No. 09-214
In the
SUPREME COURT OF THE
UNITED STATES OF AMERICA
DEUCE McCALLISTER, Governor of the State of Tulania; RONALD HUGHES, Director of
the Tulania State Lottery Office,
Petitioner,
versus
MAJOR LEAGUE BASEBALL; NATIONAL BASKETBALL ASSOCIATION; NATIONAL
FOOTBALL LEAGUE; NATIONAL HOCKEY LEAGUE; MAJOR LEAGE SOCCER;
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION,
Respondent.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT
OF APPEALS FOR THE FOURTEENTH CIRCUIT
BRIEF FOR THE PETITIONERS
Team Number Thirteen (13)
QUESTIONS PRESENTED
I. WHETHER THE PROFESSIONAL AND AMATEUR SPORTS PROTECTION ACT
PROHIBITS TULANIA FROM OFFERING SPORTS LOTTERIES TO GENERATE
REVENUES TO HELP ALLEVIATE ITS SUBSTANTIAL BUDGET DEFICITS AND
SATISFY ITS CONSTITUTIONAL BALANCED-BUDGET OBLIGATIONS.
II. WHETHER TULANIA’S PROPOSED SPORTS LOTTERY VIOLATES THE
TULANIA CONSTITUTION.
STANDARD OF REVIEW
For the purposes of this review, the United States Supreme Court will review all matters de novo.
i
TABLE OF CONTENTS
Questions Presented ........................................................................................................................ i
Standard of Review .......................................................................................................................... i
Table of Authorities .........................................................................................................................v
Preliminary Statement ................................................................................................................. viii
Statement of the Case.......................................................................................................................1
Summary of the Argument...............................................................................................................7
Argument .........................................................................................................................................8
I. OFFERING SPORTS LOTTERIES TO GENERATE REVENUES TO ALLEVIATE
SUBSTANTIAL BUDGET DEFICITS AND SATISFY CONSTITUTIONAL
BALANCED-BUDGET OBLIGATIONS DOES NOT VIOLATE THE
PROFESSIONAL AND AMATEUR SPORTS PROTECTION ACT ...............................8
A. The plain language of the PASPA exemption allows Tulania to reintroduce a
sports lottery under state control because Tulania conducted such a scheme at
some time between January 1, 1976, and August 31, 1990 ...........................................8
1. The term “scheme” in PASPA should be broadly interpreted to
authorize lotteries akin to those that were part of Tulania’s
previous scheme .................................................................................................8
2. Under the canon of parallel construction, PASPA’s § 3704(a)(1)
exemption language “to the extent that the scheme was conducted by
that State” should be read as a conditional term to trigger the statutory
exemption for Tulania’s sports wagering scheme .............................................9
3. As the Leagues concede, the Tulania Sports Lottery need not be confined
to the identical attributes or magnitude of its 1976 operation, Tulania
should be allowed to modify its lottery to include other sports and singlegame betting .......................................................................................................9
B. Since PASPA’s exemption language is “at least ambiguous,” the Court should
analyze PASPA’s legislative history to determine if Congress unmistakably
intended to upset the existing balance of state and federal powers .............................10
1. Since statutory language and legislative history does not make it
“unmistakably clear” that Congress intended to upset the existing balance
of state and federal powers, this Court should interpret the statute to
maintain the current balance ............................................................................12
ii
2. Tulania’s Sports Lottery is designed to raise revenue for the state and is
thus a core sovereign function designed to comply with its constitutional
balanced-budget requirement ...........................................................................13
3. By crafting a tailored exemption for Tulania and other states, Congress
has demonstrated a desire to respect States’ rights and federalism
principles ..........................................................................................................14
C. The proposed Sports Lottery will not harm the integrity of the respective
sports leagues ...............................................................................................................14
1. The mere existence of sports wagering will not injure a league’s interests
since sports gambling is already a multibillion dollar industry .......................15
2. The Leagues’ existing entanglements with the gambling industry
undermine their reputational harm argument ...................................................15
II. TULANIA’S PROPOSED SPORTS LOTTERY DOES NOT VIOLATE THE
TULANIA CONSTITUTION. ..........................................................................................16
A. The proper standard to determine whether the chance element of a lottery is met
is the American dominant factor rule...........................................................................16
1. The American dominant factor rule is the proper standard to apply
because the majority of United States jurisdictions have accepted it as
the appropriate rule ..........................................................................................16
2. The Tulania Legislature intended to carve out a specific exception to
the Constitutional ban on gambling and specifically contemplated sportsbased lottery games ..........................................................................................17
3. The Tulania Legislature did not violate Tulania’s policy against gambling
when it carved out an exception permitting State-run lotteries .......................18
4. The English Rule is Too Narrow and Restrictive ............................................19
B. Under the American dominant factor rule, Tulania’s proposed Sports Lottery is
in accordance with the Tulania Constitution. ..............................................................20
1. Sports gambling is subject to unpredictable and uncontrollable
variables so that the element of chance is dominant and thwarts the
exercise of skill ................................................................................................20
2. The use of a point spread or betting line equalizes the odds and injects a
further factor of chance ....................................................................................21
3. As with parlay betting, chance is the dominant factor when betting on
single games .....................................................................................................22
iii
C. Even under the English rule, Tulania’s proposed Sports Lottery is in accordance
with the Tulania Constitution.......................................................................................23
Conclusion .....................................................................................................................................23
Appendix ..................................................................................................................................... A-1
iv
TABLE OF AUTHORITIES
Cases
Alaka v. Att’y Gen. of the United States
456 F.3d 88 (3d Cir.2006)........................................................................................................10
Allied Stores of Ohio v. Bowers
358 U.S. 522 (1959) .................................................................................................................13
Aprile v. Delaware
143 A.2d 739 (Del. 1958) ........................................................................................................18
Bell Gardens Bicycle Club v. Dept. of Justice
42 Cal. Reptr. 2d 730 (Cal. Dist. Ct. App. 1995)............................................................... 16-17
BFP v. Resolution Trust Corp.
511 U.S. 531 (1994) ..................................................................................................... 10-11, 13
Boardwalk Regency Corp. v. Travelers Express Co.
745 F.Supp. 1266 (E.D. Mich. 1990).......................................................................................18
Bruesewitz v. Wyeth Inc.
561 F.3d 233 (3d Cir. 2009).....................................................................................................11
Caribe Hilton Hotel v. Toland
307 A.2d 85 (N.J. 1973)...........................................................................................................18
Commonwealth v. Lake
57 N.E.2d 923, 925 (Mass. 1944) ...................................................................................... 16-17
Commonwealth v. Laniewski
98 A.2d 215 (Pa. Super. 1953)...........................................................................................20, 22
Dep’t of Revenue of Or. v. ACF Indus., Inc.
510 U.S. 332 (1994) .................................................................................................................13
Disabled in Action of Pa. v. Se. Pa. Transp. Auth.
