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The bus driver thing is common. It is not necessisarily "his" team just because he drives the bus.
I referee and umpire for my own home town frequently and it is not a problem (I don't drive the bus). My kids are not on these teanms.
Officiating if you have a relative on a team (son, daughter, nephew, niece, etc.) is not a good idea, IMO. I feel it is better to avoid this situation for all concerned. The uncle/nephew game you refer to sounds like an annual tradition that is probably agreed upon. I'm sure if it was a playoff or elimination game these would not be the refs.
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