Third Circuit to Take Up Issue of Lost Revenue During Battle Over Sports Betting
Monmouth Park's operator has appealed to the Third Circuit after a federal judge denied its bid for reimbursement from a $3.4 million injunction bond of lost gambling revenue during a legal battle over sports betting.
November 21, 2018 at 01:57 PM
3 minute read
Monmouth Park racetrack, Oceanport, NJ. Calstanhope via Wikimedia Commons
The operator of the Monmouth Park racetrack has appealed to the U.S. Court of Appeals for the Third Circuit after a federal judge rejected its claim for lost sports betting revenue during New Jersey's lengthy legal battle over the legality of wagering on college and professional sports.
On Wednesday, the appeals court docketed the petition by the New Jersey Thoroughbred Horsemen's Association, which runs Monmouth Park, in National College Athletic Association v. Christie. That move follows a Nov. 16 ruling by U.S. District Judge Michael Shipp, who denied the track's bid to collect on a $3.4 million injunction bond that was posted by the NCAA and four sports leagues while they were battling the state's effort to legalize sports betting.
The leagues sued over New Jersey's enactment in 2014 of a so-called repealer law, which struck down a statewide ban on wagering on college and professional sports events.
As the court issued an injunction against sports betting, the NCAA, NFL, NBA, NHL and MLB posted the bond in 2014 to protect any party claiming it was wrongfully enjoined. New Jersey won its battle in May when the U.S. Supreme Court overturned the Professional and Amateur Sports Protection Act, which set restrictions on sports betting.
The Thoroughbred Horsemen's Association then sought to collect on the bond, claiming NCAA and the leagues acted in bad faith by blocking it from accepting sports wagers at Monmouth Park.
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, 2014, 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 court papers.
But U.S. District Judge Michael Shipp found that the association was not wrongfully enjoined, and he found good cause to deny its bid for damages under the bond.
Shipp said PASPA was presumed constitutionally valid in 2014. “Thus, the law as it existed in 2014 clearly favored the leagues, and it would be unreasonable for the court to allow NJTHA to recover under the injunction bond in light of the Leagues' correct interpretation that the 2014 Repealer Law authorized sports betting in violation of the governing law at that time,” Shipp wrote.
Ronald Riccio of McElroy, Deutsch, Mulvaney & Carpenter in Morristown, who represents the Thoroughbred Horsemen's Association, declined to comment on the ruling or the appeal.
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