Attorney General of New York — Opinion

NY CONST, Art I, § 9; PENAL LAW, § 225.00; TAX LAW, § 1600, et seq.; L 1877, Ch 178; L 1881, Ch 676; L 1887, Ch 479; L 1895, Ch 572, L 1910, Ch 488; L 1965, Ch 1030; L 1967, Ch 278; L 1971, Ch 1014; 21 NYCRR Part 2800.

A proposal authorizing the Division of the Lottery to conduct a game in which bets are placed on the outcome of pro sports events would require an amendment to the State Constitution in order to be implemented. The Constitution, both through its specific bans on bookmaking and pool-selling and through its general ban on all forms of gambling not expressly authorized, forbids the kinds of gambling involved in the proposed sports betting game.

There is before the Legislature, as part of the Executive Budget for 1984-85, a request for an appropriation to the Division of the Lottery (“Division”) for the initiation of a sports betting program. In light of the serious questions raised regarding the constitutionality of the program the Attorney General is issuing this opinion in order to help inform the decisions of the Legislative and Executive branches so that their actions may be consistent with the authority ceded to the government by the people in the New York Constitution.[1]

The policy of New York in regard to gambling is expressed in Article I, section 9, of the Constitution. It reads in pertinent part:

* * * [N]o lottery or the sale of lottery tickets pool-selling, bookmaking, or any other kind of gambling, except lotteries operated by the state and the sale of lottery tickets in connection therewith as may be authorized and prescribed by the legislature, * * * shall hereafter be authorized or allowed within this state. (NY Const, Art I, § 9).

It is the opinion of the Attorney General that the “New York Pro-Sports Lottery Card” announced in the 1984-85 Annual Budget Message (p. m 16) would violate this provision and would require a constitutional amendment in order to be implemented.

The conclusion stated above is based upon a close examination of the anti-gambling policy of New York, the history of the constitutional expansion and the contraction of that policy, the statutes enacted to realize the policy, and judicial pronouncements in cases applying it. We find that the New York Constitution, courts and statutes have historically distinguished between lotteries and wagers on the outcome of sporting events. We find that the Constitution, both through its specific bans on bookmaking and pool-selling and through its general ban on all forms of gambling not expressly authorized, forbids the kind of gambling involved in the proposed sports betting game. We find that, in carving out an exception to the anti-gambling provision of the Constitution so as to empower the Legislature to authorize and prescribe a lottery to be operated by the State, there was no intent on the part of the framers to sanction the kind of gambling involved in the proposed game. We find that both the statutes enacted to forbid gambling and those enacted to authorize and prescribe a certain form of State-run lottery operate to preclude the kind of gambling involved in the proposed game. Finally, we find that the case law of New York permits no other interpretation than that lotteries are forms of gambling essentially based upon random chance and that New York jurisprudence has never deemed betting on the outcome of sporting events to be a lottery.

The Proposed Sports Card Betting Game

Though final details have not been completed, the basic elements of the proposed game have been defined by the Division of the Lottery, the agency which is to administer the game.[2]

The plan is to introduce the game during the 1984 football season. A person wishing to play would be able to buy at a Lottery Division outlet a card listing the professional football games for the upcoming weekend. The card is to cost one dollar and entitles the bettor to place one bet; additional bets up to a total of five can be placed for the price of one dollar each. The betting will be of a parlay nature; the simplest bet available will be on the outcome of 4 or 5 games, all of which must conform with the bettor’s prediction in order for the bet to win. The bettor may attempt to guess the result of up to 14 games in one bet. The more games guessed on in a bet, the higher the pay out to the bettor.

Each football game will be assigned a point spread. For instance, in a game between the Giants and the Raiders, the Giants might be regarded the weaker team. The point spread might be 15 points. This means that in order for a bet on the Raiders to be a winning bet, the Raiders must beat the Giants by at least 15 points. If the score of the football game turns out to be Raiders 35, Giants 21, the bettor who bet on the Raiders would lose the bet because the addition of the 15 points to the Giant score would give the Giants a higher total. The Raiders, having won the football game by only 14 points, would be said not to have “covered the spread.” Whether the Lottery Division will establish its own point spreads or follow the betting line established by the Nevada bookmakers is yet undecided.

Also undecided is whether pay-offs to winning bettors will be calculated on a fixed-odds basis or on a pari-mutuel basis. On a fixed-odds basis, the bettor knows in advance what his return will be on a winning bet, e.g., picking 4 out of 4 games will pay off at 10-1 and a $1 bet gets a $10 pay-off. On a pari-mutuel basis, the pay-off is determined by the amount of money bet, i.e., the total size of the pool from which winnings will be paid. If the betting pool is large and winners few, individual pay-offs will be high. If the betting pool is small and winners many, individual pay-offs will be low. This is the system employed at horse race tracks. Each system has its advantages and disadvantages and the decision which employ will be made by the Division after assessing fiscal, administrative and marketing factors.

The Division plans to devote 35% of its weekly handle to aid education, 15% to defray administrative expenses and 50% to pay off winning bettors.

