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NOT WITH OUR GAMES YOU DON'T
Lawmakers may not know much, but they're sure of one thing: People would rather gamble than pay taxes. In the past few years, as voters balked at new levies, 33 states and the District of Columbia bet that lotteries would spin off millions of dollars in new revenues. They bet right: The games netted states $7.8 billion last year.
Now, with dozens of states facing budget crises, legislatures may add a new wrinkle to legalized wagering: rewards for picking the winners of professional sports contests. Oregon has had such a lottery for two years, with the proceeds earmarked for the state university system's athletic programs, and other states may soon follow suit. That could spark a bitter legal brawl with the major professional sports leagues, which back federal legislation that would bar sports lotteries. A Senate Judiciary subcommittee is scheduled to vote on such a bill on July 17.
SHOELESS' SHADOW. The states do need a financial home run. Thirty of them, plus the District and Puerto Rico, ran deficits in the last fiscal year, and many took drastic steps when their new fiscal year started July 1. Several governors ordered cuts in payrolls, and Connecticut and Maine temporarily halted state services.
To help plug their budget gaps, legislatures in Illinois, New York, Pennsylvania, and other states are mulling bills that would authorize state-sponsored sports betting (table). And in California, signatures are being gathered for a ballot initiative that would permit such a lottery there. Many more states are awaiting the outcome. "If we can get a game started in a major state, with revenues meeting our projections, more people will take a harder look," says William S. Bergman, executive director of the North American Association of State & Provincial Lotteries.
That prospect terrifies the professional sports leagues. Although newpapers across the country print point spreads and betting lines, league executives worry that legalized gambling would just give teenagers further encouragement to gamble. "The problem is so bad already, we don't need to make it any worse," says Valerie C. Lorenz, director of the National Center for Pathological Gambling.
The pros also worry about resurrecting memories of the Black Sox scandal, in which several Chicago White Sox players took payoffs from gamblers to throw the 1919 World Series. "Gambling threatens the integrity of, and public confidence in, all sports," declares National Basketball Assn. Commissioner David J. Stern. Big-time sports can hardly afford another embarrassment in the wake of repeated drug scandals and the Pete Rose gambling affair.
Illegal sports wagering, say league officials, is already too pervasive. Government approval, they contend, would only make matters worse. "The game's integrity would be open to question play by play, day after day," says baseball Commissioner Fay Vincent.
Those fears haven't deterred legislators, even though the take from sports lotteries might not amount to much. Oregon's football-based Sports Action game netted a paltry $1.6 million last year. The minimum wager is $2 on at least three games, and the prize is $10 for picking three winners and $20 for choosing four. The payoff for picking more than four winners--and no losers--depends on the wagering pool and the number of winning bets.
TIED HANDS. Some experts believe that sports lotteries could be more profitable in larger states with more pro franchises to boost fan interest. Others contend that sports lotteries would simply divert money from existing lottery games, rather than bring in new money. But for some state lawmakers, the size of the lottery handle isn't the only issue. While the recession is largely responsible for the states' fiscal woes, state officials are peeved that they've had to pick up an ever-growing portion of the tab for health and other services. "The federal government has shifted billions of dollars in new responsibility to us, and at the same time they want to restrict our sources of revenue," fumes Kansas State Representative Wanda L. Fuller (R-Wichita).
Even if the states win the political battle in Washington, they're not assured of victory. In 1989, the NBA sued Oregon, charging that the lottery violated the league's trademark rights to its games. The state, whose only pro sports franchise is a basketball team, agreed to remove NBA results from its lottery, and the league dropped the suit. The Oregon game now is limited to football. If football lotteries spread to other states, though, the National Football League is prepared to blitz. "We're not ruling out any legal avenue," says an NFL spokesman.
With the stakes so high, both the states and the leagues are wearing their game faces. Congress and the courts have some tough calls ahead.
TO BET OR NOT TO BET
STATES MULL SPORTS WAGERING
ILLINOIS The state senate is considering a bill permitting a sports lottery based solely on the outcome of Chicago sporting events
NEW YORK The state assembly is considering two bills authorizing pari-mutuel betting on the scores of professional contests
PENNSYLVANIA A bill to establish a sports betting pool is working its way through the state legislature
DATA: NORTH AMERICAN ASSOCIATION OF STATE & PROVINCIAL LOTTERIESPeter Hong in Washington