Delta Is Putting DraftKings On Flights — But Inflight Gambling Is Still Illegal

Delta Air Lines CEO Ed Bastian announced a partnership with DraftKings at his CES speech in Las Vegas back in January of last year. Bastian actually said that they would DraftKings into their inflight entertainment system.

Since inflight gambling is illegal, it wasn’t clear what this would look like. At the time the partnership was announced, the contract hadn’t actually been signed yet and details of what it would mean hadn’t been fully fleshed out.

It’s taken a year and a half but they’re finally rolling out ‘sports predictions’ without betting, as a way for DraftKings to sign up Delta flyers for their platforms (where they can gamble later). In this way, Delta monetizes gambling without running afoul of the law.

SkyPicks will launch with Major League Baseball contests, with NFL matchups coming later this year. The game is tied to passengers making predictions on real matchups. The game is available through Delta Sync Wi-Fi ​on mobile or ​personal devices, ⁠not seatback screens.

Customers must sign in with a DraftKings account or create one to unlock a set ​of questions about a single game, or a series ​of games. Questions ⁠will include player head-to-head performance and game-winner picks and prizes will be awarded to the top performers in individual contests and monthly leaderboards.

Gambling On U.S. Airlines Is Illegal

Under the Gambling Devices Act of 1962 (also known as the Johnson Act, 15 USC 1171) gambling is illegal on US commercial aircraft. Gambling is legal in airports if it’s legal in the jurisdiction where the airport sits. The Las Vegas airport has generated over $1 billion in gambling revenue.

Las Vegas Airport

Foreign Airlines Used To Offer Inflight Gambling

For 32 years it was legal for foreign airlines flying to and from the U.S. to offer inflight gambling while U.S. carriers couldn’t do it. Some airlines experimented with it.

• In 1981 Singapore Airlines engaged in a two month test offering slot machines on the Singapore – San Francisco route. They proved so popular that the machines in the back of the cabin caused egress and service issues, with too many passengers congregating. The light weight machines that were selected (lighter weight means less fuel burn) weren’t sturdy enough either.

  In fact all seven slot machines broke on their inaugural run. Singapore Airlines revisited the idea in the late 1990s.

• Swiss tried seat-based inflight gambling in the 1990s but ended the option when the crash of Swissair Flight 111 in 1998 was linked to arcing in the wiring of the inflight entertainment system. New systems have been greatly improved over the last 20 years.
  

• Ryanair announced in 2005 that it would offer inflight gambling, with CEO Michael O’Leary going so far as to suggest passengers would eventually fly free with the airline making money off games of chance. The effort never came to fruition.

Foreign Carriers Can’t Offer Gambling On U.S. Flights Now, Either

US-registered cruise ships got the ability to offer gambling with 1991’s United States-Flag Cruise Ship Competitiveness Act.

TWA and Northwest Airlines lobbied for airlines to receive a similar exemption. However the government protected them from an uneven playing field in a different way – the Gorton amendment (49 USC 41311) prohibited gambling not just on US-registered aircraft but on any plane flying to or from the U.S. This may not be legal under US aviation treaties, but it has not been tested. Swiss operated under an exemption to the Gorton amendment.

While the Gorton amendment says that foreign airlines may not “install, transport, or operate, or permit the use of, any gambling device on board an aircraft in foreign air transportation” the FAA has said that it’s permissible for an aircraft flying to the U.S. to have an installed gambling device as long as it is deactivated for the flight.

Inflight Gambling Almost Was Legalized In The Mid-’90s

The Department of Transportation studied inflight gambling in 1996, largely concluding it was fine, but stopping short of recommending legalizing the practice. The Clinton Administration at the time was proposing a national study on the effects of gambling and DOT held off from pre-empting this.

Delta Could Earn Billions If The Law Changed

In 1996, DOT concluded that airlines could earn $1 million per aircraft per year by offering gambling, $1.6 million in 2020 dollars or $1.3 billion per year for an 800 plane airline. (Airlines have argued that the potential economic impact is even greater than this.) Delta’s fleet is nearly 1,000 aircraft.

So What’s Delta Doing Here?

I predicted they’d offer inflight gaming without monetary bets, selling access to Delta customers, so that DraftKings can build its client base that will then gamble with real money on the ground. That was close. The gaming is limited to sports, which are highly popular as an entry point.

I think the smarter play for another airline might be to partner with a prediction market like Kalshi, which sells futures contracts (sports betting) but is regulated by the Commodity Futures Trading Commission and isn’t gambling under federal law. Of course, the law is whatever an airline’s regulator says that it is so they’d have to convince DOT this was desirable or suffer consequences in adjacent space.

I’m actually surprised we haven’t seen a renewed lobbying effort to legalize inflight gambling, because there’s simply so much money at stake – stakes that airlines are currently leaving on the table.