"We continue to believe this is an opportunity to create jobs and generate revenue to help us keep teachers in the classroom, police on the street, and maintain other core commitments of state government."

The NFL declined to comment.

Delaware had been counting on sports betting to generate about $53 million a year to help plug a nearly $800 million budget deficit.

The state's three casinos had hoped to offer single-game wagering - the most lucrative type of sports gambling and only currently offered in Las Vegas - before last week's court decision.

A three-judge panel of the U.S. Court of Appeals for the Third Circuit declared Aug. 24 that Delaware's sports betting plan, which included single-game bets and wagering on a variety of professional and collegiate sports, violated a 1992 federal ban on sports gambling - known as the Professional and Amateur Sports Protection Act, or PASPA. Nevada, Montana and Oregon also had exemptions under the statute.

In the written opinion, handed down yesterday, the three-judge panel interpreted language that exempted Delaware from the 1992 federal ban as precluding any type of betting beyond what it had offered in a failed NFL lottery in 1976.

That lottery lasted only four months and had disappointing revenue results, grossing just $725,000 that year. The state kept 30 percent, or $217,500.

"Under federal law, Delaware may, however, institute multi-game [parlay] betting on at least three NFL games, because such betting is consistent with the scheme to the extent it was conducted in 1976," Third Circuit Court of Appeals Judge Thomas Hardiman wrote in the opinion.

Hardiman added: "Expanding the very manner in which Delaware conducts gambling activities to new sports or to new forms of gambling - namely, single-game betting - beyond the extent of what Delaware conducted in 1976 would engender the very ills that PASPA sought to combat."

Markell said the state's attorneys were reviewing the written opinion and discussing its legal options. Delaware could still appeal the ruling to the entire appeals court or petition the U.S. Supreme Court within the next two weeks.

The NFL, NBA, NHL, Major League Baseball, and the NCAA sued Delaware on July 24, on grounds it violated the federal ban on sports betting by offering single game wagering.

"We are pleased the court came to this decision and affirmed our position that Delaware's betting scheme violated federal law," NCAA spokesman Bob Williams said yesterday.

Meanwhile, the three Delaware casinos that invested millions of dollars to build new sports books to accommodate sports betting in preparation for the start of the NFL season next Thursday, said yesterday the new areas would now be used for both horse racing and parlay betting.

"I'm disappointed," said Patti Key, chief executive officer of Harrington Raceway and Casino in Harrington, Del. "It puts us at a loss in operations because most of sports betting revenue would have come from crossover play into slots.

"It attracts the traffic, the younger-aged crowd coming in vs. your typical slots player, which is a female in her late 50s," she said. "With less people, we will not have that level of play, and we are in a loss mode or situation."

Bill Fasy, CEO of Delaware Park in Stanton, said his casino was moving forward with parlay wagering to start there Sept. 10, but acknowledged, it would "be tough to break even and [parlay betting] would only be seasonal."

Ed Suitor, CEO at Dover Downs Hotel & Casino, said two bets would have been doable, but that a three-bet minimum per wager was a very tough sell.

"The further you get away from one bet, the worse it gets in terms of popularity for sports betting customers," he said. "The more things that have to occur in order to win a bet, the less attractive it is for the sports bettor."

Max Williams, 58, of Newark Del., a regular at Delaware Park, agreed. He said he was willing to give parlay betting a try, although it was not as appealing to him.

"It's more complicated to me," said Williams, a hospital service assistant, who was at Delaware Park yesterday betting on the horses as usual. "It doesn't really seem like it gives you a fair shot in my mind . . . but I'll try it."