NJ Horsemen Win Right to Collect Sports Betting Damages

[Wandering Eyes]

The New Jersey Thoroughbred Horsemen’s Association (NJTHA) won a legal victory in a 5-year-old court case Tuesday when a panel of three federal judges ruled 2-1 that the group, which operates Monmouth Park, is entitled to collect damages from pro sports leagues that tried to block the track’s initial attempts at getting sports betting up and running.

According to the Sept. 24 opinion issued by the United States Court of Appeals (Third Circuit), when the four major U.S. pro sports leagues and one college sports regulatory body (NFL, MLB, NBA, NHL and NCAA) filed a lawsuit and got a temporary restraining order (TRO) in 2014 to keep Monmouth from taking sports bets, those leagues had to post a $3.4 million bond as security in the event that they lost the case.

The leagues’ primary argument, at the time, centered on the plank that Monmouth (and the State of New Jersey) were violating a federal law known as the Professional and Amateur Sports Protection Act (PASPA).

But as that lawsuit crawled through the legal system, in May 2018 the U.S. Supreme Court struck down PASPA, which had prohibited betting in all but a few grandfathered states.

As a result, last summer Monmouth became the first of numerous entities nationwide to start taking legal sports bets. But the 2014 lawsuit continued, and the NJTHA went after the leagues to collect on the bond as damages.

The NJTHA contended that the 2014 TRO had been secured “in bad faith” and had the potential to put Monmouth out of business. In the NJTHA’s opinion, the leagues should be liable for much more than the initial $3.4 million of the bond–as much as $150 million in damages–because of allegedly lost business. Initially, that claim was denied by a federal judge.

The NJTHA appealed, and in Tuesday’s ruling, the Third Circuit panel found that because Monmouth had been unlawfully subjected to the TRO for 28 days, that it was “wrongfully enjoined,” which the ruling defined as when a party “had a right all along to do what is was enjoined from doing.”

The court’s majority opinion states that “Here, PASPA provided the only basis for enjoining NJTHA from conducting sports gambling, and the Supreme Court ultimately held that that law is unconstitutional. Therefore, NJTHA had a right to conduct sports gambling all along. We conclude that NJTHA was wrongfully enjoined and should be able to call on the bond.”

The case isn’t over yet. Now the issue will center on how much money the NJTHA may or may not go after beyond the original $3.4-million bond amount. The horsemen will likely argue, as they have in the past, that they are entitled to far more in damages.

Dennis Drazin, the chairman and chief executive of Darby Development LLC, which operates Monmouth Park, told the Asbury Park Press that the ruling “is what we were looking for. Not only to state our case, but it says we are entitled to damages.

“The circuit court did not address the numbers in excess of the bond, because they didn’t feel that was in front of them,” Drazin continued. “The horsemen will collect some money…. We still have to prove what our actual damages were, so that would require us to show that had we been able to conduct sports betting what the revenues would have been.”

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