Half of NBA suit against lottery dismissed


PORTLAND, Ore. -- A federal judge Friday threw out more than half of the NBA's lawsuit seeking to block the Oregon Lottery from taking bets on league games, but ordered a trial on the rest of the claims.

In a decision that both sides hailed as a victory, U.S. District Judge Malcolm Marsh threw out 12 of the 21 damage claims offered by the NBA, which is trying to stop a lottery game called 'Sports Action' that involves betting on professional football and basketball.


Marsh tossed out allegations that Sports Action violates the OregonConstitution and breaks anti-gambling laws, thereby amounting to racketeering.

But the judge left intact claims that the lottery is infringing on the NBA's trademark, and he rejected the lottery's argument that the suit belonged in state, rather than federal, court.

The Oregon Department of Justice, which represents the lottery, had asked Marsh to dismiss the entire suit. G-Tech, a Rhode Island-based computer company that runs the game for the lottery, is a co-defendant in the suit and had also asked for dismissal.

'I think they lost much more than we did in this because 12 of their claims are out the window immediately and they have to fight for the other ones,' said Phil Lemman, a spokesman for the Department of Justice.


But Gary Bettman, NBA senior vice president and general counsel, said most of the trademark allegations were left intact by Marsh's ruling.

'We are very pleased that the court has recognized the legal validity of virtually all of our property claims and has also confirmed our rights to have this case heard in federal court,' Bettman said. 'We look forward to having this case tried promptly.'

The lottery gained national attention last fall when it started Sports Action as a way to raise money for sports programs at Oregon's state-owned colleges and universities. The game originally involved betting on NFL games, but was later expanded to include basketball.

Both the NFL and the NBA strongly oppose Sports Action, although the NFL has taken no legal action against the state.

Marsh tossed out allegations that Sports Action:

-- Violates the Oregon Constitution because it is a game of skill, not a true lottery. He ruled the NBA has no legal standing to make such an assertion.

-- Amounts to a pattern of racketeering because it violates state and federal anti-gambling laws. Marsh said the laws exempt lotteries.

-- Is a 'misappropriation' of NBA property and violates a federal constitutional guarantee that 'private property (shall not) be taken for public use without just compensation.'


However, Marsh left intact NBA allegations that the lottery game infringes on the league's trademarks and tarnishes its reputation. He also let stand a claim that the lottery is making an unjust profit off NBA property.

A trial will determine if the remaining claims are true.

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