The Secret Files In The New Jersey Sports Betting Saga: Why The Suppression Is Unlikely To Last

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It is tantalizing to imagine heavily redacted depositions by various pro sports league executives taken in 2012 finally being released in full to the public.

What in those filings in the original lawsuit by the leagues — in what was an eventually futile attempt to stop New Jersey, and by extension, other states, from allowing sports betting — was so sensitive that a federal judge has kept that material private for all these years?

Also mostly hidden to this point: a number of research papers by the leagues that claim to prove how harmful to them ending Nevada’s de facto sports betting monopoly would be (although in 2019, that case appears exceedingly difficult to make), and an analysis by an expert hired by New Jersey defendants to respond to the leagues’ claims.

The New Jersey horsemen — who are seeking $150 million in damages from the leagues — have not yet repeated a 2018 request to the courts for the potentially illuminating documents, Florida State sports law professor Ryan Rodenberg writes in a paper recently published in the Penn State University Law Review. But because the depositions could prove crucial to the horsemen’s effort to recoup losses from being prevented from offering sports betting at their Monmouth Park racetrack from 2014-18, Rodenberg concludes that another motion by the horsemen to unseal those files is “likely.”

Intriguingly, Rodenberg also finds that if for some reason the case is settled — or the horsemen somehow decided not to seek those files — there is legal precedent to believe that a federal court would release them anyway should a third party intervene in the case.

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From sealed to unsealed?

But why would a court agree to unseal long-restricted documents? Rodenberg — who discussed sports betting legalization in an an appearance on 60 Minutes earlier this year — offers a series of legal precedents showing that numerous federal courts as well as the Supreme Court have repeatedly leaned heavily on the side of public disclosure.

In fact, in the original sports betting case, there was an October 2012 telephone conference held by U.S. Magistrate Judge Lois Goodman with attorneys for all parties to the case. Goodman stated, according to a transcript of the call cited by Rodenberg, “Let’s be clear” that “there is a high burden placed on the parties to put something under seal, and when you file a motion for leave to seal something, while the document stays under seal until the motion is decided, there is no guarantee that that motion will be granted …

“I really don’t like the idea of things being put under seal that don’t need to be under seal. It clutters the record, it creates confusion, and, frankly, it flies in the face of the public’s right to know what’s in their pleadings if they’re not — if they don’t contain confidential information.”

Yet a month later, the New Jersey Attorney General’s office — representing chief defendant Gov. Chris Christie (the horsemen were formal intervenors in the case) — sought to redact all or part of numerous documents on its side of the case.

The five sports organizations then filed a brief supporting the state’s redaction efforts, while adding an even more voluminous set of documents to be considered for redaction.

Daniel Spillane, an attorney for the NBA, noted that some its documents “have not even been disclosed to the other [leagues]in the case” for competitive reasons. Disclosure of such documents would “cause serious injury to the NBA” should the competitive advantage of exclusive awareness of the league’s research on sports betting be made available, Spillane said.

The battleground ahead

Rodenberg, again citing numerous precedents, writes that “there would be a strong argument in favor of unsealing, at a minimum, the various documents Judge [Michael] Shipp specifically cited in 2012” when he ruled that the leagues had standing to sue the state.

In a likely foreshadowing of the arguments by the horsemen as they continue to seek revelation of the depositions, Rodenberg points out that Shipp made a ruling based on secret documents — seemingly most clearly opening the door for publication of those depositions. The horsemen already filed a motion for “completely unredacted transcripts” in May 2018, and their lawsuit continues.

That’s because in September 2019, a Third Circuit Court of Appeals panel kicked the case back to Shipp, and in so doing, informed the horsemen that they would “have the burden of showing provable damages” and demonstrating that “the Leagues’ assertion that sports gambling would harm them was false.”

No better way to prove the case, perhaps, than to comb through those depositions and research papers.

Meanwhile, in a presumable foreshadowing of the leagues’ response, Rodenberg explains that “no Supreme Court ruling has directly addressed whether the First Amendment grants a right to access court documents in civil litigation, like the New Jersey sports betting case.”

Shipp has repeatedly accepted legal arguments by the leagues, only to be overturned by higher courts. Will he side with them again? And if so, might this be his rationale?

Rodenberg not only has a mountain of precedent on the side of the public’s right to know, he cites two cases specific to the Third Circuit, one of which concludes that the right of public access to judicial records is “a right that is well-established in this Circuit.”

Finally, Rodenberg writes that an unsealing of the report by Princeton University Prof. Robert Willig could resolve for good a longstanding dispute. Shipp referenced a segment of the report in 2012 in writing that a likely total increase in sports betting with broader legalization — as Willig found was likely — was evidence that allowing New Jersey to move forward would harm the leagues.

But Willig has said that his report ultimately concluded that the new gamblers mainly would be casual players, and that not only would that result do no harm to the leagues, a shift by gamblers from illegal markets would actually benefit them.

Rodenberg concludes that the unsealing of the documents — whether due to motions by the horsemen, or by a third party — “would reveal the grounding, if any, for how the five sports league plaintiffs convinced Judge Shipp that such leagues were injured and irreparably harmed by legalized sports betting in New Jersey and beyond.

“Such a revelation also would assist in the determination of whether the Supreme Court sports betting case was a pecuniary [financial]ruse by one or more of the plaintiffs.”

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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