The History of Gambling and the New York State Constitution

a. The Early Prohibitions

Dating from colonial times, lotteries have been a recurring method of raising public revenue. Even while passing laws against the holding of private lotteries, New York’s colonial and state legislatures authorized public lotteries for such important public purposes as the fortification of the City of New York (1746), the “advancement of learning” at Kings (later Columbia) College (1756), the payment of New York City’s debt (1790), construction of a statehouse in Albany to accommodate the legislature (1807) and numerous other projects.

Eventually, corruption, scandal and the inherent contradiction between the condemnation of private lotteries and the proliferation of public ones brought the practice into disfavor, and the Constitution was amended in 1821 to provide that no “lottery shall hereafter be authorized or any sale of lottery tickets allowed within this state.” (Lincoln Constitutional History of New York, Vol 3, p 46) In response to the new constitutional doctrine, appropriate statutes (e.g., L 1881, ch 676) were passed banning all new lotteries and providing for closing up those which had been authorized.

In a separate but related development, the Legislature enacted Chapter 178 of the Laws of 1877 in relation to “bets, wagers and pools.”[3] The statute provided that a person shall be guilty of a misdemeanor if he or she “shall record or register bets or wagers, or sell pools upon the results of any trial or contest of skill, speed or power of endurance, of man or beast, or upon the result of any political nomination, appointment or election * * *” Ten years later, the Legislature passed the “Ives pool law” to selectively suspend this ban and hence allow such gambling to occur at race tracks between May 15 and October 15, within which period racing associations could hold 30-day meetings and conduct races at their tracks. (L 1887, ch 479.)

The Ives pool law was attacked as unconstitutional on the theory that it allowed the holding of lotteries, which were constitutionally forbidden. In Reilly v Gray (77 Hun 402, 1894), the court upheld the constitutionality of the statute on the basis of a finding that this type of wagering on the outcome of human or animal contests was not a lottery. The court tracked the historical development of anti-lottery statutes and those aimed at betting on horse races or other contingent events and noted that the two practices were treated distinctly. It discussed certain conceptual distinctions between lotteries and pool-selling. For example, in a lottery, the managers of the scheme cast or ascertain somehow the winning lot while in a pool-selling scheme the managers simply facilitate the betting, hold the stakes, and distribute the winnings while having nothing to do with the contingent event which determines the winner(s).

Speaking for the court, Judge Merwin wrote:

It seems to me very clear that it was not the intention of the framers of the Constitution * * * in the use of the word “lottery” to include in it the subject of betting as then prohibited by statute. They were distinct subjects upon the statute book and in the public mind, and if the design had been to cover both they would have been named * * * It may be difficult to precisely define the difference between the two * * * But be the distinction what it may, it is very clear from the state of the statutory law in 1846 as well as 1821 that betting upon a horse race was not then understood to be a lottery. That being so, we must assume that it was not meant to be included in the term “lottery” as used in the Constitution. The same rule must apply to the pool-selling complained of, as it must be classed with betting and is a development, a combination in the same line. It follows, therefore, that the constitutional prohibition against lotteries does not apply. (Id., at 410.) (Emphasis supplied.)

The Reilly decision came down in April 1894. In May, a Constitutional Convention met in Albany. In June, there was reported to the floor of the convention the following amendment of the anti-lottery provision: “Nor shall any lottery or the sale of lottery tickets, pool-selling, bookmaking or any other kind of gambling hereafter be authorized or allowed within this state.” Following debate roundly condemning bookmaking and pool selling and emphasizing the need to go beyond the prohibiting of mere lotteries, the delegates adopted the new provisions by a vote of 109 to 4 and the language was duly added to the Constitution. (Lincoln op cit at p 51)

In the next legislative session, the Penal Code was amended to make pool-selling and bookmaking a felony (L 1895, ch 572 § 1). The statute retained the specific prohibition covering any contest of man or beast, but extended it to encompass any “unknown or contingent event whatsoever” (L 1895, ch 572, § 1).

From the history it is indisputable that since at least 1877 when the Penal Code specifically defined as criminal wagering on the outcome of “contests of speed, skill or power of endurance of man or beast”, New York law has viewed lotteries and betting on sports events as two distinct forms of gambling.[4] This distinct statutory ban on sports wagering was elevated to the constitutional level in 1894 and has remained by explicit language in the Constitution until today.

The sweeping ban on gambling has been amended four times since 1894: in 1939 to allow pari-mutuel betting on horse races; in 1957 to allow religious, charitable and certain non-profit groups to conduct bingo or lotto; in 1966 to allow a state-run lottery; and in 1975 to expand the “bingo” exception to allow the non-profit groups to run other games of chance. Each of these amendments has been narrow in scope and none has been viewed as a repeal of the ban on “pool-selling, bookmaking, or any other kind of gambling” which the Constitution by specific reference proscribes.

b. The State Lottery Amendment

In 1966, the people passed a referendum amending Article I, section 9, of the Constitution so as to except from the anti-gambling ban “lotteries operated by the state and the sale of lottery tickets in connection therewith as may be authorized and prescribed by the legislature.”

