Articles Posted in Gaming Law

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The National Collegiate Athletic Association (NCAA) randomly allocated championship tickets to applicants who had offered to purchase tickets by submitting the face value of the tickets along with a non-refundable handling fee. The face-value amount (but not the handling fee) was refunded to applicants whose offers were not accepted. Plaintiffs in this case submitted offers to the NCAA to purchase tickets for the NCAA Division I men's basketball tournament, but their offers were not accepted. Dissatisfied with not being able to purchase tickets, the plaintiffs filed suit against the NCAA in federal court, alleging several claims, the underlying basis being that the NCAA's ticket-distribution system constituted an unlawful lottery under state law. The trial court dismissed the complaint for failure to state a claim, holding that even if the NCAA was operating an illegal lottery, plaintiffs' claims were barred by in pari delicto because they were willing participants in it. On appeal, the majority of the appellate panel held that the ticket-distribution process was a lottery, and the in pari delicto defense was not available because the NCAA had a greater degree of fault than the plaintiffs. The NCAA appealed the decision, and the same appellate panel vacated its prior decision. Pursuant to state appellate procedure, the panel presented certified questions for Supreme Court consideration, in particular, whether the NCAA's ticket distribution process was an unlawful lottery. The Court found that state law does not define "lottery," and following its holding in Tinder, defined the term as "a scheme for the distribution of prizes by lot or chance among those who provided ⦠consideration." The Court found that the NCAA distribution scheme does not fall within definition, and is not an unlawful lottery under state law.