Gaming Attorneys Shocked by Complete Delaware Turnaround

By Maureen Milford, The News Journal

Anthony Cabot, a Las Vegas gaming lawyer, was having lunch Monday with three other gaming lawyers when the conversation turned to the appellate court decision involving Delaware's planned sports lottery.

"It was unanimous. We were all surprised by the decision," Cabot said.

In a terse six-line decision, the U.S. Court of Appeals for the Third Circuit ruled that Delaware's sports lottery violates federal law.

Several lawyers said they had thought the sports leagues, which have been fighting Delaware in federal court, would have an uphill battle to stop the state's sports lottery from starting on Sept. 1 pending a December trial on the issue in U.S. District Court in Wilmington.

Instead, the appellate court appears to have sidelined Delaware's hopes for single-game betting with a decision that Las Vegas gaming lawyer Greg Gemignani described as a "pretty harsh outcome."

"After the district court ruling, Delaware was on track for sports betting. After the appeals court it's not even clear [Delaware] can do anything," he said. "It's a complete turnaround."

Cabot agreed.

"The decision seemed fairly absolutist in the sense that it leaves little doubt as to what their intent was. It's over," he said.

The ruling was unusual because appellate courts tend to give deference to lower courts, gaming lawyers said. Even Kenneth J. Nachbar, who represented the leagues, said it's an "uphill battle" any time there's an attempt to reverse a lower court.

What's more, U.S. District Court Chief Judge Gregory Sleet had indicated in a ruling earlier this month that the court would entertain a broad interpretation of the exemption in the federal Professional and Amateur Sports Protection Act, which appeared to allow Delaware to have sports betting, lawyers said.

Gaming lawyers nationally have been following the case because Delaware's move indicated the possibility of the expansion of sports betting, Cabot said.

Monday's ruling is the first interpretation of a court of how broad or narrow the exemptions to the federal sports protection law are, lawyers said.

"It's absolutely a big deal," Cabot said.

Cabot said appellate courts will "on occasion" make a ruling similar to what happened Monday.

"It's when there are no disputed material facts and the application of the law is clear and requires no additional evidentiary hearing," Cabot said.

Still, he said he was surprised the court found no ambiguity in the statute.

Lawyers said they are eager to read the opinion once it comes out.

"It will be interesting to see what they say and what the broader implications are for the state of Delaware," Cabot said.