539 F.3d 199 (3d Cir. 2008).....................................................................................................12
Gregory v. Ashcroft
501 U.S. 452 (1991) ..................................................................................................... 11, 13-14
H.J. Inc. v. Nw. Bell Tel. Co.
492 U.S. 229 (1989) ...................................................................................................................8
v
Hayden v. Pataki
449 F.3d 305 (2d Cir. 2006)............................................................................................... 11-12
In re Advisory Opinion to the Governor
856 A.2d 320 (R.I. 2004) .........................................................................................................19
Jansen v. United States
369 F.3d 237 (3d Cir. 2004).......................................................................................................8
Johnson v. Phinney
218 F.2d 303 (5th Cir. 1955) ...................................................................................................16
Lawrence v. State Tax Comm’n of Miss.
286 U.S. 276 (1932) ...........................................................................................................13, 18
M’Culloch v. Maryland
17 U.S. 316 (1819) ...................................................................................................................13
Morrow v. State
3511 P.2d 127 (Alaska, 1973)............................................................................................17, 19
Nason v. INS
394 F.2d 223 (2d Cir. 1968)................................................................................................... 8-9
National Football League v. Governor of Delaware
435 F.Supp. 1372 (D. Del. 1977) ............................................................................ 15-16, 21-23
Nixon v. Mo. Mun. League
541 U.S. 125 (2004) .................................................................................................................12
Oneida County Fair Bd. v. Smylie
386 P.2d 374 (Idaho 1963)...........................................................................................19, 21, 23
Pa. Dep’t of Corr. v. Yeskey, 524 U.S. 206 (1998)
524 U.S. 206 (1998) .................................................................................................................13
Paradissiotis v. Rubin
171 F.3d 983 (5th Cir. 1999) .....................................................................................................9
People ex rel. Ellison v. Lavin
71 N.E. 753, 754 (N.Y. 1904) ..................................................................................................20
Russello v. United States
464 U.S. 16 (1983) ...................................................................................................................10
vi
Salinas v. United States
522 U.S. 52 (1997) ...................................................................................................................11
Seattle Times Co. v. Tielsch
495 P.2d 1366 (Wash. 1972) (en banc)....................................................................................20
State ex Inf. McKittrick v. Globe-Democrat Pub. Co.
110 S.W.2d 705 (Mo. 1937) ........................................................................................ 17, 19-20
United States v. Marder
48 F.3d 564 (1st Cir 1995) .......................................................................................................16
United States v. Oakland Cannabis Buyers Coop.
532 U.S. 483 (2001) .................................................................................................................15
Will v. Mich. Dep’t of State Police
491 U.S. 58 (1989) ...................................................................................................................13
Statutes
28 U.S.C. §3701 ....................................................................................................................... viii, 8
28 U.S.C. § 3702 ..............................................................................................................................2
28 U.S.C. § 3704 ..................................................................................................... 1-3, 7-10, 12, 14
Legislative Materials
S. REP. NO. 102-248 (1991) ........................................................................................... 2-3, 10, 12
138 CONG. REC. S12973 (June 2, 1992) (Sen. DeConcini) .............................................. 3, 12-13
Miscellaneous
Black’s Law Dictionary (8th ed. 2004) ............................................................................................8
http://dictionary.reference.com/browse/scheme ..............................................................................8
vii
PRELIMINARY STATEMENT
This appeal arises out of a decision of the United States Court of Appeals for the
Fourteenth Circuit (“Fourteenth Circuit”) (Ricketts, J.). (CCR.31). Major League Baseball,
National Basketball Association, National Football League (“NFL”), National Hockey League,
Major League Soccer, and National Collegiate Athletic Association (collectively, “Leagues”)
brought this action against Petitioner, Deuce McCallister, Governor of the State of Tulania, and
Ronald Hughes, Director of the Tulania State Lottery Office (collectively, “Tulania”), claiming
that Tulania’s proposed Sports Lottery violates the Professional and Amateur Sports Protection
Act (“PASPA”), 28 U.S.C. §3701 et. seq, and the Tulania Constitution. Id.
The United States District Court for the Southern District of Tulania (the “District
Court”) (Lannin, J.), held that, as a matter of law, the Tulania Sports Lottery constitutes a
constitutionally legal lottery under the Tulania Constitution and does not violate PASPA.
(DCR.412). On appeal, the Fourteenth Circuit held that Tulania’s proposed Sports Lottery, as a
matter of law, violated PASPA and, in its entirety, was unconstitutional under the Tulania
Constitution. (CCR.18). Tulania now appeals this decision.
1
“CCR.” refers to the record for the United States Court of Appeals for the Fourteenth Circuit.
“DCR.” refers to the record for the United States District Court for the Southern District of
Tulania.
2
viii
STATEMENT OF THE CASE
FACTUAL BACKGROUND
Tulania projected a record $800 million budget deficit for fiscal year 2010 (DCR. 23). In
light of the dire economic situation, Tulania Governor DEUCE MCCALLISTER proposed
multiple solutions to alleviate Tulania’s financial woes, including reinstituting a Sports Lottery
the state had previously run in 1976 (DCR.21, 23). The Tulania State Legislature approved the
Governor’s proposed Sports Lottery Act and gaming proposal (DCR.23), and also passed a bill
granting a Lottery Director the authority to reestablish the Lottery for certain sporting events
(excluding collegiate sports contests involving Tulania colleges or universities, and amateur or
professional contests involving Tulania teams) to provide revenue to the State (DCR.24). The
bill required the Lottery Director to administer the Sports Lottery to maximize State income
while minimizing financial risk. Id. The bill drew authority from the Professional and Amateur
Sports Protection Act (“PASPA”) § 3704(a)(1) exemption clause, and authorized a Sports
Lottery to be conducted at the three racing casinos operating in Tulania at that time. Id. The
Tulania State Legislature further directed that the proceeds from the Sports Lottery be divided
equally between the casinos and the State. Id.
The relationship between gambling and sports is well ingrained in American culture, as
there is an immense market for the activity. Id. Estimates of the scope of illegal sports betting in
the United States range up to $380 billion annually, and the Internet has aided the development
of virtual sports-betting casinos. Id. Further, there is significant overlap between sports leagues
themselves and gambling, as many team owners also own casinos. Id. Additionally, Leagues
have allowed broadcast affiliates to provide viewers with betting-related information like point
1
spreads and injury reports, casinos and state lottery affiliates sponsor teams, and leagues have
used casinos to host league related events. Id.
PASPA LEGISLATION
The United States Congress enacted PASPA on January 1, 1993 (DCR.25). Under
PASPA, no person or governmental entity may sponsor, operate, advertise or promote:
a lottery, sweepstakes, or other betting, gambling, or wagering scheme based,
directly or indirectly (through the use of geographical references or otherwise), on
one or more competitive games in which amateur or professional athletes
participate, or are intended to participate, or on one or more performances of such
athletes in such games.
