A group of appellate judges has reversed a district court decision from New Jersey that absolved the US pro and amateur sports leagues of blame in stonewalling legal sports betting in the state.
The new ruling from the Third Circuit Court of Appeals empowers a group representing the NJ horse racing industry to pursue monetary damages, possibly exceeding $100 million.
The NCAA is not saying silent as they filed an appeal on Oct. 8.
Where this NJ sports betting case came from
The case came in the wake of the 2018 US Supreme Court ruling (Murphy vs. NCAA) that the federal ban on sports betting — the Professional and Amateur Sports Protection Act (PASPA) — was unconstitutional.
In turn, the NJ Thoroughbred Horsemen’s Association (NJTHA) asked for damages from the NCAA and the leagues, who for years fought to keep the federal ban in place and stop NJ sports betting from moving forward. (Monmouth Park is among the facilities conducting authorized sports wagering in the state.)
Here was the argument from the NJTHA in the original complaint:
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.
The Third Circuit in deciding the appeal minced few words in determining that the NJTHA should receive damages:
Although this appeal concerns NJTHA’s ability to recover on the bond, that is only the last shoe to drop in a lengthy saga that involves other overarching issues, including the constitutionality of PASPA, its interaction with New Jersey’s attempts to legalize sports gambling, and the several opinions of the District Court, this Court, and the Supreme Court in the two actions litigating these issues among the same parties. Thus, a thorough review of the unique procedural history underlying this dispute is warranted.
Here’s the full text of the decision: NJTHA Appeal. The decision was 2-1 in favor of the NJTHA, with a dissent included with the court ruling.
How much money will the leagues lose?
The amount being sought was originally $150 million, but the appellate court did not say how much should be awarded. Circuit Court Judge Marjorie Rendell penned the majority opinion on Monday, sending it back to the district court and Judge Michael Shipp.
“Shipp will presumably now be tasked with determining how much money the NCAA, NFL, NHL, MLB and NBA will have to pay the New Jersey Thoroughbred Horsemen’s Association for being wrongfully enjoined during the duration of the legal case,” said Ryan Rodenberg, an associate professor at Florida State University.
“Upon remand, the Third Circuit’s new ruling could also result in some of the still-sealed court files being released.”
The NJTHA sought two amounts: $3.4 million from a bond posted as a security in the original PASPA case and nearly $150 million in damages. The latter is how much Monmouth Park estimated it lost as a result of not being able to offer sports betting while Murphy vs. NCAA (originally Christie vs. NCAA) was going on. Again from the original complaint:
For example, lost estimated sportsbook win that Monmouth Park could have had during the period October 26, 2014 – May 14, 2018 is $149,977,173. This sum does not include other damages Monmouth Park has suffered as the result of having been prevented from accepting sports bets.
Monmouth Park has generated around $27 million in revenue since New Jersey sports betting launched in June of last year. That is just for year one without a mature market for online sports betting.
So the estimate, at this point, might be a bit high but not entirely out of line.