Lottery, NCAA in discussions over fantasy sports
By Paul F. Vang
Montana Sports Action, the Montana Lottery-operated pro football and NASCAR auto racing fantasy games, developed to benefit Montana horse racing, has run into an inquiry from the National Collegiate Athletic Association.
The center of the disagreement, surprisingly, is in Delaware. Delaware and Montana are two of the four states that have a grandfathered exemption from a 1992 federal law that mostly bans gambling on sports. Nevada and Oregon also fall under this exemption.
This spring, the Delaware legislature passed legislation allowing betting on the outcome of sporting events. Later, the Delaware Supreme Court ruled that the new law was constitutional.
The National Collegiate Athletic Association (NCAA) then warned Delaware officials that the state could not host any NCAA playoff games because of an NCAA rule that states, “No session of the championship may be conducted in a metropolitan area that permits legal wagering that is based on the outcome of any event (e.g. high school, college, or professional) in a sport in which the NCAA conducts a championship.”
In the case of fantasy leagues, prizes are awarded based on the performance of a group of individual players from numerous teams, which comprise a participant's “fantasy” team. Thus prizes are not awarded on the outcome of a sporting event.
In the case of sports pools, participants randomly select a space on a grid. After all spaces are sold, numbers corresponding to a game score are randomly drawn and assigned to spaces. Thus, no participant actually wagers on the outcome of an event, since the results are entirely random.
In an interview on ESPN, a spokeswoman for the NCAA, Stacey Osburn, was questioned about the organization’s warning to Delaware, in that Montana, which hosted football playoff games last year, also has sports gaming in the form of legal fantasy leagues and “sports pool boards."
Osburn responded, “We did have an administrative oversight previously, but that was an error on our side and it’s not going to happen again. We’ve taken steps to make sure it doesn’t happen again.”
Osburn’s remarks caused concern across Montana, especially in Missoula and Bozeman, where state universities compete in Division I sports and in which playoff games have been held in recent years, especially in Missoula, where the University of Montana Grizzlies are a perennial football power.
David Aronofsky, an attorney for the University of Montana told the Missoulian, “We’re looking at it very, very carefully to see what, specifically, the NCAA doesn’t permit, what the basis for that is. We haven’t formed any conclusions.”
Peter Fields, Montana State University’s athletic director, told the Montana News Station, “I was a little surprised, even shocked. I didn’t know we have fantasy football in Montana.”
Later, in a joint statement, Fields and UM A.D. Jim O’Day said in an e-mail, “Jim and I will work through the state to come to a resolution for this issue,” adding that he voted to support an expansion of the NCAA’s anti gambling measure to expand the rule from just basketball to all NCAA sports.
Montana State University football coach Rob Ash, on the other hand, took the news in stride, saying, “We hope to get it changed, but I’m not going to worry about it. I’m more concerned about getting there [to the playoffs].”
The new State Lottery-sponsored football fantasy game, which had its premiere season in 2008, is based on individual player performance during professional football games, but not actual game results. As auto racing isn’t a collegiate sport, the current NASCAR-based fantasy game presumably isn’t a factor.
John Tooke of Miles City is a long-time observer of Montana’s legalized gaming, as well as the current chairman of the Montana Gaming Advisory Council. He was involved in the original fantasy sports pari-mutuel legislation that passed in 2007.
“They [NCAA] got painted into a corner by the governor of Delaware,” he said in a phone interview, adding, “From a practical standpoint, fantasy games aren’t really sports betting. That’s a quantum leap from what we’ve got.”
Tooke noted some anomalies in the NCAA rules, such as the football bowl game that annually takes place in Las Vegas, the epicenter of American sports gambling. He also pointed out that when Detroit hosted the NCAA basketball Final Four, the neighboring city (and part of the Detroit metropolitan area) of Windsor, Ont. simply suspended sports betting in Windsor casinos for the playoff weekend.
In a phone interview, U of M's O’Day said, “We estimate that the economic impact of a home football weekend in the Missoula area is $5 million to $7 million. A home playoff game is a little harder to estimate, as we usually don’t sell out. It’s cold and it conflicts with holidays. Still, if a couple comes to Missoula for a playoff game, one may buy a ticket and go to the game while the other goes shopping, so it probably balances out.”
O’Day suggests that the NCAA might be the real loser if it banned playoff games in Montana. “The NCAA gets 85 percent of the gate. In 2006 we hosted two playoff games in Missoula and we sent the NCAA a check for just under $1 million. The university cleared a little over $100,000.”
The U of M’s Washington Stadium is one of the larger stadiums in the NCAA Football Championship Series division, and large crowds are the norm. “Historically,” O’Day added, “we generate more money for the NCAA than anyone else (in the division).”
O’Day anticipates no early resolution to the dispute. He points out that the NCAA gaming division deals with gambling issues, while the Division I Football Championship is yet another branch. “It’s a big organization, and they’re both doing their jobs. It’ll probably take the rest of the summer for things to work out.”
According to the NCAA web-site, O’Day serves as a western region representative of the Division I Football Championship Committee.
In the first season of professional football fantasy games, $87,505 was wagered on fantasy games. $64,754.80 was paid out to winning players, and the Board of Horse Racing picked up $13,910. After 16 weeks of NASCAR fantasy games, $66,240 has been wagered, an average of $4,140 per week, with winning players picking up $49,013.20, and the Board of Horse Racing getting $10,508.
Jo Berg, Communications Director for Montana Lottery commented on the issue, “It’s been kind of interesting. I’ve certainly been talking to a lot of people in the media.”
As to the State’s contention that fantasy gaming does not interfere with NCAA rules, she said, “I hope we’ve made that clear to them. We, from the governor’s office on down to us, are in agreement that we’re in compliance.”
Source: The Montana Tavern Times, July 2009, published monthly by Continental Communications, 125 W Granite, Suite 102, Butte, MT 59701.