28 U.S.C. § 3702. Congress enacted PASPA based on its findings that sports gambling threatens
the integrity, character, and public confidence in sports, instills inappropriate values,
misappropriates goodwill, and dilutes the service marks of sports organizations (DCR. 25-26,
citing S. REP. NO. 102-248, at 4-5 (1991), available at 1991 WL 258663, reprinted in 1992
U.S.C.C.A.N. 3553, 3555.)
However, PASPA includes four specific exceptions to the otherwise general ban,
including one permitting certain states to continue to operate sports-based gambling schemes if
that state did so between 1976 and 1990 (DCR. 25). Pursuant to this exception, PASPA’s general
prohibition against sports betting does not apply to:
A lottery, sweepstakes, or other betting, gambling, or wagering scheme in
operation in a State . . ., to the extent that the scheme was conducted by that State
. . . at any time during the period beginning January 1, 1976, and ending August
31, 1990.
28 U.S.C. § 3704(a)(1). The Senate Report issued when PASPA was passed rejected the
contention that Tulania, and other states within the exception, were prohibited from modifying
the scheme offered during the specified period (DCR. 26). The report explained:
Under paragraph (1) of subsection (a), Oregon and Delaware [and Tulania] may
conduct sports lotteries on any sport, because sports lotteries were conducted by
2
those states prior to August 31, 1990. Paragraph (1) is not intended to prevent
Oregon or Delaware [or Tulania] from expanding their sports betting schemes
into other sports as long as it was authorized by State law prior to enactment of
this Act. At the same time, paragraph (1) does not intend to allow the expansion
of sports lotteries into head-to-head betting....
S. REP. NO. 102-248, at 9-10. Further, the Report of the Senate Judiciary Committee, chaired by
Senator Biden, stated that § 3704(a)(1) exempted sports gambling operations permitted by
Tulania state law—and the other states within the exemption—since, “[the committee] has no
wish to apply this new prohibition retroactively to [Tulania]. . .which instituted sports lotteries
prior to the introduction of [the] legislation. . . . Therefore, [PASPA] provides an exemption for
those sports gambling operations which already [were] permitted under State law . . .” (DCR.
31). The prime Senate sponsor also introduced the a statement along with the bill, explaining:
The intent of the legislation is not to interfere with existing laws, operations or
revenue streams. Therefore it provides an exemption for those sports gambling
operations which already are permitted under State law.... Let me make it clear
that the grandfather provision only allows those States that have sports gambling
authorized by State law to continue to do what they are doing now or could do
under State law.
138 CONG. REC. S12973 (1992) (Sen. DeConcini).
TULANIA’S PLAN
Tulania planned to reintroduce its Sports Lottery on September 1, 2009, just before the
start of the NFL regular season (DCR.24). Though NFL games were to be the Lottery’s primary
focus, Tulania intended for the scheme to apply to all major professional and college sports—
similar to its 1976 plans (DCR.20, 24). Governor McCallister sought to alleviate the financial
emergency by implementing the following Sports Lottery structure:
(i)
“Single Game Lottery,” in which players would be asked to select the
winning team in any given sports contest with a line, such as a “point
spread”;
3
(ii)
“Total Lottery,” in which players would have to select whether the total
points scored by both teams in a single game would be over or under a
specified number (an “over/under” bet);
(iii)
“Parlay Lottery,” in which players would be asked to correctly choose the
outcomes on multiple elements, such as the winners of two or more sports
contests, two or more over/under bets, or some combination of winners and
over/under bets.”
(DCR.21).
Thus, Tulania’s Sports Lottery would feature both point spread and money line bets, both
common in sports gambling (DCR.22). A point spread is the betting line that is set for a sporting
event where the favorite “loses” points and the underdog “gains” points. Id. A money line wager
involves picking a winner without a point spread. It is a linemaker’s projection of the probability
that a certain team will win, or that some other combination of events will occur. Id. In the
proposed betting scheme, the profits and commissions from the wagers would be paid to the
Sports Lottery to help alleviate Tulania’s budget crisis. Id.
In sports gambling, the point spread can be modified until a sporting event begins
(DCR.23). The betting lines are set by the linemakers to induce half of all dollars to be wagered
on one team in the event and half on the other. Id. For this reason, the point spread is often
readjusted to even the betting should a disproportionate amount of bets be placed on one side. Id.
The system mirrors an efficient market in that odds makers will respond to the flow of wagers
and readjust a line until bets are evenly split. Id. However, the point spread is fixed for each
bettor at the time that bettor places his or her wager. Id.
Tulania’s modern Sports Lottery would permit betting on both single games and parlay
bets. A parlay bet is a wager in which a bettor selects the outcome of more than one sporting
event or more than one element of a sporting event, such as the winner of two or more overunder bets or the winner of one or more contests and one or more over-under bets. Id. This
4
slightly differs from the 1976 Sports Lottery, which only offered parlay betting before being
discontinued (DCR.20).
PRIOR LOTTERY
In 1973, Tulania amended its Constitution to specifically authorize “Lotteries under State
control for the purpose of raising funds” (DCR.19). A year later, the State Legislature authorized
sports-based State-run lottery games that “affiliate the determination of the winners of a game
with any racing or sporting event held within or without the State” (DCR.20). Following this
authorization, Tulania introduced a parlay lottery for NFL games in 1976. Id. However,
following the 1976 NFL season and just prior to implementing its plans to extend the lottery
beyond NFL games and allowing single-game betting in other sports, Tulania discontinued its
Sports Lottery. Id.
In its 1976 Sports Lottery, Tulania conducted three different games as part of the
“Scoreboard” Sports Lottery. Id. In the first game, “Football Bonus,” Tulania divided the
fourteen NFL games—the amount played each week at that time—into two seven-game pools.
Id. To win, a bettor had to correctly match the winners of all seven sporting events. Id. If a bettor
correctly predicted all fourteen games, he or she was entitled to a bonus. Id. The prizes were
awarded on a pool, or pari-mutuel basis. Id.
In Tulania’s second game, “Touchdown,” bettors chose the winners of multiple NFL
games and one of three possible point spread ranges for each game. Id. A player would win if he
or she correctly selected the winning team as well as the point spread range in each contest. Id.
As with “Football Bonus,” awards in “Touchdown” were paid on a pari-mutuel basis. Id.
“Touchdown II” then replaced “Touchdown” mid-season. Id. In this version, a bettor selected a
team to beat the published point spread in each of twelve games. Id. To win, players had to
5
correctly select a minimum of four and a maximum of twelve NFL teams to outperform the
published point spread (DCR.21). Touchdown II offered a fixed payout based upon the number
of teams a bettor correctly guessed to beat the point spread. Id.
Independent of Tulania, Delaware introduced an identical sports lottery, under the
authority of identical modifications to its Constitution, during the same year. Id. However, in
December 1976, the Delaware Lottery Office offered an inefficient line. Id. Bettors noticed the
“bad line” and wagered heavily to take advantage of the mistake. Id. Delaware sustained a great
financial loss from this error, and subsequently discontinued its sports lottery. Id. Fearful of a
similar mistake, Tulania discontinued its sports lottery at the end of the 1976 season. Id.
