Sports Leagues Double Down On Old Arguments For New Judge In $150M Lawsuit

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Just a few days after the judge who presided over eight years of the New Jersey sports betting saga and its sequel was replaced, the NFL and four other sports organizations submitted almost 200 pages worth of filings on Monday.

The arguments are familiar ones to those who since 2018 have been following the $150 million lawsuit filed by the state Thoroughbred Horsemen’s Association (NJTHA) against those organizations.

But for incoming Judge Freda L. Wolfson, the leagues seem determined to underscore repeatedly any of their favorite assertions and quibble with most of the horsemen’s case.

For instance, the 156 “Statements of Undisputed Facts” submitted by the horsemen in April is described in the new filing as “unduly burdensome, and harassing” and “simply intended to burden the Sports Organizations.”

The leagues replied “Not Disputed” with no caveat only 21 times, while extensively disputing at least as many — and adding disclaimers and qualifiers to quite a few others.

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No big money — and not much small money — say leagues

The leagues continue to insist that they don’t owe any damages for a period from late 2014 until mid-2018, when the courts had prevented the horsemen from operating sports betting at Monmouth Park. At the same time, even a $3.4 million bond for a four-week period in 2014 when previous Judge Michael Shipp was weighing whether to turn a temporary restraining order (TRO) into a permanent one is in dispute.

“NJTHA’s request — which lacks any legal support — is premised on the repeatedly rejected argument that the Sports Organizations hypocritically challenged New Jersey’s legalization of sports wagering, while at the same time purportedly encouraging and benefiting from sports wagering,” attorneys for the sports leagues told the court.

“NJTHA further requests, contrary to all authority, that it be summarily awarded the full bond amount without having to prove its actual damages during the 28-day TRO period. NJTHA’s arguments are frivolous and should be rejected as a matter of law.”

The horsemen had sought a summary judgment awarding the $3.4 million bond. But the leagues pointed out that even when a Third Circuit Court of Appeals remanded the case back to the U.S. District Court last fall, it did so with the instruction that “NJTHA will have the burden of showing provable damages.”

Meanwhile, the estimates of lost revenues by the horsemen in 2014 “would have fallen far short of even the modest revenues generated by the June 2018 launch, let along [the horsemen’s]pie-in-the-sky projections.”

Checking the leagues’ math

Monmouth Park’s revenue for July 2018 — the first full month of sports betting — was just $856,280 for 30 days, far short of the $3.4 million four-week bond posted in late 2014.

But in November 2018 — more of an apples-to-apples comparison given how many major sports were in action — the track took in nearly $2.7 million in sports betting revenue.

Also, the expectation in 2014 was that Monmouth Park’s only rivals for sports betting dollars would be the state’s two other racetracks and the Atlantic City casinos. By the time the legislature passed a new bill in mid-2018, mobile sports betting had joined the mix. And as it turns out, in most months 85 to 90 percent of the total revenues came from mobile wagering.

Those facts help the horsemen’s cause regarding the bond. But the big prize is the 3½-year period before Gov. Phil Murphy placed the first (losing) bet on Germany to win soccer’s World Cup.

The leagues call that $147 million supplemental request “not only unsupported, but unprecedented.”

Did a judge pave the way for the horsemen?

Third Circuit Court Judge Marjorie Rendell, however, seemed to have opened that door in her ruling in September.

Writing for a 2-1 majority, Rendell concluded that because the Supreme Court found in 2018 that the Professional and Amateur Sports Protection Act was invalid, that meant the horsemen were unfairly treated for all that time.

“The entire concept of ‘wrongfully enjoined’ envisions a look back from the ultimate conclusion of the case: Should the enjoined party have been permitted to do what it was prevented from doing?” Rendell wrote. “Thus, whether a party was wrongfully enjoined depends upon the final judgment on the merits.

“Did it turn out that NJTHA had the right all along to do what they were enjoined from doing? There is no way that the answer to that question could be ‘no.’”

The horsemen are making the case that the damage figures are legitimate because the leagues — even as the original case labored forward from 2012 — were allowing games to be played in Las Vegas and London (where sports betting is legal) and to become partners with daily fantasy sports companies.

Too many bites at the apple?

But the leagues assert that the horsemen have no right to push the “hypocritical” angle because their organization “has litigated — and lost — that very issue at least five times. … NJTHA cannot come back now for a sixth bite of the apple.”

The 2012 depositions of top executives from the NCAA and four pro sports leagues were alike in the fervent claim that allowing a Jersey Shore racetrack to offer Las Vegas-style sports betting for four weeks in 2014 would cause them “irreparable harm.”

That seems implausible, but both Shipp and a pair of Third Circuit panels agreed with the leagues numerous times on this point.

Of course, there was no claimed harm by the leagues due to rapid expansion of sports betting in the past two years. Instead, the leagues pivoted quickly after the Supreme Court ruling to find willing gambling company partners.

On Tuesday, in fact, the Denver Broncos of the NFL — the most gunshy of the leagues when it comes to sports betting — announced a deal to make FanDuel its official sports betting partner.

But if Judge Wolfson agrees that the horsemen already have tried and lost on the “bad faith/fraud/unclean hands/hypocrisy” front, none of it may matter.

Parting shots

A number of attorneys have been battling on the sports betting saga and its horsemen-related sequel since 2012, and a certain fatigue now creeps into the filing.

Dennis Drazin, the advisor to the thoroughbred horsemen, gets a mention as an “advisor” with quote marks in one the filings, for some reason.

And Chris Grove, the gaming expert hired by Monmouth Park to estimate the amount of damages the horsemen should seek, is merely a “purported expert” in the filings.

I fared a little better in the leagues’ objection to Statement 101 by the leagues (out of 156).

The leagues object to a citation by a rival website report on Jan. 8, 2o15 “that in turn purports to quote from a transcript of a television show provided by John Brennan at Meadowlands Matters.

“Accordingly, the statement is inadmissible hearsay, and even if the quotation was accurate, Plaintiffs are not aware of the context of the statements.”

(The show was CNBC’s Squawkbox, and I transcribed it from my DVR word-for-word and in context. But nice to see a plug for my blog Meadowlands Matters, which ran from 2010-2017.)

Photo by Andrey Popov / 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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