The legislative history of this amendment is incomplete. The Assembly debate on the first passage of the amendment was not transcribed and that body apparently voted second passage without debate. However, the Senate debates are available and highly illuminating.

The common understanding appears to have been that New York would be empowered to run a lottery essentially modeled in concept on the New Hampshire sweepstakes, the first state lottery of the modern era.[5]
(The New Hampshire game was run as a traditional sweepstakes type of lottery in which only random chance was the operative factor. In fact, the New Hampshire lottery statute specifies that the state games shall be “pure lotteries not associated in any way with sporting events” [NHRSA § 3284 (21) (H) (a)].) Nowhere in the debates is there any hint that the Legislature thought they were emasculating or eliminating the constitutional bar against pool-selling or bookmaking on the outcome of sporting events. There is nothing in the Senate debates from which to infer that anything other than a traditional lottery involving the sale of tickets and the selection of winning tickets through random choice was contemplated.[6]

The Senate debates also indicate that the Legislature recognized that its discretion to determine the final form of the lottery was limited to details relating to the implementation of the lottery — and did not empower it to set up entirely new forms of gambling under the guise of lottery. As succinctly stated by Senator Bloom, a sponsor, “Now, as to a plan — and we have spoken about a plan — there is not much choice as to the type of plan that will be operated here — whether it is twice a year or four times a year or whether the amount of prizes would be 20% or 30%, would be about the spread of the possible plan and the implementation would only be mechanical so who is being kidded.” (Tr 351.)[7]

The amendment was approved by referendum in November 1966 and became the law of New York. In order to establish the lottery, the Legislature had to “authorize and prescribe”[8] the game by statute. The Legislature chosen in the same election in which the amendment was approved enacted the enabling statute; the relevant provisions are now found at § 160 et seq of the Tax Law. The statute is permeated with the notion of the sale of tickets and the drawing or selection of a ticket to determine a winner. For example, the head of the lottery agency was empowered in the statute, inter alia, “to establish the time and place of drawings, * * * to provide for the manner in which drawings shall be conducted * * * to fix the amounts of each prize in each separate drawing” L 1967, ch 278, § 1)

The statute, as a contemporaneous expression of the mind of the Legislature, further strengthens the conclusion that the state lottery exception to the constitutional ban on gambling authorized only traditional lotteries based on random chance as the determinant of a winner.

For futher indication of the implicit understanding of the traditional nature of the state lottery, the administrative rules and regulations under which the lottery has been run are useful. The State Racing and Wagering Board and later, the Division of the Lottery, have published such rules (cf NYCRR Part 5000 and NYCRR Part 2800, respectively). In total, rules for over 50 different games were promulgated, and these games all share the attributes of traditional lotteries in that the determination of the winning ticket is through an event of pure, random chance. Moreover, when the current Lottery Division was created with the passage of a new lottery statute designed to give greater flexibility and discretion to the agency running the lottery (L 1976, ch 92), the Division issued NYCRR § 2804.1 which states that “drawings will be held for each lottery game using such methods and equipment approved by the director so as to insure random equal chance among all participants and ticket buyers”. (Emphasis supplied.) Even with its enhanced discretion to formulate and run lotteries, the Division clearly recognized that only games based on random chance could be run.

A series of events beginning in 1971 is also revealing as an expression of the Legislature’s understanding of the highly circumscribed nature of the state lottery. In that year, the Legislature designated a New York State Commission on Gambling and charged it with examining the question of amending the Constitution so as to expand the scope of legalized gambling in New York. (L 1971, ch 1014) In this initial report to Governor Rockefeller in February 1972, the Commission stated that “to expand the scope of legalized gambling in this state one iota, a constitutional amendment is required.” (New York State Commission on Gambling Report, February 1972, p 5) It proposed an amendment eliminating the state lottery and giving the Legislature discretion to authorize any kind of gambling in New York. The amendment was passed by the Legislature in 1972.

In its second report in 1973, the Commission reiterated its premise that Article I, section 9, “currently precludes any implementation of designs to expand the scope of legalized gambling in this state” (Commission Report, February, 1973, p. 3) and urged second passage of its proposed amendment and a referendum on the question at the November 1973 election. One of the forms of legalized gambling considered by the Commission and submitted to the Legislature for further consideration should the Constitution be amended, is “sports pools or pool card betting, in which the bettor picks the winner of a number of events and is paid only if a specified percent of his selections are correct.” (Commission Report, February 1973, Appendix, p 8) The amendment did not receive second passage; the lottery was retained; and sports betting was not authorized.

In summary then, it is absolutely clear from the language of the Constitution and the legislative history illuminating its meaning, from the statutory language enacted pursuant to the Constitution, and from the administrative rules promulgated pursuant to the statutes, that the state lottery has invariably been seen and run as a game based on the sale of a ticket on which there would be a number, which number would through the happening of some state-controlled random event, usually a drawing, be designated a winner. There is nothing on which to base the notion that the state either had been or thought it had been authorized to run a gambling game in which winning is tied to the outcome of professional athletic contests. Indeed, as the levels of authority were translated from the constitutional, through the statutory, to the administrative it becomes starkly evident that, over the 19 years since the conception of the constitutional amendment, no supposition that the state is empowered to run a sports gambling program has found authoritative official expression in New York.

