Pursuant to 10 Del. C. § 141 and 29 Del. C. § 2102, you asked the Justices for their opinions regarding the proper construction of Article II, Section 17 of the Delaware Constitution in relation to your initiative to reinstitute a sports lottery. To assist you and the General Assembly in fulfilling your respective constitutional duties to enact a balanced budget before the end of the fiscal year, we agreed to expedite our response. For the reasons that follow, we answer your question in part, but conclude that certain aspects of your question cannot be answered on the current record.

FACTS

In a March 19, 2009 letter to this Court, providing a basic outline of the proposed sports lottery, you described the sports lottery as follows:

In your initial letter, you requested the Justices' opinions regarding the following question:

In a March 31, 2009 supplemental letter, you forwarded a copy of House Bill 100, which was the then-pending enabling statute for the proposed sports lottery.

We appointed Andre G. Bouchard of Bouchard, Margules & Friedlander P.A., to present an affirmative response and Lawrence C. Ashby of Ashby & Geddes, to present a negative response to your question.1 We also asked counsel to consider the following subsidiary issues that we concluded might affect our ability to answer your question:

On April 6, 2009, Members of the General Assembly offered House Substitute No. 1 for House Bill 100. Although we expressed concern, in an April 30, 2009 letter, that the circumstances underlying your initial request for our opinions may have significantly changed and were in flux (possibly mooting your initial request), we agreed to maintain the original briefing schedule.

The General Assembly then passed House Substitute No. 1 to House Bill 100, as amended, by the requisite majority, and you signed that legislation on May 14, 2009. That same day, you renewed your request for our opinions, informing us that you had instructed the Department of Finance and the Delaware Lottery Office to begin implementing a sports lottery. You also reiterated the need for a timely response to enable you to work with the General Assembly to craft and pass a balanced budget for fiscal year 2010 before June 30, 2009.

On May 21, 2009, we heard oral argument. In addition to hearing counsel for both sides of the issues, we allowed the National Football League (we had already allowed the NFL to submit a brief as amicus curiae) to participate in the argument.

DISCUSSION

When presented with a request for an Opinion of the Justices, the individual Justices may give the Governor "their opinions in writing touching the proper construction of any provision in the Constitution of this State . . ., or the constitutionality of any law or legislation passed by the General Assembly."2 It is well within the Justices' discretion to decide whether and to what extent to answer questions the Governor presents.3 Because we are convinced that your questions touch upon the proper construction of Article II, Section 17 of the Delaware Constitution, we answer your questions (to the extent possible), to better enable you and the General Assembly to discharge your respective constitutional duties to present and enact a balanced budget.

The fact that you have already signed H.S. No. 1 to H.B. 100 does not prevent us from providing an advisory opinion. 10 Del. C. § 141(a) contemplates an opinion about "the constitutionality of any law" as well as "legislation passed" (but presumably as yet unsigned). For example, in 1978 the Justices answered a question presented by Governor du Pont concerning legislation that he had already signed.4 In that case, the Justices recognized the Governor's need to "commit funds and hire personnel."5 In 1981, the Justices similarly answered a question concerning legislation already signed by Governor du Pont because his request "establishe[d] a need for [an] opinion due to present constitutional duties awaiting performance by the Governor."6

In your May 14, 2009 letter renewing your request for our opinions, you advised us that: "Over the next several weeks, the State will begin working with the video lottery agents, potential vendors, and other interested parties to create a sports lottery." You also advised us of your view that the potential revenue generated by a sports lottery is "an important component" of constructing a balanced budget. Therefore, it is clear that our opinions may assist you in committing funds, hiring personnel, and addressing the current budgetary situation.

To determine whether the proposed sports lottery, in whole or in part, constitutes a permissible lottery under Article II, Section 17 of the Delaware Constitution, we must address several subsidiary issues. They are: (1) whether the sports lottery will be under State control; (2) whether it is constitutionally permissible to delegate to the Director of the State Lottery the authority to "provide for the features and attributes" of the sports lottery; (3) whether lotteries, as permitted by the Delaware Constitution, must be games of pure chance or predominately chance; and finally (4) depending on our answers to those questions, whether the three specific games described in your original letter are constitutionally permissible.

The Proposed Sports Lottery Will be "Under State Control"

Article II, Section 17(a) of the Delaware Constitution permits "[l]otteries under State control for the purpose of raising funds."7 Here, we each conclude that the State will control all significant aspects of the sports lottery. As with the currently operating video lottery, the State Lottery Director will control the sports lottery. The Lottery Director will be responsible for determining the "[t]ype and number of sports lottery games to be conducted, the price or prices for any sports lottery games, the rules for any sports lottery games, and the payout and manner of compensation to be paid to winners of sports lottery games." H.S. No. 1 to H.B. 100 requires the Lottery Director to "administer the sports lottery in a manner which will produce the greatest income for the State while minimizing or eliminating the risk of financial loss to the State."

