Garden State Park Sports Betting Case Judge Wants Parties To Show Their Cards

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New Jerseyans with an interest in gambling presumably know that a 2014 state law allows sports betting at the state’s racetracks and Atlantic City casinos.

So far eight of the nine casinos have sportsbooks (Caesars does not, but its sister property Bally’s has a 15,000-square-foot book next door), and the Meadowlands Racetrack and Monmouth Park also offer sports betting. Freehold Raceway officials have talked about landing a partner for its site, but nothing has happened there yet.

There’s a Jersey twist to the law, however, allowing sports betting at any former racetrack that held races anytime after 1999. That “grandfathers in” the site of the former Garden State Park racetrack in Cherry Hill. And that twist is no coincidence.

As former state Sen. Ray Lesniak has told NJ Online Gambling, he sponsored the bill including that language because of the revenue potential at the site.

Keeping Jersey money in Jersey?

The ideal scenario for New Jersey would have been no legal sports betting in Pennsylvania — including Philadelphia, which is about 10 miles northwest of Cherry Hill.

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But by the time the U.S. Supreme Court struck down Congress’s 26-year-old Professional and Amateur Sports Protection Act in May 2018, Pennsylvania had already approved sports betting pending that ruling.

Without legal sports betting in their own state, Pennsylvanians, as happened with Atlantic City casinos from 1978-2005, would have crossed the border to place legal sports bets in New Jersey. In fact, many of them did just that for the several months during which New Jersey sportsbooks were open and PA books were not.

But now, New Jersey no doubt is seeing some of its residents’ discretionary income crossing the border into Pennsylvania. For those near the NJ-PA line who prefer brick-and-mortar sports betting to online and mobile wagering, the Philly-area casinos are much closer than any New Jersey location. That would change if a sportsbook opens in Cherry Hill — but as with everything in the New Jersey sports betting saga, it’s complicated.

Courtroom drama

Last week, U.S. District Court Judge Renee Bumb informed plaintiff Cherry Hill Towne Center Partners and defendants G.S. Park Racing and Greenwood Racing that “it appears to the Court that important questions have been left unaddressed by the parties.”

Cherry Hill Towne Center’s owners insist that as owners of the former track site, they have every right, and every intention, to build a sportsbook there. That is disputed by the track’s former owners, who cite a 1999 “restrictive covenant” that bars a variety of gambling from being operated at the site by anyone but them.

Bumb, in her three-page letter, wants the developers to explain what licenses they would require, whether they have applied, what is that status, and if this covenant complication was explained in any application.

The judge then notes that if the developers have not yet received the necessary licenses, “Is this case ripe for adjudication?”

The two sides have about 30 days to file their briefs, at which point Bumb will decide whether to move ahead to oral argument.

Who has the upper hand? The covenant bars “horse racing, simulcasting, off-track betting, wagering activities and gambling and gaming of any sort (collectively, ‘Gaming’) anywhere on the GSP Property” by anyone other than the former track owners.

But the developers say that if the covenant was intended to prevent sports betting at the site, “they could have and should have expressly done so.”

The NJ lawmakers’ intent

In a further effort that may or may not be legally relevant, the developers note that state lawmakers clearly sought for sports betting to be offered at the Cherry Hill site. Therefore, they write, if the covenant is enforced by the court, “Residents of South Jersey will be deprived of of a convenient location in New Jersey to wager on professional or collegiate sporting events, and the State will be deprived of a location at which to collect tax revenue … a poorly drafted restrictive covenant cannot stand in the way of the State’s desire to permit sports wagering at casinos and horse racetracks.”

One other Jersey twist: The 2014 law’s wording also would allow for a sportsbook at the site of the defunct Atlantic City Race Course, which is actually about 15 miles from that iconic city, in Hamilton Township. But there has been no indication that a sportsbook will ever sprout up there.

That track’s limited schedule was ceased in 2015 by Greenwood Racing, one of the defendants in the Cherry Hill case and part-owner of Freehold Raceway. Greenwood owns Parx Casino and the South Philadelphia Turf Club as well, leading the Cherry Hill developers to claim the “defendants want to create their own sports wagering monopoly in the greater Philadelphia area, including parts of New Jersey.”

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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