The Constitution, The Penal Law and the Courts

a. Constitutional Construction

As a threshold consideration, we must look at the bare terms of Art I, § 9. The language recites specific prohibitions against bookmaking, pool-selling and lotteries, as well as a general prohibition of all other forms of gambling. (As explained earlier, bookmaking and pool-selling were defined statutorily as forms of gambling on inter alia the outcome of contests of skill, speed or power of endurance of man or beast.) We submit that the exception to the anti-gambling policy authorizing a state lottery cannot be read to have repealed the ban against the other enumerated forms of gambling. To do so does violence to the words of the general prohibition. This is true whether or not pool-selling and bookmaking are regarded as special types of lottery (which we submit they are not). The fact is that the proposed game would involve the systematic operation by the state of a scheme of betting on the outcome of sporting events. This is pool-selling or bookmaking. Both are specifically prohibited under Article I, § 9. To contend that they are not means that these specific constitutional words are to be rendered meaningless.

If the Legislature had wanted to carve out a general exception to the overall gambling prohibition for pool-selling, bookmaking or other forms of gambling, it knew how to do so. General phrases were readily available to it in the revised Penal Law (e.g., “contest of chance”, and “gambling activity * * * upon the outcome of future contingent events”) which would have accomplished this result.[9]

If the Legislature had wanted to carve out a specific exception for bookmaking and pool-selling, it knew how to accomplish this as well (witness its 1957 exception for “bingo or lotto” and the specific definition of “bookmaking” in section 225.00, subsection 9, of the Penal Law).

Certainly, one may not, in the teeth of canons of construction, expand the scope of the state lottery exception so as to legalize every illegal gambling scheme involving consideration, some element of chance, and a prize. Stripped to its basics this is the essence of the position espoused by the advocates of the proposed game. To adopt this position means, precisely, that the state could — under the lottery exception in Article I, § 9 — set up and operate gambling games such as roulette, craps, poker and blackjack, jai-alai frontons, dog racing tracks, video gambling games, and gambling casinos — all without approval of the Legislature or the electorate.

That the Legislature could have envisioned such possibilities when it enacted the lottery exception in 1965 and 1966 strains credulity to the limit.

It is axiomatic that an exception to a general policy spelled out in a constitution or a statute must be given a narrow interpretation in order to avoid the danger of the exception becoming so broad as to swallow the rule. The constitutional grant to the state to establish a lottery is framed in Art I, § 9 as an exception to the anti-gambling policy banning lotteries, bookmaking, pool selling, and “any other kind of gambling, except lotteries operated by the state and the sale of lottery tickets in connection therewith as may be authorized and prescribed by the legislature, * * *”

Therefore, “lottery”, as it is used in the exception quoted, must be given a narrow interpretation. Moreover, the constitution must be interpreted so as to give effect to the intent of the framers. From the legislative history of the amendment and the statutory enactment of the contemporaneous legislature, it is clear, as discussed above, that only a traditional lottery, essentially based on the drawing of a ticket, was considered or “authorized and prescribed”.

The argument for sports betting would seek to expand the Constitution’s “lottery” definition by relying on the somewhat broadened court definitions of the term in cases involving prosecutions under the penal code. The logic of that position would require assent to the novel proposition that the range of the State’s authority to operate a lottery is co-extensive with the reach of the courts to enforce the anti-lottery provisions of the Penal Law. Seen from a slightly different perspective, it means that the ingenuity of criminals to devise new gambling methods (as long as such methods remain prosecutable as illegal lotteries), defines what the State may mount as a legal lottery. Such transformation of forbidden criminal behavior into permissible State action would require an alchemy unknown to the legal arts.

On another level, it is clear that the proponents of sports betting are looking at the construction of the wrong statute when arguing for a broadened definition of lottery. The state lottery could only be implemented “as may be authorized and prescribed by the legislature.” (NY Const, Art I, § 9; emphasis supplied.)

The Legislature’s act authorizing and prescribing the state lottery was contained in chapter 278 of the Laws of 1967 and is currently found as § 1600 et seq of the Tax Law. It is not contained in the Penal Law. Since the issue at hand is the limits of the State’s authority to conduct gambling, it is the 1967 Tax Law provisions on the state lottery whose construction is required. To seek guidance regarding what kind of gambling the State may conduct by consulting judicial interpretations of the Penal Law is misguided. Obviously, there is some conceptual relationship between the statutory provisions outlawing gambling and the statutory provisions by which the State may conduct it. But, as we are told in another authoritative source, one does not get figs from a thistle, and one does not get the gist of the Tax Law from the gloss on the Penal Law.

