on the Hill to shore up PASPA? We've been saying this for a while: PASPA has a glass jaw.

The irony is [that] the US Department of Justice, under Pres. George H.W. Bush, opposed PASPA when it was enacted by Congress, saying the law violated Federalism and intruded on the states' right to determine this question. And they were correct.

If Delaware is not going to appeal to the Supreme Court, we hope they would join our suit. Until now, Delaware has understandably tried to get the best deal for themselves under PASPA, which would have been an exclusive franchise on full Vegas-style sports betting here in the East. It didn't pan out, since the limited parlay betting the 3rd Circuit allowed is not the draw that single-game betting and prop bets provide.

Now, they have the opportunity to join our suit and, have a shot at a much better revenue stream. Sure, New Jersey would have it, too, but Delaware is close enough to Philadelphia and Baltimore that it can still see meaningful traffic in its sports books. It's better to have half of something than 100% of nothing.

So we'll wait and see what Delaware decides. Frankly, whatever Delaware does only strengthens our suit. If they're successful and get full sports betting, that shows how PASPA violates the rights of other states like New Jersey, by denying them what Delaware has. If Delaware isn't successful, then it's one more example of how PASPA intrudes on states' rights. Still, we'd like to have them on board.

PASPA is going down. It's just a question of when and how.

Without question the neo-cons still have strong control over the courts; and it appears, aside from Frank and a few other Democrats, that few are willing to challenge the NFL, Focus on the Family and other organizations that have a lot of clout. The gambling community in the U.S. had hoped that the current regime would take a less antagonistic attitude towards gambling, which it deemed is a personal rights issue, but for now it seems the current regime have just taken the baton from the Republicans and have run with it.

For the sake of state's rights and personal freedom, let's hope that other states join New Jersey and iMEGA and take on the federal courts over PASPA; which, if successful, could lead to a repeal of the UIGEA and other laws which are on shaky constitutional ground, at best.

Hartley Henderson

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