The 7th Circuit Court of Appeals has decided it needs some assistance from the Indiana Supreme Court to decide whether the National Collegiate Athletic Association’s ticket-distribution system constitutes a lottery under Indiana law.
In July, the 7th Circuit split in reversing the District Court’s dismissal of claims against the NCAA and Ticketmaster that the defendants’ ticket-distribution scheme constituted a lottery in violation of Indiana law. The plaintiffs, who didn’t receive tickets under the distribution system, filed the lawsuit. They claimed the NCAA’s policy of keeping a $6 handling fee per application for tickets –whether someone received tickets or not - was an illegal lottery.
The NCAA petitioned for a rehearing, but instead of granting it, the judges asked the Supreme Court to answer three certified questions regarding Indiana law.
“We do note that the question of whether this ticket-distribution system constitutes a lottery under Indiana law is a close one, and our holding could have far-reaching effects on sports-ticket-distribution systems utilized by the NCAA and others,” wrote the judges in the per curium opinion, Tom George, et al. v. National Collegiate Athletic Association No. 09-3667.
The three questions are:
1. Do the plaintiffs’ allegations about the NCAA’s method for allocating scarce tickets to championship tournaments describe a lottery that would be unlawful under Indiana law?
2. If the plaintiffs’ allegations describe an unlawful lottery, would the NCAA’s method for allocating tickets fall within the Ind. Code Section 35-45-5-1(d) exception for “bona fide business transactions that are valid under the law of contracts”?
3. If the plaintiffs’ allegations describe an unlawful lottery, do plaintiffs’ allegations show that their claims are subject to an in pari delecto defense as described in Lesher v. Baltimore Football Club, 496 N.E.2d 785, 789-790 (Ind. Ct. App. 1986), and Swain v. Bussell, 10 Ind. 438, 442 (1858)?
The judges vacated their earlier opinion and stayed the appeal while the Supreme Court considers the matter.