Cherry Hill Sportsbook Legal Battle Going Dormant — For Now, Anyway

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With or without prejudice?

That was the last question left for a federal judge in the long-running battle over whether the owner of the Cherry Hill Towne Center mall could open a sportsbook on the site.

The owners threw in the towel in June, stating in a court filing that “the ongoing global pandemic and the concomitant federal, State, and local restrictions have made it nearly impossible for Plaintiffs to open and operate a ‘bricks and mortar’ sports wagering facility for the foreseeable future.”

Judge Renee Bumb also was asked to dismiss the case “without prejudice,” meaning that the owners would be free to resume the court battle at any time.

But in July, former site owner Greenwood Racing and GS Park Racing — who hold a restrictive covenant that appears to give them veto power over sportsbook construction — insisted that the case must be dismissed “with prejudice.”

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That not only would end the dispute for good, but also require the mall owners to pay the former owners’ legal fees.

Cherry Hill Towne Centre filed a countering brief in August.

The judge has spoken

On Tuesday, Bumb, in a six-page ruling, went the “without prejudice” route.

Still, Bumb was sympathetic toward the former site owners.

“This Court’s dismissal order must reflect a balancing of two competing interests: Cherry Hill Towne Center’s right to dismiss its claims, and the prejudice to GSPR that may result from such dismissal.

“Contrary to Cherry Hill Towne Center’s argument, a bare dismissal without prejudice does carry with it the potential for prejudice to GSPR if Cherry Hill Towne Center were to refile this suit in the future.

“As GSPR understandably emphasizes, this Court has held that the restrictive covenant is likely enforceable and in GSPR’s view there is little left to do or say in this litigation. While this Court’s holding, of course, is not a final adjudication of the issue, it nonetheless has value to GSPR.”

A legal win with strings attached

So Bumb added what she called “certain terms” along with the ruling.

Any new filing would have to take place in the same court, and “GSPR should not be required to litigate the new suit as if this Court had never ruled anything as to the enforceability of the restrictive covenant.

“In essence, the case will pick up where it left off when Cherry Hill Towne Center makes its business decision to proceed with building a sports betting facility.”

So while the current mall operators avoid having to pay legal fees to the defendants, they also would find themselves at a legal disadvantage upon any re-filing down the road.

The covenant, which was filed in 1999, states that any subsequent owner is prohibited from offering “horse racing, simulcasting, off-track betting, wagering activities, and gambling of any sort (collectively, “Gaming”) anywhere on the GSP property.”

In Bumb’s 2019 preliminary ruling, she wrote that “the covenant can only mean exactly what it says” and that “sports wagering is a ‘sort’ of wagering.”

Greenwood Racing owns the Parx Casino and Racing property in Bensalem — also part of the greater Philadelphia area — which is only about 15 miles north of the Cherry Hill site. It’s not clear if Greenwood has any interest in trying to make a deal to allow for a Cherry Hill sportsbook that could be seen as a potential competitor.

Why this spot might get a sportsbook someday

The mall location is on the grounds of the former Garden State Park racetrack that closed in 2001.

When state Senator Ray Lesniak sponsored a sports betting bill that became law in 2014, his bill allowed for sportsbooks at all Atlantic City casinos as well as the Meadowlands Racetrack, Monmouth Park, and Freehold Raceway.

But it also allowed for sites of tracks that held races any time in the previous 15 years. That “grandfathered in” Cherry Hill, which Lesniak said he added because of the potential to attract discretionary spending dollars from Pennsylvania into New Jersey.

Only Caesars casino, which was a sister site to adjoining Bally’s when the latter opened its sportsbook in 2019, and Freehold have not launched such gambling operations.

But Freehold — which happens to be 50% owned by Greenwood with the other half owned by Penn National — is expected to finally offer sports betting beginning next week.

The sports betting law also in theory opened the door for a sportsbook at the former Atlantic City Race Course, which held the last of its single-digit number of annual races in 2015.

But Lesniak has called that “an unintended consequence,” and there currently appears to be little to no momentum for such a book at the site, which is actually 15 miles outside of Atlantic City.

The Hamilton Township site is owned by — you guessed it — Greenwood.

Photo by Shutterstock.com

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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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