Racetrack Operator Seeks to Recover $150M in Lost Sports Bets From NCAA, Leagues
In a motion filed in federal court in Trenton, the New Jersey Thoroughbred Horsemen's Association is seeking reimbursement of nearly $150 million in wagers that it says it would have collected during years of litigation waged over the state's desire to legalize sports betting.
May 25, 2018 at 03:24 PM
5 minute read
Almost as soon as their battle against sports wagering ended in defeat at the U.S. Supreme Court, the National Collegiate Athletic Association and four professional sports leagues are facing a claim for gambling revenue that was lost due to the lengthy battle.
In a motion filed in federal court in Trenton, the New Jersey Thoroughbred Horsemen's Association is seeking reimbursement of nearly $150 million in wagers that it says it would have collected during years of litigation waged over the state's desire to legalize sports betting.
The NJTHA filed the motion in National Collegiate Athletic Association v. Murphy, the same case in which the Supreme Court ruled on May 14 that overturned the Professional and Amateur Sports Protection Act, which set restrictions on sports betting.
The NJTHA is the operator of the Monmouth Park racetrack in Oceanport, New Jersey, which is among the racetracks and casinos which had been authorized to accept professional and college sports wagers under a 2012 state law. Monmouth Park has long maintained it was ready to accept sports wagering as soon as it became legal, and it was a defendant in the suit filed against the state by the NCAA and the leagues.
The NJTHA seeks a judgment declaring the NCAA and the leagues acted in bad faith by blocking it from accepting sports wagers at Monmouth Park. The motion also seeks judgment in the amount of a $3.4 million bond posted by the leagues during the litigation, and also asks for accelerated discovery on the amount of the damages sustained by the NJTHA over and above the amount of bond, plus counsel fees and costs of suit.
The NJTHA presented a certification from Chris Grove, a managing director at gambling consultant Eilers & Krejcik Gaming, that Monmouth Park's revenue from sports wagers between Oct. 26 and Nov. 21, 2014, would have been $10.2 million. During that period, Monmouth Park was subject to a temporary restraining order against accepting sports wagers. And from Nov. 21, 2014, to May 14, 2018, while Monmouth Park was under a permanent injunction against accepting sports wagers, Grove estimated that its lost revenue was $139.7 million.
The NJTHA's motion said it is entitled to payment for lost revenue because the league plaintiffs' statements about the potential impact of sports betting were false.
“The leagues' assertions about the 'imperative' need to stop the spread of sports betting can only be seen as a hoax foisted on the Court by the Leagues' top executives and in-house counsel. This hoax supported the issuance of wrongful injunctive relief that nearly put Monmouth Park out of business, seriously hurt Monmouth Park workers, damaged New Jersey's entire horse racing industry, and effectively cleared the field of sports betting competitors,” the NJTHA said in its brief, filed by Ronald Riccio of McElroy, Deutsch, Mulvaney & Carpenter in Morristown, New Jersey.
NFL Commissioner Roger Goodell “falsely swore” in court to the truth of statements about the evils of sports betting, including his statement that “the core entertainment value of fair and honest competition between teams and athletes that is reflected in NFL games will be replaced by the bettor's interest, based not on team or player performance, but on the potential financial impact of each on-the-field event.”
Nonetheless, the NFL, the National Basketball Association, the National Hockey League and Major League Baseball have embraced fantasy wagering, according to the motion. “It is obvious that the NFL does not fear any threat to the integrity of their games even though the public is making bets based on how the NFL's players perform in NFL games,” the NJTHA said in court papers.
The NJTHA said in its brief that two NFL team owners, Jerry Jones of the Dallas Cowboys and Robert Kraft of the New England Patriots, own equity stakes in DraftKings, a fantasy sports business, and the Patriots, Cowboys and the Kansas City Chiefs have opened Draft Kings fantasy sports lounges in their stadiums.
In addition, the NFL and MLB have held games in Great Britain and in Mexico, both of which permit sports betting, the NJTHA said in its brief.
“There's a conflict between what they swore to the court and what they did,” Riccio said in an interview. “We're saying that conflict is bad faith, and on the basis of that we're saying we were enjoined three and a half years ago from doing sports betting,” he said.
The NCAA and the sports leagues filed their suit on Oct. 20, 2014, and U.S. District Judge Michael Shipp entered a permanent injunction barring sports wagering on Nov. 21, 2014. The U.S. Court of Appeals for the Third Circuit affirmed that ruling on Aug. 9, 2016. The Supreme Court granted a petition for certiorari on June 27, 2017, and issued its ruling May 14.
Representatives of the NCAA and the leagues did not respond to requests for comment about the case.
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