The Lottery Director will oversee the State's purchasing or leasing of all sports lottery machines,8 which shall appear "exclusively at facilities operated by video lottery agents licensed by the State."9 As is the case with the video lottery's proceeds, the Lottery Director will manage the daily or weekly transfer of the sports lottery's proceeds to the State Lottery Fund.10

The Lottery Director will also oversee the licensing of a risk manager, who "must be a bookmaker currently licensed to operate, and operating, sports books in the United States."11 The risk manager may be an independent contractor and need not be a State employee. Although the risk manager will be responsible for defining certain crucial aspects of the sports lottery, the State frequently hires outside experts without relinquishing its inherent control. We note that the State already contracts with outside entities in its control and operation of the video lottery.12

For the above reasons, we conclude that the sports lottery satisfies the State control requirement found in Article II, Section 17(a) of the Delaware Constitution.

H.S. No. 1 to H.B. 100 Does Not Impermissibly Delegate Legislative Power

We further conclude that the sports lottery legislation does not impermissibly delegate legislature power to the Lottery Director.

The General Assembly need not spell out every detail concerning the administration of a law.13 A statute does not unlawfully delegate legislative power, if the statute "establish[es] adequate standards and guidelines for the administration of the declared legislative policy and for the guidance and limitation of those in whom discretion has been vested."14 This nondelegation principle is intended to prevent "arbitrary and capricious action, and to assure reasonable uniformity in the operation of the law."15

We have previously recognized that "[t]he preciseness of the statutory standards will vary with both the complexity of the area at which the legislation is directed and the susceptibility to change of the area in question."16 It also is well established that, at times, the General Assembly may better achieve its legislative goals by deferring to an administrative agency's greater skill and knowledge.17 For example, the General Assembly relies on the Department of Natural Resources and Environmental Control to fix and regulate hunting seasons and bag limits as necessary to "protect, manage and conserve all forms of protected wildlife of this State."18

We conclude that H.S. No. 1 to H.B. 100 does not impermissibly delegate legislative powers to the Lottery Director. In that legislation, the General Assembly established adequate standards and guidelines by requiring the Lottery Director to initiate a sports lottery governed by those rules and regulations that the Lottery Director believes "will produce the greatest income for the State while minimizing or eliminating the risk of financial loss to the State."19 H.S. No. 1 to H.B. 100 explicitly defines a sports lottery as "a lottery in which the winners are determined based on the outcome of any professional or collegiate event, including racing, held within or without the State, but excluding collegiate sporting events that involve a Delaware college or university and amateur or professional sporting events that involve a Delaware team."20

In this case, the scope of the delegation is comparable to the scope of the authority delegated to the Lottery Director over existing State lotteries. In administering the video lottery, the Lottery Director is responsible for determining the "[t]ype and number of games to be conducted," the "[p]rice or prices of tickets for any game," the "[n]umber and sizes of the prizes on the winning tickets," and the "[m]anner of selecting the winning tickets."21 The General Assembly reasonably deferred to the Lottery Director's skill and knowledge in creating the specific sports lottery games, and no reasons are cited to us creating concern that the Lottery Director would exceed his authority or otherwise act in an arbitrary or capricious manner.

We, therefore, conclude that H.S. No. 1 to H.B. 100 does not impermissibly delegate legislative authority to the Lottery Director.

The Delaware Constitution Permits Lotteries Involving an Element of Skill

The next issue we must address is whether the fact that the sports lottery involves an element of skill precludes it from being a "lottery" authorized by the Delaware Constitution.

Although Article II, Section 17 authorizes State controlled lotteries, the Delaware Constitution does not define the term "lottery." We are fortunate, however, to have the benefit of analyses by two distinguished Delaware jurists' concerning the meaning of the term "lottery." Then Delaware District Court Judge Walter K. Stapleton addressed this issue in National Football League v. Governor of the State of Delaware, where the NFL sought injunctive relief barring Delaware from conducting a lottery based on the NFL's games.22 Judge Stapleton found "three elements necessary to a lottery: prize, consideration and chance."23 For reasons discussed below, Judge Stapleton determined that lotteries, as permitted by the Delaware Constitution, need not be matters of pure chance.24 Rather, the element of chance "may be accompanied by an element of calculation or even of certainty" provided that "chance is the dominant or controlling factor."25

