The Battle Of Cherry Hill Sports Betting: Surrender Terms Not Accepted

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Two years into its legal battle to open a sportsbook at the site of a former New Jersey racetrack in the Philadelphia suburb of Cherry Hill, the strip mall operator of that site recently surrendered.

Nevertheless, this Battle for Cherry Hill may be far from over.

Cherry Hill Towne Partners, which runs the mall that replaced the Garden State Park racetrack, informed a federal judge earlier this month that “since the filing of this action, the world has changed — and so too has the gaming industry.

“On June 23, 2020, Plaintiff filed a letter with the Court seeking to dismiss this action. Plaintiff stated that, as a result of the ongoing global pandemic and the concomitant governmental restrictions, it no longer makes sense from a business perspective to open a ‘bricks and mortar’ sports wagering facility, at least for the foreseeable future.

“Plaintiff concluded it was in the best interest of the parties to end this litigation before additional expenses are incurred.”

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Sounds easy enough — except that Towne Partners sought to have the case dismissed “without prejudice,” and without incurring legal costs that must otherwise be paid to attorneys for defendants GS Park Racing and Greenwood Racing.

“On June 29, 2020, defendants filed their opposition to that request, noting that plaintiff’s requested dismissal without prejudice and without costs should not be granted: doing so rewards plaintiff for prosecuting an obviously insubstantial case that it now seeks to dismiss on a whim, and it is prejudicial and basely unfair to defendants,” wrote an attorney for the former track operators.

No charge for former track operators?

GS Park Racing instead seeks a summary judgment in its favor that clarifies that the plaintiff must pay all legal costs.

One of its arguments is that the strip mall operators “may seek to open a sports wagering facility at some point in the future, and Plaintiff now simply wants to ‘kick the can down the road.’

“The pandemic has impacted us all, but it has not impacted the facts or law germane to this case. Alleged discovery issues and settlement discussions neither excuse plaintiff’s failure to file a timely opposition brief, nor support plaintiff’s request for dismissal without prejudice.”

Last week, Cherry Hill Towne Center attorneys struck back.

As a matter of law, they said, “It does not much matter whether [Plaintiff’s] reasons for wanting to dismiss [its]complaint are good ones.”

The possibility of a later refiling of a bid to operate a sportsbook “does not constitute substantial prejudice as a matter of law,” Towne Center attorneys asserted.

The mall operator has been working on shaky grounds since September, when federal judge Renee Bumb concluded that the former owners of the site “will likely prevail on its position that the Restrictive Covenant is enforceable.”

The covenant

The “covenant” is a 20-year-old piece of a real estate deal at the one-time Garden State Park racetrack that prohibits subsequent owners from offering “horse racing, simulcasting, off-track betting, wagering activities, and gambling of any sort (collectively, “Gaming”) anywhere on the GSP property.”

The argument by Cherry Hill Towne Center was that there is no specific mention of sports betting in that language, and that an “any sort” clause must be deemed “overly broad.”

But Bumb pointed out that the covenant does not bar the operation of a sportsbook at the site — it only bars one that does not have the approval of GS Park Racing and Greenwood Racing.

So if Towne Center wants to operate such a book, now or in the future, it must do so with the (unlikely) imprimatur of the former site operators.

The idea of a sportsbook in the Philadelphia suburbs is a decade-old idea from the mind of former state Senator Ray Lesniak, a founding father of the New Jersey sports betting legislation that, thanks to a favorable U.S. Supreme Court ruling in 2018, has spawned a multi-billion-dollar national industry.

Greenwood Racing is a 50% owner of Freehold Raceway in New Jersey as well as owner of the Parx Casino and Racing property near Philadelphia. As it stands, it appears as if it will have its own say as to whether Lesniak’s vision ever becomes a reality.

And with even the opposing party in this lawsuit throwing in the towel for now, such an effort doesn’t appear likely to occur anytime soon.

Sportsbooks currently are up and running at eight Atlantic City casinos, with the exception of Caesars. The Meadowlands Racetrack and Monmouth Park also feature sportsbooks, while Freehold does not — but it may soon have a Barstool Sports-themed sportsbook.

State law also allows for a sportsbook to be operated in Atlantic County at the site of the former Atlantic City Race Course, but no efforts so far appear to be in play at the Mays Landing location.

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John Brennan

John Brennan has covered NJ and NY sports business and gaming since 2002 and was a Pulitzer Prize Finalist in 2008, while reporting for The Bergen County Record.

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