6
SUMMARY OF THE ARGUMENT
By reinstituting its 1976 Sports Lottery scheme with slight modifications, Tulania has not
violated PASPA. Tulania has complied with the provisions set forth in the § 3704(a)(1)
exemption since the state had previously conducted a sports wagering scheme during the
grandfathered period. Furthermore, under the “clear statement” rule, this Court should construe
any ambiguity in PASPA’s language in favor of Tulania since the exemption allows Tulania to
exercise a core sovereign power and would not disrupt the federal-state balance. Moreover, as
courts have found, the existence of sports gambling does not actually pose a threat to the
Leagues as it is already a multibillion-dollar industry, and the Leagues have profited from it.
Further, Tulania’s proposed Sports Lottery does not violate the Tulania Constitution. The
American dominant factor rule is the proper standard to determine whether the chance element of
a lottery is met because a majority of jurisdictions have adopted it, it falls within a valid
Amendment permitting State-run lotteries, and the Legislature intended to circumvent Tulania’s
general public policy against gambling. Under both the American and English standards,
Tulania’s Sports Lottery contains the requisite chance element since sports betting is subject to
unpredictable variables, which neutralize the exercise of skill, while a point spread equalizes the
odds.
7
ARGUMENT
I. OFFERING SPORTS LOTTERIES TO GENERATE REVENUES TO ALLEVIATE
SUBSTANTIAL BUDGET DEFICITS AND SATISFY CONSTITUTIONAL BALANCEDBUDGET OBLIGATIONS DOES NOT VIOLATE THE PROFESSIONAL AND
AMATEUR SPORTS PROTECTION ACT.
A. The plain language of the PASPA exemption allows Tulania to reintroduce a sports
lottery under state control because Tulania conducted such a scheme at some time
between January 1, 1976, and August 31, 1990.
1. The term “scheme” in PASPA should be broadly interpreted to authorize lotteries
akin to those that were part of Tulania’s previous scheme.
Though 28 U.S.C. § 3701 defines terms in PASPA, it notably omits a definition for
“scheme.” Regardless, any interpretation of “scheme” within the exemption language of §
3704(a)(1) would protect Tulania’s right to conduct its proposed Sports Lottery. As this Court
has noted, “‘scheme’ is hardly a self-defining term. . .” and is thus open to interpretation since “a
‘scheme’ is in the eye of the beholder. . .” H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 241 n.3
(1989). Black’s Law Dictionary defines scheme as, “[a] systematic plan, a connected or orderly
arrangement, esp[ecially] of related concepts.” BLACK’S LAW DICTIONARY (8th ed. 2004).
Though there are multiple common usage definitions, the District Court accepted a definition of
scheme as “any system of correlated things, parts, etc., or the manner of its arrangement.”
Dictionary.com, http://dictionary.reference.com/browse/scheme (last visited Jan. 9, 2010). The
Circuit Court differed, noting that a scheme is more commonly understood as “a plan, design, or
program of action to be followed; project.” Id. Several lower courts have interpreted “scheme” to
include certain specifics. See, e.g., Nason v. INS, 394 F.2d 223, 227 (2d Cir. 1968); Jansen v.
United States, 369 F.3d 237, 249 (3d Cir. 2004).
In 1976, Tulania debuted a parlay lottery featuring NFL games with plans to extend it to
other sports as part of the same revenue-raising scheme. However, the lottery was discontinued
at the end of the 1976 NFL season before the planned expansion. Despite being discontinued
8
before actually expanding into other sports and single-game betting, this Court should not ignore
the breadth of Tulania’s plans for its 1976 scheme. Even if we accept the Nason court’s narrow
definition of scheme as “a specific, more or less articulated and coherent plan or program of
future action . . .,” Tulania still had definite plans to expand its Lottery as part of the same
revenue-generating operation. Nason, 394 F.2d at 227. Tulania should not be limited to the three
games that were actually conducted, since the language in § 3704(a)(1) does not require such a
strict limitation. Instead, § 3704(a)(1)’s broad language should permit Tulania to offer lotteries
that follow the same structure as the prior lotteries, or are akin to those that were part of the prior
scheme.
2. Under the canon of parallel construction, PASPA’s § 3704(a)(1) exemption language
“to the extent that the scheme was conducted by that State” should be read as a
conditional term to trigger the statutory exemption for Tulania’s sports wagering
scheme.
The phrase “to the extent that” is reasonably read as a conditional term that a State either
does or does not satisfy. See Paradissiotis v. Rubin, 171 F.3d 983, 987 (5th Cir. 1999). Since the
same term, “to the extent that,” is used in § 3704(a)(1) and § 3704(a)(3), a reasonable statutory
reading requires a parallel understanding. In both exemptions, the first clause identifies a broad
exception (i.e. lotteries, wagering schemes), and the second clause respectively uses the phrases
“to the extent that” or “but only to the extent that,” to introduce conditions that must be satisfied.
There is no clear reason why the phrase would have a different meaning in § 3704(a)(1) than it
would in § 3704(a)(3). Thus, § 3704(a)(1) should be read as permitting a State to operate a sports
lottery only if it conducted a sports lottery at any time between 1976 and August 1990.
3. As the Leagues concede, the Tulania Sports Lottery need not be confined to the
identical attributes or magnitude of its 1976 operation, Tulania should be allowed to
modify its lottery to include other sports and single-game betting.
If “to the extent” is read as conditional language, Tulania should be allowed to reinstitute
9
its Sports Lottery and include modifications akin to the 1976 scheme. The Leagues, however,
contend that the “to the extent” clause means to the “degree” a scheme was “actually conducted.”
Yet the Leagues ultimately contradict themselves, conceding that the phrase “to the extent that
the scheme was conducted” does not confine the Tulania Sports Lottery to the same degree of its
1976 operation. Tulania need not use “identical venues,” offer identical parlay games, or limit
the duration of the lottery to an identical four months (DCR.32). Thus, the Leagues’ own
standard would allow wagering on a larger scale than the identical “extent,” or “degree,” that
occurred in 1976.
Further, the Leagues argue that Tulania’s interpretation wrongly conflates “authorized”
and “conducted,” since “[i]t is generally presumed that Congress acts intentionally and
purposefully when it includes particular language in one section of a statute but omits it in
another.” BFP v. Resolution Trust Corp., 511 U.S. 531, 537 (1994); see also Alaka v. Att’y Gen.
of the United States, 456 F.3d 88, 97-98 (3d Cir.2006) (“It is a fundamental canon of statutory
construction that where sections of a statute do not include a specific term used elsewhere in the
statute, the drafters did not wish such a requirement to apply.”). Under the Leagues’ argument,
its own interpretation is invalid. Congress explicitly used the phrase “actually was conducted” in
§ 3704(a)(2)(B), yet did not use this language in § 3704(a)(1). In fact, that term was struck from
an earlier version of the bill, see S. REP. NO. 102-248, at 2, and “[w]here Congress includes
limiting language in an earlier version of a bill but deletes it prior to enactment, it may be
presumed that the limitation was not intended.” Russello v. United States, 464 U.S. 16, 23-24
(1983). Thus, PASPA’s language is at least ambiguous.