The state lottery statute is permeated with the idea of the sale of tickets, one or more of which will be drawn or selected to determine a winner or winners. As an expression of the contemporaneous legislature and thus probative of the intent informing the constitutional language, the act further strengthens the conclusion drawn from the legislative history of the amendment itself that only a traditional lottery based on random chance was envisioned.

b. The Penal Law

Even if the penal statutes and case law thereunder conceivably could be regarded as the proper place to look for expressions of the intent in formulating the language of Art I, § 9, we would still find in that body of law no support for the proposition that the State, by virtue of its lottery authorization, may run a sports betting program. The argument on behalf of sports betting is as follows: (1) that starting with People
v Lavin (179 N.Y. 164 [1904]) and continuing in a line of decisions, the New York courts adopted a broad definition of “lottery” for penal purposes which modified the “pure chance” concept and substituted one in which bettors’ skill could play a role as long as chance dominated in determining the outcome; (2) that the framers of the State lottery amendment can reasonably be assumed to have been aware of this broadened definition of “lottery”; (3) that they intended, in using the term “lottery”, to authorize games involving the skill of the bettor as long as chance dominates and controls the game; and (4) that sports card betting is such a game, and, therefore, may be run by the State.

We believe that the revised Penal Law itself presents conclusive grounds for rejecting this argument. In 1965, the same Legislature which wrote the language of the State lottery amendment and gave it first passage also recodified the Penal Law. In doing so it grappled with the problem of the skill/chance continuum and its implication for various types of gambling activity defined in new section 225.00 of the Penal Law. The Lavin court had written: “The test of the character of the game is not whether it contains an element of chance or an element of skill, but which is the dominating element that determines the result of the game”. An attentive reading of the 1965 Penal Law shows that the Legislature rejected this test in crafting a new definition for “lottery”. As explained in the Practice Commentary (McKinney’s, Vol 39, p 116), the definitional section “does not adopt the `dominating element’ test. In many instances, it may be virtually impossible to determine whether chance or skill dominates; it should be sufficient that, despite the importance of skill in any given game, the outcome depends in a material degree upon an element of chance” (Practice Commentary, McKinney’s Vol 39, p 116).[10]

This test is, of course, a more liberal one allowing a greater degree of bettor skill to be implicated in a game. Indeed, skill might even dominate as long as chance affected outcome in a material degree. However, it is crucial that the test is included in the 1965 Penal Code definition of a new gambling form “contest of chance”, not in the definition of “lottery”.

A “contest of chance” is defined as “any contest, game, gaming scheme or gaming device in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor therein” (Penal Law, § 225.00 [1]). A “lottery” is defined as “an unlawful gambling scheme in which (a) the players pay or agree to pay something of value for chances, represented and differentiated by numbers or by combination of numbers or by some other media, one or more of which chances are to be designated the winning ones; and (b) the winning chances are to be determined by a drawing or by some other method based upon the element of chance; and (c) the holders of the winning chances are to receive something of value.” (Penal Law, § 225.00 [10].) (Emphasis supplied.)

Thus, the 1965 Legislature, in codifying the case law on gambling, dropped the Lavin test and adopted a more liberal one, not for a “lottery”, but for a “contest of chance”. The Legislature retained chance alone as the element for determining winners in a “lottery”. This same Legislature framed the terms upon which the State might conduct gambling, and it did not write an amendment giving the State authority to conduct a “contest of chance”; it wrote an amendment giving the State authority to conduct a “lottery”. Sports card betting is not a “lottery” in the sense in which the 1965 Legislature demonstrably meant the term, even in the penal sense, and a sports betting program may not be operated by the State under the current constitutional provisions.

c. The Penal Cases

As stated earlier, the argument for State-run sports betting proceeds from the premise that a broadened definition of “lottery” has been adopted by the courts of New York, i.e, that a lottery may countenance a degree of skill to be exercised by the bettor as long as chance dominates and controls the outcome of the game. Authoritative judicial expression for this proposition is sought in the Court of Appeals decision i People v Lavin cited earlier.[11]

As demonstrated above, we do not believe that Lavin and the line of penal cases following it measure what the State may do pursuant to the State lottery amendment or under the Penal Law. But even assuming, arguendo,
that Lavin lives and could be deemed probative of what shape the State lottery may take, we still find that the case cannot be read to allow sports betting under the State lottery exception in Article I, section 9.

The facts in the Lavin case follow. The Floradora Tag Company mounted a campaign to increase sales of its brands of cigars. The public was invited to estimate the number of cigars on which the United States government would collect taxes during the month of November 1903. The entrant whose estimate came closest to the actual number would win $5,000. The contest was prosecuted under section 327 of the Penal Law as a lottery. More precisely, a New York publisher whose trade journal advertised the game was charged with the misdemeanor of advertising a lottery within the State; Floradora was headquartered in Jersey City.

The defendant contended: (1) the game was not a lottery since knowledge of the tobacco trade and judgment and prediction based on such knowledge would come into play in the bettor’s selection of a number, and (2) the presence of such skill would remove the game from the ambit of the Penal Code definition (§ 327) of lottery, i.e., “a scheme for the distribution of property by chance, among persons who have paid or agreed to pay a valuable consideration for the chance, whether called a lottery, raffle or gift enterprise or by some other name.” (Emphasis supplied.)

