Documents show DOJ, NFL have argued sports betting is skill-based
Ryan Rodenberg, ESPN Contributor
U.S. Attorney General Loretta Lynch and lawyers for the NFL -- in legal arguments over the past decade -- have both said they consider sports betting as a game of skill, an important legal distinction that could shape the expanded legalization of wagering on American sports.
According to the documents, discovered by ESPN through searches of public records, both the Justice Department and NFL outside counsel made statements in support of traditional sports gambling as being skill-based in legal proceedings in 2013 and 2003. respectively. Skill-based contests are more likely to be permitted under federal and state law.
Nearly a decade ago, a federal Internet gambling law carved out exceptions for what congressional lawmakers described as games based on "skill." That language has also been a lynch pin in arguments used by opponents of legalized sports betting, historically recognized as a game of chance.
In 2013, Lynch -- then the U.S. Attorney for the Eastern District of New York -- wrote in United States v. DiCristina:
"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."
Lynch pointed to prominent Las Vegas sports bettor and businessman Billy Walters as an example of sports betting being skill. Lynch also explained how certain sports bettors move betting lines, a skillful technique analogous to bluffing in poker:
"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," she wrote. "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."
An appeals court later ruled on the case in the Justice Department's favor.
More than a decade earlier, the NFL was among those pushing to stop Delaware from re-introducing a football-themed sports lottery. A DC-based law firm hired by the league argued that "the Delaware Constitution does not permit the Delaware Lottery Office to offer such sports gambling" because, among other things, sports betting is predominately based on skill, not chance.
In a 2003 memo submitted during Delaware's legislative process, the NFL's long-time legal counsel, Covington & Burling, characterized the proposed football-based lottery as predominately skill-based, and thus would be barred by the state's own constitution. To reach this conclusion, the firm argued that sports betting utilizes skills not seen in luck-based contests.
The lawyers wrote: "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. They 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 position taken by the DOJ and NFL mirrored an argument in a 1999 United States Supreme Court case involving Louisiana's restrictions on gambling advertisements, where current U.S. Solicitor General Donald Verrilli, then in private practice, wrote a brief and touched on the skill versus chance issue.
"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," wrote Verrilli and his co-counsel.
The NFL's strategy in the Delaware legislative process worked. The state scrapped its plans.
Ten years later, New Jersey brought the issue back in a long-simmering lawsuitpitting the Department of Justice, NFL, NBA, NCAA, NHL, and MLB against Gov. Chris Christie over the Garden State's desire to offer Vegas-style sports betting. A decision in the case imminent.
NBA commissioner Adam Silver has spoken out in favor of a federal framework for legalized sports betting. Sen. John McCain has called for Congressional hearings on the topic.
NFL commissioner Roger Goodell, talking to Associated Press Sports Editors in April, said: "We oppose legalized sports gambling. We haven't changed our position on that, and I don't see us changing that going forward at all."
Goodell also said the league is studying daily fantasy games, but is approaching it cautiously.
Ryan Rodenberg, ESPN Contributor
U.S. Attorney General Loretta Lynch and lawyers for the NFL -- in legal arguments over the past decade -- have both said they consider sports betting as a game of skill, an important legal distinction that could shape the expanded legalization of wagering on American sports.
According to the documents, discovered by ESPN through searches of public records, both the Justice Department and NFL outside counsel made statements in support of traditional sports gambling as being skill-based in legal proceedings in 2013 and 2003. respectively. Skill-based contests are more likely to be permitted under federal and state law.
Nearly a decade ago, a federal Internet gambling law carved out exceptions for what congressional lawmakers described as games based on "skill." That language has also been a lynch pin in arguments used by opponents of legalized sports betting, historically recognized as a game of chance.
In 2013, Lynch -- then the U.S. Attorney for the Eastern District of New York -- wrote in United States v. DiCristina:
"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."
Lynch pointed to prominent Las Vegas sports bettor and businessman Billy Walters as an example of sports betting being skill. Lynch also explained how certain sports bettors move betting lines, a skillful technique analogous to bluffing in poker:
"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," she wrote. "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."
An appeals court later ruled on the case in the Justice Department's favor.
More than a decade earlier, the NFL was among those pushing to stop Delaware from re-introducing a football-themed sports lottery. A DC-based law firm hired by the league argued that "the Delaware Constitution does not permit the Delaware Lottery Office to offer such sports gambling" because, among other things, sports betting is predominately based on skill, not chance.
In a 2003 memo submitted during Delaware's legislative process, the NFL's long-time legal counsel, Covington & Burling, characterized the proposed football-based lottery as predominately skill-based, and thus would be barred by the state's own constitution. To reach this conclusion, the firm argued that sports betting utilizes skills not seen in luck-based contests.
The lawyers wrote: "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. They 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 position taken by the DOJ and NFL mirrored an argument in a 1999 United States Supreme Court case involving Louisiana's restrictions on gambling advertisements, where current U.S. Solicitor General Donald Verrilli, then in private practice, wrote a brief and touched on the skill versus chance issue.
"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," wrote Verrilli and his co-counsel.
The NFL's strategy in the Delaware legislative process worked. The state scrapped its plans.
Ten years later, New Jersey brought the issue back in a long-simmering lawsuitpitting the Department of Justice, NFL, NBA, NCAA, NHL, and MLB against Gov. Chris Christie over the Garden State's desire to offer Vegas-style sports betting. A decision in the case imminent.
NBA commissioner Adam Silver has spoken out in favor of a federal framework for legalized sports betting. Sen. John McCain has called for Congressional hearings on the topic.
NFL commissioner Roger Goodell, talking to Associated Press Sports Editors in April, said: "We oppose legalized sports gambling. We haven't changed our position on that, and I don't see us changing that going forward at all."
Goodell also said the league is studying daily fantasy games, but is approaching it cautiously.