B. Since PASPA’s exemption language is “at least ambiguous,” the Court should analyze
PASPA’s legislative history to determine if Congress unmistakably intended to upset the
existing balance of state and federal powers.
The “clear statement rule” is a canon of interpretation that requires Congress to make its
10
intent unmistakably clear when enacting statutes that would upset the existing balance between
the federal government and the states. See Gregory v. Ashcroft, 501 U.S. 452, 460-61 (1991)
(“[A]bsent an unmistakably clear expression to alter the usual constitutional balance between the
States and the Federal Government, [federal courts] will interpret a statute to preserve rather than
destroy the States’ substantial sovereign powers.”). The clear statement rule insures that the
Legislature has given ample deliberation, and demonstrated unmistakable intent before altering
“traditionally sensitive areas, such as legislation affecting the federal balance.” Id. at 461. As
such, “we must be absolutely certain that Congress intended such an exercise [of legislative
power],” id. at 464, and “it must be plain to anyone reading the Act that it covers” the issue in
question. Id. at 467; see also BFP, 511 U.S. at 544 (“[t]o displace traditional state regulation . . .,
the federal statutory purpose must be ‘clear and manifest.’”).
Further, as is the case here, when “confronted [with] a statute susceptible of two plausible
interpretations, one of which would have altered the existing balance of federal and state
powers[,] [this Court] concluded that, absent a clear indication of Congress’ intent to change the
balance, the proper course was to adopt a construction which maintains the existing balance.”
Salinas v. United States, 522 U.S. 52, 59 (1997); see also Bruesewitz v. Wyeth Inc., 561 F.3d
233, 240 (3d Cir. 2009) (“When faced with two equally plausible readings of statutory text, we
‘have a duty to accept the reading that disfavors preemption.’”) (internal quotations omitted);
Hayden v. Pataki, 449 F.3d 305, 325 (2d Cir. 2006) (“when a particular construction of a statute
would alter the federal balance, to the extent there is any doubt about whether Congress intended
that construction, courts should assume that Congress did not mean to alter the federal balance.”)
Here, there are clearly multiple interpretations of the term “scheme,” “to the extent,” and
“conducted.” Since both interpretations are at least reasonable, the ambiguity in the exemptions
11
should be resolved in favor of Tulania since its interpretation would not upset the balance of
federal and state power.
1. Since statutory language and legislative history does not make it “unmistakably clear”
that Congress intended to upset the existing balance of state and federal powers, this
Court should interpret the statute to maintain the current balance.
A court’s “primary concern is to give effect to Congress’s intent.” Disabled in Action of
Pa. v. Se. Pa. Transp. Auth., 539 F.3d 199, 210 (3d Cir. 2008). While a court should start with an
analysis of statutory text, the inquiry should not end if the statute’s language is ambiguous. See,
e.g., id. Legislative history is appropriately considered to establish whether the “unmistakably
clear” standard is satisfied. See Nixon v. Mo. Mun. League, 541 U.S. 125, 141 (2004) (“neither
statutory structure nor legislative history points unequivocally to [such] a commitment by
Congress”); Hayden, 449 F.3d at 325 (en banc) (“[W]e will apply the clear statement rule when a
statute admits of an interpretation that would alter the federal balance but there is reason to
believe, either from the text of the statute, the context of its enactment, or its legislative history,
that Congress may not have intended such an alteration of the federal balance.”). Here,
legislative history demonstrates Congress’s intent.
The Report of the Senate Judiciary Committee, chaired by Senator Biden, clearly states
that § 3704(a)(1) was designed to exempt sports wagering schemes permitted by respective State
law, and thus allows Tulania to expand its lottery to other sports. See S. REP. NO. 102-248, at 910, (“[§ 3704(a)(1) is not intended to prevent Oregon or Delaware [or Tulania] from expanding
their sports betting schemes into other sports as long as it was authorized by State law prior to
enactment of this Act . . ..). Further, upon debate in the Senate, there was consensus that PASPA
would not impede sports gambling authorized by pre-existing law. The prime Senate sponsor,
Senator DeConcini clearly stated “the grandfather provision only allows those States that have
sports gambling authorized by State law to continue to do what they are doing now or could do
12
under State law.” 138 CONG. REC. S12973 (1992) (emphasis added).
Such strong language in the legislative record, advocating noninterference with existing
state law, clearly fails Gregory’s clear statement test since there is no plain statement supporting
a disruption in the federal-state balance. Moreover, even accepting the Circuit Court’s opinion
that the legislative history is “undeniably muddled,” this would still mean that Congress has not
made it clear it wishes to disrupt the balance between federal and state powers. Thus, any
ambiguity should be construed in Tulania’s favor under the clear statement rule.
2. Tulania’s Sports Lottery is designed to raise revenue for the state and is thus a core
sovereign function designed to comply with its constitutional balanced-budget
requirement.
Furthermore, Tulania’s Sports Lottery is a core sovereign function, which merits Gregory
deference. As this Court has noted, the Gregory rule applies only to “essential” state interests
and functions. Pa. Dep’t of Corr. v. Yeskey, 524 U.S. 206, 209 (1998); see also BFP, 511 U.S. at
544. Moreover, this Court has noted we should conduct a case-by-case assessment of whether an
asserted state interest is sufficiently weighty to invoke the clear statement rule. Will v. Mich.
Dep’t of State Police, 491 U.S. 58, 65 (1989); see also, e.g., Gregory, 501 U.S. at 460-61.
Tulania’s state interest—raising revenues through a sports lottery in light of a dire
economic crisis—is “the most fundamental sort for a sovereign entity.” See Gregory, 501 U.S. at
460. While states may not impede valid federal actions, see M’Culloch v. Maryland, 17 U.S. 316
(1819), this Court has also described the States’ revenue-raising authority as “the most plenary of
sovereign powers.” Lawrence v. State Tax Comm’n of Miss., 286 U.S. 276, 279 (1932); see also
Allied Stores of Ohio v. Bowers, 358 U.S. 522, 526-27 (1959). As noted, this Court will interpret
a statute to preempt traditional state powers only if that result is Congress’s clear and manifest
purpose. See Dep’t of Revenue of Or. v. ACF Indus., Inc., 510 U.S. 332, 345 (1994). Interpreting
PASPA as preempting Tulania’s revenue scheme would “upset the usual constitutional balance
13
of federal and state powers,” and thus contradict the clear statement rule. Gregory, 460 U.S. at
460.
3. By crafting a tailored exemption for Tulania and other states, Congress has
demonstrated a desire to respect States’ rights and federalism principles.