The court rejected the argument. It pointed out that the number of cigars taxed in the month prior to the one in the contest was some 562 million; that monthly fluctuations were in the order of 40 to 90 million; that guessing the 9 digit number that would eventuate had to be regarded as essentially beyond anyone’s skill; that “chance was the dominating element that determine[d] the result of the game (id., at 171)”; and that a lottery does not cease to be such because its outcome might be affected by skill “to some slight extent” (id., at 174). The court declared the game an illegal lottery and remanded the publisher to custody.

The sports betting advocates read Lavin and its progeny as authority to introduce State-run sports betting on the theory that skill on the bettor’s part is now a permissible element of a lottery. What such an argument overlooks (inter alia) is that at the heart of the game i Lavin is a random chance event, i.e., the eventuation of that final 9 digit integer, and that the game sought to eliminate as far as practicable the elements of skill and judgment (id., at 174). It is the occurrence of that number which determines the outcome of the “lottery”, and that event is a random chance event. In the sports betting context, there is no such random chance event.

Is is obvious that the Lavin case is inapplicable because the contingent events at the heart of the sports betting “lottery” are football games. Football games are not chance events; they are skill events. No football game, or any other professional athletic contest can be deemed an event in which chance determines the result. To say it does is to say that any eleven individuals could play football against the NFL champions and have a roughly equal chance of winning. In addition, the exercise of bettor’s judgment in trying to select the winners or losers of such contests, and to figure the point spreads, involved substantial (not “slight”) skill.

The Lavin court reasoned that a thin overlay of bettor’s skill does not strip the “dominant chance” characteristic from the inchoate contingent event which determines the outcome of the bet. But this analysis presupposes that such inchoate event is a chance event. The Lavin doctrine also clearly does not encompass games in which the bettor must exercise, and is indeed induced to exercise, considerable skill, such as in analyzing and predicting the outcome of sports events.

The Lavin court immediately after proclaiming the “dominant chance” theory states:

This is in harmony with our earlier decisions,
though the exact question has not been before us. In People ex rel Lawrence v. Fallon (152 N.Y. 12) it was held that the award of a prize or stakes for the successful competitors in a horse race was not a lottery. Judge Martin there said: “There is certainly a great difference between a contest as to the speed of animals for prizes or premiums contributed by others and a mere lottery where the controlling, and practically the only, element is that of mere chance alone. A race or other contest is by no means a lottery simply because its results is uncertain or because it may be affected by things unforeseen and accidental.” Equally we think that a lottery does not cease to be such and becomes a mere contest because its result might be affected, to some slight extent, by the exercise of judgment (People v Lavin at 171). (Emphasis supplied.)

What the court is expressly saying is that a lottery is one thing and betting on the outcome of sporting contests is something else. No marginal interplay of skill and chance changes the former into the latter, or viceversa. The two types of gambling have been historically distinct in New York’s statutes, case law and, since 1894, constitutional provisions. Lavin explicitly preserved that distinction.

Accepting bets on the outcome of a football game is the legal equivalent of accepting bets on the outcome of a horse race. Accepting bets on a parlay of 4 to 14 football games does not constitute running a lottery any more than accepting bets on the daily double, a 4-horse or 14-horse parlay transforms a bookmaker or pool-seller into a lottery operator.

No New York case since Lavin has ever held that a gaming scheme wherein the bettor places wagers on the outcome of a sporting event or events is a lottery.

d. The Delaware Cases

We need look no further than New York law to answer the question we have been considering. However, since Delaware is the one state to have run a sports betting program under the lottery provision in its constitution, a brief discussion is in order. In 1974, the Delaware constitution was amended to allow for a state lottery. As part of its lottery operations, Delaware instituted a sports betting program similar to the one proposed for New York. The National Football League sued to enjoin the game alleging, inter alia, that it violated Art. II § 17 of the Delaware Constitution. In NFL v Governor of State of Delaware (435 F. Supp. 1372
[1977]), the federal district court rejected the league’s contention that the game was beyond the scope of the state’s constitutional permission to run a lottery. It found that the football card game was a “lottery” and based its finding essentially on the intent underlying the relevant provision of that state’s constitution.[12] As an aid in discerning such intent the court looked to the implementing statute which was passed by the same Delaware Legislature which gave final passage to the constitutional amendment.

That contemporaneous implementing statute defined the Delaware lottery to mean “the public gaming system or games established and operated pursuant to this chapter and including all types of lotteries.” The act also empowered the state lottery director to enter into contracts to promote and operate the games. It reads, “This authorization is to be construed to include, but not be limited to, contracting with any racing or other sporting association to conduct sporting events within any race track or sports field in the State the outcome of which shall determine the winners of a state game or, as an alternative, to affiliate the determination of the winners of a game with any racing or sporting event held within or without the State.” 29 Del. C. § 4805(b) (4). The court also noted that the Legislature when considering this act had before it a consultant report to the Delaware Lottery Study Committee which had proposed a football card game like the one adopted (id., at 1384).

