Leagues Respond To NJ Sports Betting Lawsuit: We Don’t Owe Anything

The brief filed with the US District Court of New Jersey opposes NJTHA’s claim of $150M in damages owed and outlines four reasons why the NJ sports betting lawsuit “must be denied.”

Earlier this summer, the New Jersey Thoroughbred Horsemen’s Association (NJTHA) filed a lawsuit claiming the major sports leagues and the NCAA “wrongfully” blocked Monmouth Park from taking sports bets.

The leagues are saying not so fast.

On Monday, the NCAA, NFL, NBA, MLB, and NHL filed a brief with the US District Court of New Jersey opposing NJTHA’s claim that they are owed $150 million.

The brief contains four key points discrediting NJTHA’s attempt at seeking damages. But the 24-page document boils down to this one line:

“NJTHA is not entitled to recover anything from the injunction bond, and its motion should be denied.”

Looking back: NJTHA seeks reparations

Not long after the US Supreme Court overturned the Professional and Amateur Sports Protection Act (PAPSA), the NJTHA filed a claim in federal court.

The owners of Monmouth Park asked US District Court Judge Michael Shipp to sanction the leagues for acting in bad faith.

The court filing says:

“The commissioners falsely described to this court in meticulous detail the catastrophic consequences they swore would follow from the spread of sports betting. None of this was close to being true.

“Behind this court’s back, each commissioner’s league and team owners made huge profits from the spread of sports betting, both on the outcome of their games and their players’ performances in their games.”

The filing also requests an evidentiary hearing to assess the total damages accrued from Oct. 26, 2014 – May 18, 2018. The dates represent the period sports betting was illegal under a temporary restraining order (TRO) issued while New Jersey was challenging PASPA and before SCOTUS issued its first ruling.

The action seeks the payment of a $3.4 million bond posted by the leagues. The bond was to cover damages during a four-week period when the TRO was in effect. Additionally, the NJTHA seeks $139 million in damages for lost revenue from November 2014 – May 2018.

Toward the end of May, attorneys for the leagues filed a response to the claim. It said the assertions by NJTHA were “meritless, if not frivolous.” The leagues were given until July 16 to file a formal response.

The four key points in the league’s response

The leagues waited until the last day to file its formal response to the action. It outlines four reasons the NJTHA is not eligible to recover damages from the bond or other damages it seeks.

First, the liability under the bond expired when the court upheld PASPA in November 2014.

“To the extent that NJTHA seeks damages for the period after November 21, 2014, when the TRO expired and this Court entered final judgment in the case, NJTHA’s motion must be denied.”

Second, the attempt by the NJTHA to expand its damages claim outside of the amount of the bond is meritless. The NJTHA claims the leagues acted in bad faith by making a profit of sports betting behind the Court’s back. The facts, according to the leagues, do not support the assertion.

“When it issued the TRO, this Court was fully aware that some of the Leagues participated in fantasy sports, held sporting events … where sports betting is legal, had not (according to NJTHA) curbed the proliferation of sports pools on championships like March Madness, and/or recognized that sports betting may eventually be more broadly legalized.”

Third, the Third Circuit issued the TRO based on the assumption the leagues were likely to prevail, and PASPA would remain the law. Its eventual ruling upheld PASPA, which negates the claim that the NJTHA was wrongfully prevented from offering sports betting.

“NJTHA cannot establish as a matter of law that it was ‘wrongfully enjoined,’ a predicate for any recovery at all against the bond.”

Finally, should NJTHA prevail, damages should be limited to the amount of the bond during the time of the TRO.

“The law is clear that the entry of a bond merely sets the ceiling for a wrongfully enjoined party’s total recovery (including any interest).”

It’s a long way from over

Judging by the initial war of words and Monday’s response, the lawsuit by the NJTHA is just getting started.

The claim for damages gets complicated by several courts upholding the constitutionality of PASPA before the US Supreme Court issued its decision.

Additionally, the amount of damages the NJTHA seeks is an estimate at best. There is no factual basis to support that revenues for NJ sports betting would be as high as claimed.