Congress did not enact a flat prohibition on sports gambling through PASPA. Rather, it
specifically crafted provisions reserving specific States the right to raise revenue through
lotteries and wagering schemes. Through PASPA’s exemptions, Tulania, Delaware, Montana,
Nevada and Oregon are all authorized to continue sports gambling under schemes previously in
place. 28 U.S.C. § 3704(a)(1)-(3). Moreover, PASPA does not specifically target single-game
betting or betting on additional sports. Rather, § 3704(a)(2) permits casino sports gambling to
continue in Nevada, and § 3704(a)(3) even permits its expansion to New Jersey. Further,
throughout the entirety of § 3704, there is no actual restriction regarding which sports can be
wagered on or the types of wagers that can be made. Indeed, allowing completely new sports
betting schemes in New Jersey demonstrates the absence of any clear statutory purpose to
prohibit particular aspects of a sports lottery. It would make little sense to allow certain types of
games in one state but not in another, as this would be blatant discrimination between the states.
If Congress wanted to explicitly preempt certain types of bets or gambling schemes, it could
have written clear prohibitions into the legislation.
C. The proposed Sports Lottery will not harm the integrity of the respective sports leagues.
While Tulania seeks to reinstitute a Sports Lottery to help close a historic state budget
deficit, and save the State economy from financial ruin, the Leagues contend that the spread of
sports gambling threatens their integrity since betting might adversely affect the way the public
views professional and amateur sports. The Leagues also speculate that the proposed scheme
would significantly increase the likelihood that fans might not be bound by loyalty to a team or
14
player, but rather focus on profiting from games. However, the Leagues’ arguments are
hypocritical, contradicted by reality, and are at best merely speculative. As noted in National
Football League v. Governor of Delaware, “[t]he record shows that extensive gambling on NFL
games has existed for many years and that this fact of common public knowledge has not injured
plaintiffs or their reputations.” 435 F.Supp. 1372, 1378 (D. Del. 1977).
1. The mere existence of sports wagering will not injure a league’s interests since sports
gambling is already a multibillion dollar industry.
Estimates of the scope of illegal sports betting in the United States range up to $380
billion annually. The professional sports Leagues have long been aware of extensive wagering on
their games, have taken virtually no action to prevent it, have acquiesced in it, and have even
benefitted from it. Indeed, the Delaware District Court has previously found “that the existence
of gambling on NFL games, unaccompanied by any confusion with respect to sponsorship, has
not injured the NFL and there is no reason to believe it will do so in the future.” Id.
2. The Leagues’ existing entanglements with the gambling industry undermine their
reputational harm argument.
While the Circuit Court notes that courts should not “reject the balance that Congress has
struck in a statute,” United States v. Oakland Cannabis Buyers Coop., 532 U.S. 483, 497 (2001),
courts must not ignore common sense. As noted in the District Court’s decision, the Leagues’
existing entanglements with the gambling industry undermine their reputational harm argument.
These entanglements include cross-ownership of sports teams and casinos, league sanctioned
dissemination of gambling-related information, sponsorships, and other ties (DCR.34-35). If the
Leagues truly wanted to dissociate themselves from the industry, they would not have entered
into the aforementioned partnerships and ventures. To argue that sports wagering harms the
integrity of their respective sports is definitively undercut by these existing relationships.
15
II. TULANIA’S PROPOSED SPORTS LOTTERY DOES NOT VIOLATE THE TULANIA
CONSTITUTION.
A. The proper standard to determine whether the chance element of a lottery is met is the
American dominant factor rule.
A lottery includes three elements: consideration, prize, and chance. NFL, 435 F.Supp. at
1383. Under Tulania’s Sports Lottery, the only element in dispute is chance. (DCR.35). In the
United States, two methods have developed to decide the issue—the American dominant factor
rule and the English rule. Id. The American rule permits an ingredient of skill so long as chance
is the dominant or controlling factor. See, e.g. id. at 1384. Under the English rule, however, a
scheme is only a lottery if it consists of “pure chance.” See, e.g., id. at 1383-4. The Leagues
argue that Tulania’s proposed scheme is not a lottery because it incorporates an element of skill,
and thus does not fall within the exception permitting “lotteries under State control for the
purpose of raising funds” in Tulania’s Constitution. (CCR.13)
1. The American dominant factor rule is the proper standard to apply because the
majority of United States jurisdictions have accepted it as the appropriate rule.
An overwhelming number of jurisdictions have adopted the dominant factor rule. See,
e.g., Johnson v. Phinney, 218 F.2d 303, 306 (5th Cir. 1955) (If chance “is present and
predominates . . . the fact that players may exercise varying degrees of skill is immaterial. . .”);
United States v. Marder, 48 F.3d 564, 569 (1st Cir 1995) (“[C]hance must be present in such a
manner as to thwart the exercise of skill or judgment. . ..”) (citation omitted); NFL, 435 F.Supp.
at 1384 (“[I]t is sufficient if chance is the dominant or controlling factor.”); Bell Gardens Bicycle
Club v. Dept. of Justice, 42 Cal. Reptr. 2d 730, 733 (Cal. Dist. Ct. App. 1995) (“[I]t is the
character of the game as revealed by its rules that the courts look to in determining whether the
elements of skill or chance predominate. . ..”) (citation omitted); Commonwealth v. Lake, 57
N.E.2d 923, 925 (Mass. 1944) (“[B]y weight of authority a game is now considered a lottery if
16
the element of chance predominates. . ..”) (citation omitted); State ex Inf. McKittrick v. GlobeDemocrat Pub. Co., 110 S.W.2d 705, 717 (Mo. 1937) (“[T]he rule that chance must be the
dominant factor is to be taken in a qualitative or causative sense rather than in a quantitative
sense.”).
Thus, the “significant weight of authority has declared that the American rule should
apply,” (CCR.14) and has deemed that the “sounder approach” is the dominant factor rule.
Morrow v. State, 511 P.2d 127, 129 (Alaska, 1973). This fact should lead this Court to overrule
the decision of the Fourteenth Circuit and hold that the American dominant factor rule is the
appropriate standard.
2. The Tulania Legislature intended to carve out a specific exception to the
Constitutional ban on gambling and specifically contemplated sports-based lottery
games.
The Tulania State Legislature demonstrated clear intent to permit State-run sports-based
lottery games by carving out a specific exception to the State Constitution’s ban on gambling.
Since Tulania’s Constitution provides for “Lotteries under State control” as an exception to the
otherwise broad prohibition of lotteries, this “shows the State’s intention to broadly construe
lotteries to include games beyond large-scale ‘ticket’ lotteries.” Bell Gardens, 36 Cal.Rptr.2d at
745 n.8 (citation omitted). Further, had the Legislature wished to exempt schemes based on the
outcome of sporting events, “it would have been very simple to say just that.” Id. In fact, the
Legislature limited the grant in another way by requiring that the State-run lottery be for “the
purpose of raising funds” (CCR.13).
Further, Tulania adopted the Constitutional Amendment in 1973, and, only one year later,
passed legislation authorizing lottery games that “affiliate the determination of the winners of a
game with any . . . sporting event” (DCR.19). One must assume that the composition of the
17
Tulania Legislature did not substantially change within one year, and the Legislature had
contemplated sports lotteries when adopting the 1973 Amendment.