On the basis of such findings and a discussion of the odds against a bettor winning the game as indicative of “dominant chance”, the federal court found the game a permissible lottery. Obviously, the legislative history which prompted the court’s decision is totally different from that of New York where, as noted earlier, no inference can be drawn that the “outcome [of sporting events] shall determine the winner for a state game.” Applying the same reasoning to New York, we believe the NFL court would have invalidated the game it sustained in Delaware.

However, we need not conjecture at length on the matter in light of a subsequent decision by the Delaware Supreme Court. In 1978, the Governor of Delaware asked the court for its opinion on the constitutionality of a state plan to conduct pool betting on the outcome of jai-alai games, (including exotic wagers such as trifecta, superfecta and other multiple event predictions) as an element of its lottery program. In Opinion of the Justices (385A.2d 695), the court found that such betting was not allowed under the Delaware constitution. (The football card game was a moot issue by 1978; the game had been abandoned by the state when it proved unprofitable and vulnerable to manipulation by professional gamblers.) The Delaware court applied the accepted canons of constitutional construction and found no authority for the state government to conduct such betting.

The Delaware Legislature had passed and the Governor signed in August 1977 an act authorizing pari-mutuel betting on jai-alai games (29 Del. C. Ch. 48, Subchapter II, §§ 4820-4894). The authority for the act rested on Art II, § 17 of the Constitution which had been amended in 1973 to allow “lotteries under State control.”

In words of sharp pertinence to the question at issue now in New York, the court wrote:

It is clear that the authors of the 1973 Revision did not ignore the history and progression of Art. II § 17; it is neither reasonable nor realistic to assume that they did. The pattern of amendments of § 17 has been characterized consistently by the adoption of specific and narrow exceptions to the general constitutional interdiction against gambling. Governed, as a constitutional exception is, by the rule of narrow and strict construction, the Lottery Exception may not be given the broad and expansive interpretation urged by the proponents, which would legalize unlimited pari-mutuel betting on all types of sporting events, on and off the premises, under the guise of the Lottery Exception. If the 1973 drafters had intended to eliminate the 75-year old distinction between lotteries and pool-selling, and if they had intended to remove from the general constitutional prohibition the many types of gambling which would be permissible under the broad construction of the term “lottery” urged by the proponents, we think it indisputable that they would have done so in clear and unmistakable terms and not left it to implication and inference which would require such mental and legal gymnastics to accept * * * It is our conclusion that the pool or pari-mutuel system of wagering has never been considered a lottery by the constitutional draftsmen of our State * * * and that it may not be made so now either by legislative act or judicial fiat. Common and ordinary understanding of the word “lottery”, then and now rejects the concept of pari-mutuel betting on sporting events. (Id., at 704, 705.) (Emphasis supplied.)

We believe that the New York courts presented with a sports betting program under the guise of a State lottery would reason similarly and conclude precisely as the Delaware court did.

Indeed, two factors argue for the conclusion that the New York courts would invalidate sports betting with even greater alacrity. First, the initial Delaware statute setting up a lottery was very broad and specifically authorized games whose result would be determined by the outcome of sporting events. The comparable New York statute, as noted earlier, contemplates only traditional lotteries essentially based on the drawing of a ticket to determine a winner. Secondly, the Delaware statute authorizing the jai-alai betting game was enacted only 4 years after the constitutional amendment and might be considered roughly contemporaneous with the amendment and, therefore, probative of constitutional intent. The Delaware court held otherwise. In New York, assuming sports betting legislation were passed and signed in the 1984 session, 19 years would have passed since the Legislature wrote and gave first passage to the State lottery amendment, far too long an interval to be considered at all probative of the intent guiding the framers of the amendment.[13]


To summarize, we find that sports betting is not permissible under Article I, section 9. of the New York Constitution. The specific constitutional bans against bookmaking and pool-selling as well as the general ban against “any other form of gambling” not expressly authorized by the Constitution would operate to invalidate a statute establishing a sports betting program. We find the arguments advanced on behalf of sports betting unsupported by the language of the Constitution, the legislative history of the State lottery amendment, its contemporaneous implementation by the Legislature or the history of the State lottery in the nearly two decades since it was conceived. In addition, such arguments proceed from faulty premises in that they attempt to find the meaning of one law by looking at interpretations of another and seek to equate what is forbidden to criminals with what is allowed to the State. Further, the arguments rely on a judicial definition of a lottery which emerged from a case inapplicable to sports betting and which was legislated out of existence in the 1965 codification of the Penal Law.

If the State government is to be authorized to run a program in which it accepts wagers on the outcome of professional athletic contests, either single contests or multi-contest parlays, such authorization can only be acquired through an amendment to the Constitution.