Of course, when a decision is finally handed down, it is likely to be appealed by the losing party. Evidentiary hearings and the appeal process could drag this battle out for years.

With NJ Sports Betting Bill Unsigned, Monmouth Park Gets Another Delay Of Game

The NJ sports betting bill is in the hands of Gov. Phil Murphy, but he says he won’t sign it until he’s reviewed it. For Monmouth Park, this means another day of waiting for its William Hill sportsbook.

Monmouth Park has been ready to roll out sports betting for six years or so. The New Jersey racetrack had to put plans on hold during a yearslong US Supreme Court battle involving New Jersey and the sports leagues.

When the high court struck down the Professional and Amateur Sports Protection Act (PASPA) last month, it opened the door for legalized sports betting in New Jersey.

Yet with NJ sports betting legislation still unsigned by Gov. Phil Murphy, Monmouth must now wait longer before diving into the industry.

Murphy emphasizes no sports betting yet

On Thursday, legislation was unanimously passed by the New Jersey Assembly and Senate.

It was then passed on to Murphy, who has yet to sign the bill. Until he does so, sports betting still doesn’t have a green light in the Garden State.

The problem is the NJ properties and their sportsbooks have been eager to get into the sports betting game. Specifically, Monmouth had targeted this weekend for its debut of a $2.5 million sportsbook. The sportsbook is headed by British bookmaker William Hill.

Murphy, though, has told Monmouth Park president and CEO Dennis Drazin that the racetrack’s plans will have to be suspended. And they will continue to be shelved until Murphy has had an opportunity to review the legislation.

“We’re not going to sit on it, but we just got it,” Murphy said in a press conference. “We’re going to have sports betting sooner (rather) than later in New Jersey and I’m really excited about that. I’m not going to change my stripes just because it’s a big weekend. We’ve got to make sure we do what we do right.”

NJ sports betting bill in limbo?

Murphy’s actions have come as something of a surprise.

Immediately following the SCOTUS ruling to strike down PASPA, Murphy in a statement said he was “thrilled to see the Supreme Court finally side with New Jersey and strike down the arbitrary ban on sports betting imposed by Congress decades ago.”

He was eager to enact a law “authorizing and regulating sports betting in the very near future.”

In turn, racetracks and Atlantic City casinos were anticipating a quick turnaround of rules and regulations to make the state the first outside of Nevada to offer single-game wagering.

Nearly a month after the high court’s ruling, however, NJ is now looking to become the second state after Delaware rolled out legalized sports betting earlier this week.

Politico reported on Monday that Murphy may be using his signature as leverage during budget negotiations with the NJ Legislature. Others, however, believe Murphy has not put pen to paper because of amplified pressure on passing the bill. He wants to take his time and, as noted above, “make sure we do what we do right.”

Monmouth still waiting to turn things around

The 72-year-old racetrack has ridden a steady decline over the past few years. Most of Monmouth Park’s revenue since being leased from the state in 2012 has been generated by wagers. As a result, the track has had to spend its own money on race purses, which themselves have dropped in value.

For several years, Monmouth Park has sought alternative revenue streams to stay afloat. Then, SCOTUS cleared the path for NJ sports betting. An opportunity arose, and Drazin leaped at it. The racetrack partnered with William Hill and began plans to open a sportsbook lounge.

Drazin had aimed to have the book open by Friday, in time for Game 4 of the NBA Finals, the MLB Subway Series between the New York Yankees and Mets and for the Belmont Stakes.

Once again, Monmouth’s wait will continue. The track cannot accept wagers until Murphy signs the bill. If it does, the New Jersey Racing Commission would have those bets reviewed, which could delay the licensing process even further.

“I’m trying to get open as soon as I can,” Drazin said, “But at the end of the day I have a responsibility to Monmouth Park and the state and the local community. If I do something that causes Monmouth Park to get delayed in opening, then that doesn’t help anybody, so I have to respect the process.”

