Covington & Burling, the NFL’s Law Firm in the 2003 Case, Has Been Described as “The Intersection of Law and Sports”
Documents published by ESPN show that the U.S. Attorney General Loretta Lynch and lawyers for the NFL haave called sports betting a “game of skill” in various legal arguments over the past 10 years. Skill-based gaming is an important legal distinction when it comes to the continuing debate over legalization of sports wagering. At present, the U.S. federal government views sports betting as a “game of chance”.
The ESPN documents show that NFL lawyers described sports betting, which is illegal in all but 4 US states, as a game of skill during 2003 legal arguments. The files also show that lawyers representing the US Justice Department also described wagering on sporting events as a game of skill. In the United States federal and state legislatures, skill-based games are more likely to be legalized.
Chance: The Basis for Banning Sports Betting
When the Unlawful Internet Gambling Enforcement Act was written, carve-outs were offered for games which were considered skill-based. At the same time, sports betting was viewed as a game of chance and it was specifically banned.
Loretta Lynch on Sports Betting
In the 2013 case United States vs. DiCristina, then-Judge Loretta Lynch wrote, “Sports betting…involves ‘substantial [not slight] skill.’ Sports bettors can employ superior knowledge of the games, teams, and players in order to exploit odds that do not reflect the true likelihoods of the possible outcomes.”
In making her argument, Judge Lynch cited the case of Billy Walters, a notable sports bettor and Las Vegas businessman. In her explanation, the judge described how skilled sports bettors are able to move betting lines, which are set by skilled bookmakers at the various sportsbooks. She described the technique as similar to bluffing in poker.
How Gamblers Influence the Betting Odds
Loretta Lynch described how gamblers can legally influence betting on an event, without influencing the event itself. She wrote, “While a sports bettor cannot [legally] influence the outcome of a game, sports bettors can and do influence the ‘betting line’ or ‘point spread’ in order to improve their odds of making a successful bet.”
Lynch added, “Specifically, a gambler intending to make a large bet on one team may first place one or more smaller, strategic bets on the other team to move the betting line and make it more favorable for the ultimate intended bet.”
Eventually, a federal appeals court upheld Lynch’s ruling in the case. Thus, it appears that at least one appellate court is willing to recognize sports betting as a skill. That could be important when the 3rd Circuit Court of Appeals rules on a lawsuit brought by the NFL and several other sports leagues against the State of New Jersey later this summer.
NFL Lawyers Argued Sports Betting Is a Skill
The NFL’s own words might be used against it. The NFL, NBA, MLB, NHL, and NCAA want the PASPA sports betting law upheld by the Third Circuit Court of Appeals. New Jersey wants the ban lifted, so the state can legalize sportsbooks in the Garden State. But if New Jersey’s push for legalization by the skill-gaming aspect of sports betting, then the NFL has argued against its current stance in the past.
In 2003, the NFL brought a lawsuit to stop the State of Delaware from offering sports-themed lottery scratch-off tickets. In that case, the NFL’s lawyers (DC-based Covington & Burling) argued “the Delaware Constitution does not permit the Delaware Lottery Office to offer such sports gambling“, because sports betting is a game of skill and not a game of chance.
Under the Delaware constitution, the state cannot legalize games of skill, though they could market games of chance. The Covington & Burrows brief read, “Sports betting combines both skill and chance, but the element of chance, though perhaps significant, is not ‘dominant.’ Typical sports bettors gather and analyze information, sometimes in significant quantities, about the nuances of the sports on which they bet.”
Weighing the Probabilities
The argument made by the NFL’s lawyers at the time echoed what Loretta Lynch wrote ten years later. The NFL’s filing said, “They [bettors] read about the teams that are facing-off in particular games-their standings, records, box scores, game summaries, injuries, and recent transactions. They then weigh the probabilities of each team winning and compare their determinations to those of the odds-maker.”
The NFL’s argument in that case worked. Delaware’s administration, accepting that sports betting was a game of skill, scrapped its plan for sports-themed lotto tickets. Once again, the precedent set was sportsbook wagers are a skill-based form of gambling.
Donald Verrilli: “These Are Considered Games of Skill”
The record goes even deeper. In a 1999 U.S. Supreme Court case, current-U.S. Solicitor General Donald Verrilli argued that sports betting was a skill, not luck. The case involved Louisiana’s attempt to restrict advertisements for sportsbooks. Donald Verrilli, who is known for such cases as Capitol Records, Inc. v. Thomas-Rasset, made the skill-versus-chance argument, stating, “Betting on horse races, jai alai, and certain…sports betting may be advertised notwithstanding [the law’s] ban because these are considered games of skill.”
So the U.S. Attorney General, the U.S. Solicitor General, and the National Football League all agree that sports betting is a game of skill. The ESPN article appears to point the way to greater acceptance of skill gaming, which should help New Jersey in what is setting up to be a landmark case in the Third Circuit Court of Appeals.