[1] In a prior opinion, dated September 8, 1981, the Attorney General concluded that certain electronic games which the Division wished to introduce would require a constitutional amendment (1981 Op Atty Gen 68). Since questions about the constitutionality of the proposed sports betting game are raised under certain aspects of that earlier opinion, this opinion is also being issued to provide a full analysis.
[2] To the extent that unresolved details of the game may be relevant to the legal analysis, they have been identified, and options under review by the Division, considered. To the extent that the game format undergoes further changes, of which we are not aware, we are prepared to address them in supplemental opinions.
[3] The statute was the Legislature’s response to mounting public concern about several distinct forms of betting which had developed in connection with horse racing and other sporting events. For example, in the early days of baseball, there were organized baseball pools which nearly wrecked the game, and in the 1870s there were similar scandals. See reply by Governor Thomas E. Dewey on January 16, 1950 to a proposal by former New York City Mayor William O’Dwyer to legalize gambling on public sports events. Ann Acad Pol Sci (May 1950).
[4] The penal prohibitions against bookmaking and pool-selling were codified in section 986 of the Penal Law in 1910 (L 1910, Ch 488) and the lottery offenses appeared in Article 130 §§ 1370-1388) of the Penal Law, having been derived for the most part from Penal Law, § 325, L 1881, ch 676. In 1965, the corporate gambling offenses in the Penal Law underwent comprehensive revisions in new Article 225 (L 1965, ch 1030), but the historic distinction between lotteries and betting on future contingent events, such as sporting events, was preserved. Wagering on sporting events has repeatedly implicated the bookmaking and pool-selling provisions of the Penal Law. See Murphy v Board of Police, 11 A 66 N Cas 337 (1882) (walking match); Matter of Dwyer, 14 Misc. 204 (Sup Ct Kings Co 1894) (horse races); People v McCue, 87 App. Div. 72 (2d Dept 1903) (horse races); Reed v Littleton, 275 N.Y. 150 (1937) (dog races); Meyers
v Bennett, 22 F. Supp. 357 (SDNY 1937) (dog races); People v Wright, 100 Misc. 205 (Co Ct Albany 1917) (baseball pools); People v Jacobs, 107 N.Y.S.2d 802 (Kings Co Ct 1950) (sports betting cards); People Variano, 5 N.Y.2d 391 (1959) (daily double bets on horses); People Federico, 130 N.Y.S.2d 542 (Pol Ct Mt Kisco) (baseball games). As succinctly stated by the Court of Appeals in People v Abelson, 309 N.Y. 643
(1955): “* * * the corpus delicti of the crime of bookmaking * * * is the acceptance of bets on a professional basis * * * upon the result of any trial or contest of skill, speed, or power of endurance, of man or beast”. (p 650)
[5] See Senate Transcript, pp 293, 298, 308, 315, 327, 339, 350, 354, 356, 360, 4765, 4769, 4780, 4787, 4788, 4794, 4807.
[6] According to Senator Brownstein, a sponsor: “I think clearly we understand, certainly as a matter of legislative intent, that what we are talking about here, and especially with reference to the constant reference to the New Hampshire lottery and the sweepstakes, what we are talking about here is a state-operated game of chance which is dependend upon designated races * * *” (Tr 4807).
[7] The kinds of decisions left to the Legislature’s discretion included number of lotteries, races or drawings (304, 311, 335, 341, 4777, 4781, 4790, 4797); nature and amount of prizes (333, 351, 4777); price of tickets (311, 335), nature of machines to sell tickets (308, 335, 351), etc.
[8] [Black’s Law Dictionary fifth edition, defines “prescribe” in pertinent part to mean “to lay down authoritatively as a guide, direction or rule; to impose a peremptory order * * *” (p 1064). The same legal dictionary defines “peremptory” in pertinent part to mean “imperative final; decisive, absolute, conclusive; positive; not admitting of question, delay, reconsideration, or of any alternative” (p 1023; emphasis supplied).]
[9] The amendment recommended by the Commission on Gambling and passed once by the Legislature would have allowed such gambling “as may be prescribed by the legislature and operated by the state or a public benefit corporation created for the purpose of operating such activities” (1972 Senate Bill 8634).
[10] The Temporary Commission to Revise the Penal Law completely re-wrote the New York law on gambling and reported to the Governor and Legislature that it did so in part “through a careful set of definitions of elementary terms”. New York Legislative Documents, 1963, No 8, p 42. (The McKinney’s commentator was a staff counsel to the Commission.)
[11] It should be noted that the most recent Court of Appeals pronouncement defines lottery as “a scheme for the distribution of property in which a valuable consideration is paid on chance alone, with no admixture of skill” People v Hines, 284 N.Y. 93, 101 (1940).
[12] The court also mused on the inference to be drawn from the fact that the term “pool selling” was dropped from the Delaware Constitution when the lottery exception was adopted. Though the court did not base its holding thereon, it found more plausible than not the inference that pool selling was thereby legitimized in Delaware. The Delaware Supreme Court rejected such reasoning in the case discussed below.
[13] Interestingly, a majority of the members of the 1977 Delaware Legislature had also been members of the 1974 Legislature which had voted final approval of the lottery amendment and its implementing statute. In New York only 10% out of the current complement of legislators were members of the Legislature when the New York lottery amendment was approved.