NJ Sports Betting Lawsuit Against The Leagues Sparks A War Of Words

The recent NJTHA lawsuit seeking $150M from the sports leagues for their part in preventing legal NJ sports betting at Monmouth Park is just one fallout from the Supreme Court’s May 14 sports betting decision.

New Jersey won the sports betting battle. But the New Jersey Thoroughbred Horsemen’s Association is on the warpath.

The organization, representing NJ racetrack Monmouth Park, filed suit in US District Court last week.

The lawsuit goes after the sports leagues that attempted to prevent the legalization of sports betting before the US Supreme Court ruled in favor of New Jersey on May 14.

The high court’s decision struck down the Professional and Amateur Sports Protection Act (PASPA) and cleared the way for sports betting across the country.

A look into the NJTHA lawsuit

The NJTHA is claiming nearly $150 million in damages from the yearslong NJ sports betting fight. The organization says Monmouth Park could have started offering sports wagering in 2012 if not for the NCAA, NFL, NBA, NHL and MLB intervening.

The amount claimed in damages, the NJTHA estimates, represents how much Monmouth Park would have earned.

If that $150 million figure is not enough to grab attention, the NJTHA is hurling salt on what could be a sizable wound.

From the filing:

“During the intervening years, the Leagues’ actions nearly put Monmouth Park out of business, inflicted significant financial and emotional hardship on hundreds of innocent Monmouth Park workers, and jeopardized the continued viability of New Jersey’s entire equine industry, including its many horse farms and related open spaces. The Leagues succeeded in blocking Monmouth Park from conducting sports betting by relying on what the Supreme Court decided is an unconstitutional statute and by submitting ten false sworn statements.”

NJTHA: Leagues acted in ‘bad faith’

The horsemen’s association is not pulling any punches in its suit.

According to the court filing, the NJTHA alleges that the sports leagues were “actively fueling and profiting from the rapid expansion of sports betting” while trying to put a stop to New Jersey’s efforts.

“Behind this Court’s back, the Leagues have aggressively promoted and facilitated the spread of betting on both the outcome of the Leagues’ games as well as the statistical performances, via fantasy wagering, of the Leagues’ own players in the Leagues’ own games.”

By no means was that the end of the association’s claims:

“It is the epitome of bad faith for the Leagues in-house counsel to certify in a Verified Complaint, and for the Commissioners to falsely swear before this Court, that if sports betting is allowed to spread it would be disastrous for the Leagues, while at the same time outside this Court the Leagues and some of its team owners have hypocritically facilitated the spread of sports betting.”

And then this little tidbit about integrity fees:

“Most recently, despite a repudiation by a clear majority of the Supreme Court of all of the Leagues’ legal arguments, they have had the audacity to lobby the State of New Jersey to enact a law that would compel Monmouth Park to share with the Leagues its sports betting revenues, as well as the sports betting revenues of others. The Leagues have the nerve to call this bid for a share of sports betting revenues an “integrity fee.” The Leagues’ conduct is shameless. Their hypocrisy has no limits.”

Leagues not going down easy

Representing the leagues, attorney Jeffrey Mishkin has asked for bifurcation, which is basically a preliminary ruling to see if the NJTHA even has a case.

Essentially, the leagues believe that the accusations of the NJTHA are “meritless, if not frivolous.”

The NJTHA has requested the hearing be accelerated. But if the case does come to fruition, Mishkin requests more time for the leagues to respond.

Ronald Riccio, representing the NJTHA, has not objected to allowing more time for the leagues to prepare a full response to the motion.

That said, Riccio insists “there is no basis” for bifurcation.

“In essence, what the Leagues want to do is pick and choose which parts of the NJTHA’s Motion it wishes to respond to at this time. Allowing a party responding to a motion to control how, when, and to what parts of a motion it chooses to respond is not contemplated by Local Rule 7.1(d)(2), nor does it, as the Leagues suggest, promote efficiency.”

In any case, while the fight for legal sports betting in New Jersey is over and state lawmakers prepare to debate and pass regulatory bills this week, this fight may continue long after the first bets are taken in the Garden State.

