NJ Horsemen To NFL, Other Sports Leagues: Pay Me My Money Down

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The New Jersey Thoroughbred Horsemen’s Association told a federal court last week that six years after the NFL and four sports organization partners posted a $3.4 million bond, it’s past time for the horsemen to collect — plus interest.

The bond was set aside for a four-week period in 2014 during which a federal judge was deciding if the leagues would face “irreparable harm” from Monmouth Park moving forward with Las Vegas-style sports betting pending a final ruling on the matter.

The case ultimately ended in May 2018, when the U.S. Supreme Court vacated a 26-year-old law passed by Congress that barred almost every state from offering legal sports wagering.

Regarding the six-year lag, horsemen’s attorney Ron Riccio wrote in his motion for immediate summary judgment: “During that same time Monmouth Park struggled to survive economically due to the inability to conduct sports gambling. Some workers lost their jobs.

“While Monmouth Park and its workers were suffering, the Leagues were reaping millions in profits from spreading — indeed, investing in — the very sports gambling that they admit they succeeded in ‘effectively preclud[ing]’ NJTHA from conducting for nearly four years. NJTHA’s preclusion from conducting sports gambling while the Leagues were profiting from spreading sports gambling continued unabated until the Leagues suffered a devastating loss in the Supreme Court on May 14, 2018.”

That assertion reflects the ongoing court battle over whether daily fantasy sports — where customers pay an entry fee to enter a contest in which they choose players from multiple teams based on a salary cap — is equivalent to sports betting.

Riccio said the current economic environment makes the issue even more urgent.

“For more than two years, including the last four months when Monmouth Park has especially suffered due to the current COVID crisis, the Leagues have succeeded in converting a streamlined summary proceeding into protracted and costly litigation. The time has come for the Leagues to be held accountable for their actions.”

$3.4 million is just the appetizer for NJ horsemen

The horsemen seek a trial by jury for a far larger prize: the $150 million they estimate they lost from the end of the bond phase in late 2014 until the first bet was made by New Jersey Gov. Phil Murphy in mid-2018.

“There is no basis for further delay,” Riccio wrote. “Instead, [the leagues]  want more delay. They say that they, not this court, will decide when it is ‘appropriate’ for them to ‘address the accuracy of NJTHA’s damages calculations’ as if they, not this court, control the proceedings in this litigation.”

The leagues’ “sarcastic” criticism of the methodology behind the $150 million estimate is nothing, the horsemen say, but “a potpourri of worthless conjecture, ad hominem attacks, and unsubstantiated statements.”

While the awarding of the $3.4 million bond seems a fait accompli at this point, the hefty damages from 2014-18 are shaping up as the main battle.

“The Leagues pretend that they had nothing to do with NJTHA being precluded from engaging in sports betting at Monmouth Park during the Post-[Temporary Restraining Order] Period — as if they were mere innocent bystanders,” Riccio wrote in a 48-page filing.

“But their own admissions show that the Leagues were the protagonists who singlehandedly succeeded in locking NJTHA out of the sports betting business beginning on October 24, 2014 and ending on May 14, 2018.

“In recent filings, the Leagues have admitted that they were responsible for precluding NJTHA from conducting sports betting at Monmouth Park not only during the four week TRO Period, but for nearly four years.”

The issue of “10 false statements”

At the core of the horsemen’s claims are what they say are “10 false statements” — five “false declarations” and five “false affidavits” — from a series of depositions in 2012 of high-ranking executives of the NFL, NBA, MLB, NHL, and NCAA. Those comments alleged “irreparable harm” from even a temporary expansion of state-authorized sports betting beyond Nevada.

“The Leagues premise their motion to dismiss on a fictional legal distinction that they invented between bad faith that is not actionable and ‘actionable bad faith.’

“According to the Leagues, there are degrees of bad faith – some of which are really bad and, therefore, actionable under the law to support NJTHA’s claim for damages in excess of the bond amount but some of which are not too bad and, therefore, escape the scrutiny of the law. This legal argument has no support and is pure sophistry.”

Meanwhile, just last month the NBA, NHL, and MLB — this time with Major League Soccer and the Canadian Football League replacing the NFL and NCAA — endorsed an amendment to Canada’s federal laws to permit single-game sports betting.

“Sports betting gives fans another exciting way to engage with the sports they love,” the leagues wrote. “Sports betting already happens illegally in Canada; creating a legal framework would shift consumers from illicit, unregulated markets to a legal and safe marketplace.”

Photo by Andy Dean / 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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