3. The Tulania Legislature did not violate Tulania’s policy against gambling when it
carved out an exception permitting State-run lotteries.
The Tulania Legislature intentionally carved out an exception based on valid State power
and policy. The Bill passed by the Legislature advocates that the Sports Lottery protect
employment in and provide revenue for Tulania (DCR.24). This Court has described States’
revenue-raising authority as “the most plenary of sovereign powers.” Lawrence, 286 U.S. at 279.
Tulania’s Sports Lottery was intended to bring necessary financial aid to the State, and Tulania
has the power to carve out an exception to its other policies through the use of its plenary
sovereign power.
Moreover, though gambling may be against the policy of Tulania and other jurisdictions,
legislatures often carve out exceptions to general policy. See, e.g. Boardwalk Regency Corp. v.
Travelers Express Co., 745 F.Supp. 1266, 1269 (E.D. Mich. 1990). Many states that have
enunciated a public policy against gambling also permit State-run sports-based lotteries. See,
e.g., Id. at 1271 (“[I]t is the express public policy of Michigan to promote ‘legal’ gambling.”);
Aprile v. The State of Delaware, 143 A.2d 739, 745 (Del. 1958) (gambling is against the public
policy of Delaware, but Delaware adopted a sports lottery similar to Tulania’s); Caribe Hilton
Hotel v. Toland, 307 A.2d 85, 88 (N.J. 1973) (New Jersey’s “policy has become one of carefully
regulating certain permitted forms of gambling while prohibiting all others entirely.”). Thus,
while gambling may be against the public policy of Tulania, the Legislature can still carve out an
exception.
18
4. The English Rule is Too Narrow and Restrictive.
The English rule, which requires that a lottery be “pure chance,” Oneida County Fair Bd.
v. Smylie, 386 P.2d 374, 384 (Idaho 1963), is too narrow and restrictive because it looks to the
skill of individual bettors instead of the character of the game. “When the contest is
unrestricted[,] [w]hat is a matter of chance for one man may not be for another.” McKittrick, 110
S.W.2d at 718. Requiring that the exercise of any skill or judgment be completely nonexistent
unduly burdens a state to determine the skill of all potential bettors. Even a game that is “pure
chance” may have individuals with the skill to beat it. For example, though some players may be
able to exercise a degree of skill when playing cards, the act of dealing cards includes so much
chance that the game itself cannot appreciably be altered by any exercise of skill. See In re
Advisory Opinion to the Governor, 856 A.2d 320, 328 (R.I. 2004). Likewise, in a sports lottery,
the skill of the player may arguably “increase the player’s odds of winning, but ultimately the
player’s skill cannot determine the outcome, regardless of the degree of skill involved.” Id.
Further, the “pure chance [doctrine] would legalize many . . . schemes, where only a
small element of skill would remove such games from classification as lotteries. This could lead
to a large-scale evasion” of many state laws which prohibit lotteries but permit other forms of
gambling. Morrow, 511 P.2d at 129. By permitting a court to determine whether chance plays
the dominant role, the dominant factor doctrine grants a court more discretion to take into
account other relevant case-by-case factors. In contrast, the English rule unduly restricts the
exercise of a courts judgment by requiring a court to hold any game permitting an iota of skill as
not being a lottery. Further, such a restrictive interpretation potentially harms the valid
application of many laws outlawing lotteries.
19
B. Under the American dominant factor rule, Tulania’s proposed Sports Lottery is in
accordance with the Tulania Constitution.
Under the American dominant factor rule, an element of calculation is acceptable in a
lottery as long as the element of chance determines the outcome. People ex rel. Ellison v. Lavin,
71 N.E. 753, 754 (N.Y. 1904). Courts look to the character of the game, not the individual
players, to determine whether chance is the dominating factor. Id. Further, the measure is
qualitative—“chance must be an integral part which influences the result. The measure is not the
quantitative proportion of skill and chance in viewing the scheme as a whole.” Seattle Times Co.
v. Tielsch, 495 P.2d 1366, 1369 (Wash. 1972) (en banc). Under the American test, chance is
clearly the qualitative factor that dominates the outcome in a sports lottery.
1. Sports gambling is subject to unpredictable and uncontrollable variables so that the
element of chance is dominant and thwarts the exercise of skill.
In Commonwealth v. Laniewski the court noted that attempts to forecast the outcome of a
sporting event are “fraught with chance,” because even though “past records, statistics and other
data might be consulted . . . [n]o one knows what might happen once the game has begun.” 98
A.2d 215, 217 (Pa. Super. 1953). In sports betting, a result depends “upon so many uncertain and
unascertainable causes that the estimate of the most learned would be after all nothing more than
a random and undecisive judgment.” McKittrick, 110 S.W.2d at 713 (citation omitted). Thus,
even the most well versed bettor—who knows all of the odds, players, and statistics—cannot
guarantee an outcome. While that bettor may be able to guess the result with more certainty than
someone guessing on mere whim, there are too many unknowable factors to guarantee accuracy.
Further, in sports betting, the bettor is not an actual participant in the event upon which
he or she bets. No bettor can ever truly know what occurs on a field or court between the players
in a sporting event—each of whom has a number of emotional, mental, and physical factors
playing upon the exercise of his or her own judgment. A bettor can take into account certain
20
knowable factors, but can never truly attain the foresight required to bet with any
comprehensible amount of skill.
In addition, though the Fourteenth Circuit extends reasoning from cases holding that
horse racing is not a lottery to determine that gambling on football (and, presumably, other
sports) is not a lottery, (CCR.16), betting on horse racing is not analogous to betting on other
sports. In fact, many jurisdictions have held that betting o other sports constitutes a lottery. See,
e.g., NFL, 435 F.Supp. at 1386. Betting on horseracing is substantially more skill-intensive than
betting on other sports. Unlike in football, baseball, basketball, etc., there are more than two
participants in horseracing, so bettors have a lesser chance of winning. Additionally, the
mechanics of setting the odds operates differently in horseracing. While the point spread in other
sports equalizes the odds between the two teams (See infra Part II.B.2) in betting on horseracing
the odds merely speak to the amount the bettor would win, not the actual chances of winning.
Oneida, 386 P.2d at 376. Thus, where betting on horse races requires skill and judgment, betting
on other sports does not.
2. The use of a point spread or betting line equalizes the odds and injects a further factor
of chance.
By virtue of a point spread, bets are pushed closer towards a fifty-fifty position,
maximizing the role that chance plays in the bet. A sports lottery is issued in a way that equalizes
the teams by prescribing a point spread and “injects a further factor of chance” into the game.
NFL, 435 F.Supp at 1385. Point spreads are designed to remove any obvious or quantitative
competitive advantage that one team may have over another. This results in a more equal playing
field for the bettors because linemakers force bets to be made under a false circumstance where
teams are treated as more equal than they actually are. Handicaps and point spreads, by
definition, take into account a certain amount of knowledge that may otherwise be considered the
21
“skill” of certain bettors—making chance more dominant where a point spread or handicap
applies and neutralizing the effect of skill. Moreover, linemakers adjust a line to induce more
even betting if they notice that bets are too heavy on one side, thus optimizing the element of
chance.