Monmouth Park Says It’s Ready To Take State’s First Legal Sports Bet By Memorial Day

Monmouth Park CEO Dennis Drazin has targeted May 28 as the day the NJ racetrack’s William Hill Sports Bar can take the state’s first legal sports bet, but that might be wishful thinking.

Editor’s note: This article was updated from its original version.

Could legal sports betting launch in New Jersey by Memorial Day?

Monmouth Park CEO Dennis Drazin certainly hopes so and has targeted May 28 as the day the Oceanport track’s William Hill Sports Bar can be converted back into a sportsbook and take the state’s first legal sports bet.

On Monday, the US Supreme Court released its heavily anticipated decision in the state’s sports betting case. In a 6-3 vote, the court deemed the Professional and Amateur Sports Protection Act (PASPA) unconstitutional and upheld a 2014 New Jersey law allowing sports betting in Atlantic City casinos and racetracks across the state.

PASPA is the law that prohibited sports gambling everywhere except Nevada, and limited sports betting in Delaware, Montana, and Oregon.

The decision opens the door to legal sports gambling across the country. A handful of states have already passed sports betting legislation anticipating a decision in New Jersey’s favor. Of course, New Jersey is expected to get there first, but just how fast it can is still a question.

The William Hill Sports Bar at Monmouth Park

Back in 2014, Monmouth Park built a sportsbook-style lounge on the property.

The $3 million partnership between the track and British bookmaker William Hill was supposed to be the first place in New Jersey to take legal sports bets.

However, major sports leagues across the country took the state to court to have the NJ sports betting law struck down. The state appealed, but until now, could not find a court to rule in its favor.

The sportsbook was converted into a sports bar and has been running as such ever since.

Drazin held a press conference following the Supreme Court decision to say Monmouth Park is ready to convert the space back into a sportsbook and start taking bets almost immediately:

“It’s my intention, unless somebody stops us, to be up and running in two weeks. If the Legislature or the governor says ‘slow down,’ I’m gonna listen to them. We’re trying.”

Let’s not forget NJ sports betting regulations

Gov. Phil Murphy and other state lawmakers may want Monmouth Park to hold off until they can set up sports betting regulations in the Garden State.

At least one bill containing sports betting regulations is currently before the NJ Senate, having been introduced Monday.

It would ensure:

  • Only casinos, racetracks, and former racetracks would be able to open sportsbooks.
  • Gamblers must be 21 or older.
  • No bets are placed on college sports played in the state or on college teams based in the state.

On Wednesday, however, NJ.com reported that the bill from state Senate President Stephen Sweeney also comes with a warning to Atlantic City casinos and racetracks in the state: “Anyone who opens a sports betting operation before the state puts regulations in place will be barred from accepting future bets on games.”

This puts a damper on Monmouth Park’s eagerness to get ahead of the pack.

Another bill with slightly different regulations stands before the Assembly. A more realistic date for getting a bill with the same regulations passed by both the Assembly and Senate and signed by Gov. Murphy would be the end of June.

“We’re moving quickly with legislation,” Sweeney told NJ.com. “I’m hopeful we should be ready by early June. Everyone should respect the legislative process rather than jumping out.”

Drazin said in an interview that he had not heard of such a provision in the bill but he wouldn’t challenge it either.

“I have not spoken to the Senate president yet,” Drazin said. “But I have said all along and I have said to the Senate president that I would go along with the legislative process. So I would comply.”

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Weeks, not months

For its part, William Hill US Operations CEO Joe Asher told NJ.com Memorial Day is likely pushing it:

“I won’t give a date to anybody right now. I’m comfortable saying as soon as responsibly possible. But clearly we’re thinking in the realm of weeks. We’ll see how many that turns out to be.”

Going forward, another $2 million is expected to be spent expanding the William Hill Sports Bar at Monmouth Park into a full-fledged Las Vegas-style sportsbook.

And while Drazin has every reason to want to give Monmouth Park a financial boost from legal sports betting, Sweeney and NJ legislators are just asking for patience:

“We fought for this for seven years. I’m anxious to get started just like everyone else.”