One year later, Governor du Pont asked the then three Delaware Supreme Court Justices for an advisory opinion addressing whether pool or parimutuel wagering on jai alai exhibitions constitutes a lottery under state control within the constitutional exception.26 Although Chief Justice Herrmann and Justice Duffy did not address whether the Delaware Constitution authorizes lotteries that involve an element of skill, Justice McNeilly explicitly adopted Judge Stapleton's "cogent analysis" and lottery definition.27

In our opinion, Judge Stapleton convincingly and correctly interpreted Article II, Section 17. He described a split of authority concerning whether a lottery may incorporate an element of skill as follows:

Judge Stapleton concluded that "[a]bsent clear language in the Constitution supporting a contrary rule," one should read Article II, Section 17 consistent with the majority, dominant factor rule.29 Although it is not without significance that a majority of jurisdictions in the United States apply the dominant factor rule, we find Judge Stapleton's historical review of the Delaware legislature's interpretation of the term "lottery" entirely persuasive, independent of any jurisdictional "headcount."

Judge Stapleton explained that, by two separate two-thirds votes in 1972 and 1973 (with an intervening election), the General Assembly amended Article II, Section 17 to authorize State lotteries.30 He noted that "[t]he same Legislature that gave final approval to the constitutional amendment in its second session in 1974 established the State Lottery and State Lottery Office."31 "In doing so, it construed the term lottery broadly: `"Lottery" or "state lottery" or "system" shall mean the public gaming systems or games established and operated pursuant to this chapter and including all types of lotteries.'"32 Judge Stapleton also determined that "`Games' or `gaming' embrace a far wider range of activities than those based on pure chance."33 Finally, Judge Stapleton noted that the same legislature that finalized amending Article II, Section 17 "contemplated that some lottery games would be related to or based on sporting events."34 We agree with and adopt Judge Stapleton's conclusion that "[g]iven the near contemporaneous approval of the lottery amendment and the lottery statute," we should defer to the legislature's interpretation of the term "lottery."

Therefore, we conclude that Article II, Section 17 of the Delaware Constitution authorizes "not only games of pure chance but also games in which chance is the dominant determining factor."35

We Adopt Judge Stapleton's Factual Findings Concerning Parlay Lotteries

In your initial request for our opinions, you described three potential sports lottery games:

Because it is for the Lottery Director to decide the actual structure of the sports lottery's games, we have the benefit of only the above broad descriptions. Because Judge Stapleton addressed these lottery variations after trial and on a complete record, to that extent we adopt, and are able to rely on, his factual findings in arriving at our opinions.

To address the constitutionality of the three specific games comprising Delaware's Scoreboard lottery, Judge Stapleton required six days of evidentiary hearings, presentation of expert testimony, and extensive briefing.36 Judge Stapleton described those three games, all based on regularly scheduled NFL games, as follows:

Judge Stapleton determined that in each of those games, chance is the predominate factor. He noted that the outcome of all NFL games involves an element of chance, citing "the weather, the health and mood of the players and the condition of the playing field."38 Because the three Scoreboard games required players to select the winners of multiple games, "the element of chance that enters each game is multiplied by a minimum of three and a maximum of fourteen games."39 Judge Stapleton also determined that "[Touchdown II's] designated point spread or `line' is designed to equalize the odds on the two teams involved" and "injects a further factor of chance."40 He found it noteworthy that "[n]one of the games permits head-to-head or single game betting."41 Despite counsel's stipulation of facts before us, we must emphasize that wide areas of disagreement exist between studies, and internal inconsistencies within studies, addressing single game betting and the issue of whether chance or skill predominates.

Under Judge Stapleton's view of the Scoreboard games, all would be considered parlay lotteries. Because we can and do rely on Judge Stapleton's factual findings, we agree with his conclusion that chance is the dominant factor in parlay lotteries, which require players to select the winners of two or more games.42

That said, because we lack the benefit of actual evidence concerning single game bets and the extent to which "the line" introduces chance and causes it to predominate over skill or merely manages the money flow, we cannot opine on the constitutionality of single game bets.

CONCLUSION

Recognizing the difficulties that you and the General Assembly face in presenting a balanced budget for fiscal year 2010, we have attempted to answer your questions to the fullest extent possible. In our opinion, the sports lottery, as defined by H.S. No. 1 to H.B. 100, satisfies the State control requirement of Article II, Section 17 and does not impermissibly delegate legislative authority to the Lottery Director.43 We further conclude that the Delaware Constitution allows lotteries to involve an element of skill, but only where chance predominates. Without specific details of the exact nature of an interplay of sports betting options, however, all that we can currently opine is that the Lottery Director's designed games must assure that chance is the predominant factor.