Furthermore, though the Fourteenth Circuit cites the demise of Delaware’s betting
scheme as evidence that chance is not dominant, Delaware’s linemakers merely issued a bad line.
Vigilant bettors were able to note and take advantage of the inefficiency. However, this merely
evidences the power of a point spread in equalizing the odds and the impact that chance has in
the outcome of a bet. In fact, a year after the demise of the Delaware scheme, the NFL court held
that point spreads were “designed to equalize the odds” and inject further chance into the
scheme. Id. The court also held that parlay games were constitutional under an almost identical
Amendment, and that the dominant factor test applied.
3. As with parlay betting, chance is the dominant factor when betting on single games.
While it is true that it may be easier to guess the outcome of a single game than it would
be to guess many, and that the “hazard is multiplied directly by the number of predictions made,”
chance is still the dominant factor used in betting on any single game. Laniewski, 98 A.2d at 217.
In fact, “[a]ny attempt to forecast the result of a single athletic contest. . .is fraught with chance.”
Id. Though parlay betting might be fraught with more chance, there are still a multitude of
factors at play in single game betting. These variables make it so that no amount of skill can
determine the outcome of a bet. In reality, betting on a single game is fraught with chance and
parlay bets are only that much more so.
22
C. Even under the English rule, Tulania’s proposed Sports Lottery is in accordance with the
Tulania Constitution.
Under the English test, there can only be “pure chance” and a scheme cannot be
considered a lottery if any element of merit or skill is present. NFL, 435 F.Supp. at 1383-84.
Though one might assume that some skill is involved in sports gambling because many bettors
research the teams, attempts to exercise skill have no actual impact on the result. “[T]here is no
guarantee that a certain [team] is going to win, and neither is there any guarantee that a bettor
will always pick a winner.” Oneida, 386 P.2d at 393 (Taylor, J. dissenting) (citation omitted).
Though Oneida dealt with horse racing and the mechanics differ (see supra Part II.B.1), where a
point spread applies “every bettor takes a ‘chance’ on [whether] he will win, even though his
[team] finishes in the exact position that he bet [it] would.” Id. Further, while sporting games
themselves may be regarded as games of skill because training and experience impact the result,
the players are not themselves placing bets. Id. at 394. Instead, “members of the public at large
engage in placing bets upon the result . . . Their choice. . ..is at most a guess. Any distribution
they may receive is the result of chance.” Id. Thus, where bettors are betting on the outcome of a
sporting event of which they are mere spectators, their bets are not in fact the product of skill.
CONCLUSION
For the foregoing reasons, this Court should vacate the decision of the Fourteenth Circuit
and remand for further proceedings applying the appropriate standards.
DATED: January 10, 2011
RESPECTFULLY SUBMITTED
By Attorneys for Petitioner/Appellant
Counsel for Petitioners
23
APPENDIX A
28 U.S.C. § 3701. Definitions.
For purposes of this chapter-(1) the term “amateur sports organization” means—
(A) a person or governmental entity that sponsors, organizes, schedules, or conducts a
competitive game in which one or more amateur athletes participate, or
(B) a league or association of persons or governmental entities described in subparagraph
(A),
(2) the term “governmental entity” means a State, a political subdivision of a State, or an
entity or organization, including an entity or organization described in section 4(5) of the
Indian Gaming Regulatory Act (25 U.S.C. 2703(5)), that has governmental authority within
the territorial boundaries of the United States, including on lands described in section 4(4) of
such Act (25 U.S.C. 2703(4)),
(3) the term “professional sports organization” means-(A) a person or governmental entity that sponsors, organizes, schedules, or conducts a
competitive game in which one or more professional athletes participate, or
(B) a league or association of persons or governmental entities described in subparagraph
(A),
(4) the term “person” has the meaning given such term in section 1 of title 1, and
(5) the term “State” means any of the several States, the District of Columbia, the
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Palau,
or any territory or possession of the United States.
_____________________________________________________________________________
28 U.S.C. § 3702. Unlawful Sports Gambling
It shall be unlawful for-(1) a governmental entity to sponsor, operate, advertise, promote, license, or authorize by law
or compact, or
(2) a person to sponsor, operate, advertise, or promote, pursuant to the law or compact of a
governmental entity,
a lottery, sweepstakes, or other betting, gambling, or wagering scheme based, directly or
indirectly (through the use of geographical references or otherwise), on one or more competitive
A-1
games in which amateur or professional athletes participate, or are intended to participate, or on
one or more performances of such athletes in such games.
_____________________________________________________________________________
28 U.S.C. §3704. Applicability.
(a) Section 3702 shall not apply to-(1) a lottery, sweepstakes, or other betting, gambling, or wagering scheme in operation in a
State or other governmental entity, to the extent that the scheme was conducted by that State
or other governmental entity at any time during the period beginning January 1, 1976, and
ending August 31, 1990;
(2) a lottery, sweepstakes, or other betting, gambling, or wagering scheme in operation in a
State or other governmental entity where both-(A) such scheme was authorized by a statute as in effect on October 2, 1991; and
(B) a scheme described in section 3702 (other than one based on parimutuel animal
racing or jai-alai games) actually was conducted in that State or other governmental
entity at any time during the period beginning September 1, 1989, and ending October 2,
1991, pursuant to the law of that State or other governmental entity;
(3) a betting, gambling, or wagering scheme, other than a lottery described in paragraph (1),
conducted exclusively in casinos located in a municipality, but only to the extent that-(A) such scheme or a similar scheme was authorized, not later than one year after the
effective date of this chapter, to be operated in that municipality; and
(B) any commercial casino gaming scheme was in operation in such municipality
throughout the 10-year period ending on such effective date pursuant to a comprehensive
system of State regulation authorized by that State's constitution and applicable solely to
such municipality; or
(4) parimutuel animal racing or jai-alai games.
(b) Except as provided in subsection (a), section 3702 shall apply on lands described in section
4(4) of the Indian Gaming Regulatory Act (25 U.S.C. 2703(4)).
_____________________________________________________________________________
Tulania State Legislature Bill (CCR.24)
The Lottery Director will use his or her authority to reestablish a sports lottery, which will
enhance the Tulania Lottery, protect Tulania employment, and provide additional revenues for
the State. The sports lottery excludes collegiate sporting events that involve a Tulania college or
university. Persons under the age of 21 will not be allowed to participate in the sports lottery.
A-2
In reestablishing the sports lottery, the bill will take advantage of an exemption granted to the
State of Tulania under federal law, namely the Professional and Amateur Sports Protection Act,
which allows the states of Tulania, Delaware, Nevada, Oregon, and Montana to engage in sports
betting.
This bill authorizes the conduct of a sports lottery only at the three racing casinos presently
operating. Proceeds from the conduct of a sports lottery at the racing casinos would be divided
equally between the racing casinos and the State.
A-3