Sports Leagues Push Back Against Monmouth Park Lawsuit

Posted on July 18, 2018 - Last Updated on August 6, 2018

Back in May, Monmouth Park Racetrack, acting through the New Jersey Thoroughbred Horsemen’s Association (NJTHA), filed suit against the major sports leagues and NCAA, seeking restitution for lost sports betting revenue.

Now, the leagues are pushing back against the claim.

How did a Monmouth Park lawsuit happen?

In 2012, then-Gov. Chris Christie signed a bill to allow sports betting at NJ casinos and racetracks.

Two years later, Monmouth Park attempted to blast ahead under the law. The leagues filed suit seeking injunctive relief.

US District Judge Michael Shipp issued a temporary restraining order to bar the track from accepting wagers until the lawsuit’s resolution. He also mandated that the leagues post a bond to compensate Monmouth Park for the lost revenue. The $3.4 million bond covered the period from the ruling to the hearing, which amounted to roughly four weeks.

The lawsuit did not resolve until May 14, 2018, and the restraining order remained in place during the entire period.

From the bond amount, Monmouth Park extrapolated that its loss during the period was in the hundreds of millions of dollars. So, the track filed suit asking for $150 million in damages.

The leagues’ response

On July 16, the NBA, NFL, MLB, NHL, and NCAA filed a brief in New Jersey District Court to oppose the suit. The brief contains four main points:

  • The leagues’ liability for the bond ended when the district court affirmed PASPA’s legality.
    • Essentially, the leagues claim that the decision on Nov. 21, 2014 represented final judgment on the matter.
  • The claims that leagues acted in bad faith are without merit.
    • In its suit, NJTHA alleged that the leagues’ ownership positions in DFS sites FanDuel and DraftKings meant that the leagues had engaged in sports betting themselves.
    • Further, the leagues had held sporting events in locales with legal sports betting, suggesting that the leagues had no problem with wagers on their events.
  • The NJTHA cannot claim that it was damaged when nobody thought the suit would win and PASPA would fall.
    • Roughly speaking, the leagues shouldn’t have to pay for losing when everyone, including the court, thought that they would win.
  • The amount of damages should be limited to the amount of the original bond.
    • Regardless of the merits of the suit, the leagues claim any damages beyond the original $3.4 million are conjecture.

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

You can read the entire document as filed here.

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We’re just getting started

The brief represents the second step in what will surely be a multi-year dance. Even if the case comes to a resolution in the near-future, the loser is certain to appeal.

Both sides have difficult points to argue. On the one hand, the leagues are going to struggle to show that the November 2014 ruling was the final one when the lawsuit progressed (quite publicly) to the US Supreme Court.

On the other hand, NJTHA is going to have a terrible time proving damages beyond the bond. Although it’s based on input from industry experts, the $150 million number is somewhat subjective.

As with many lawsuits, the only winners right now are the fee-gathering lawyers. Hopefully, both parties will resolve the issue fairly in the near future.

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Bart Shirley

Bart Shirley is a writer and poker player from Houston, Texas. When he's not teaching high school math and business, Bart writes about the NJ online casino industry and US online poker. He has a master's degree in business administration from Texas Christian University and a degree in English from Texas A&M.

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