Sports Leagues Seeking Settlement With NJ Horsemen, Documents Show

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A flurry of court documents made public on Wednesday revealed that the NFL and four other sports organizations have expressed interest in settling a $150 million lawsuit by New Jersey’s thoroughbred horsemen.

At the same time, attorneys for the leagues seek a delay in efforts by the horsemen to discover any new information because of an imminent filing they say will be sent to the U.S. Supreme Court.

The stakes are high in a case that dates back to 2014, when a federal judge issued an injunction that prevented Monmouth Park and the horsemen who own the racetrack from offering sports betting in spite of a just-enacted state law that permitted it.

While the leagues won the initial legal round, in September a three-judge U.S. Third Circuit Court of Appeals — in a 2-1 ruling — vacated that decision while finding that the leagues had been “wrongfully enjoined” from taking sports bets at the track.

The NFL — along with its counterparts in baseball, basketball, and hockey, as well as the NCAA — had been required in 2014 to post a $3.4 million bond to cover estimated damages over a four-week period while U.S. District Court Judge Michael Shipp reviewed the case. Shipp ultimately sided with the leagues, rendering the bond moot until last fall.

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While the leagues now dispute the amount of the bond that are owed to the horsemen, the much larger argument is whether damages should extend all the way until May 14, 2018 — when the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992.

Voiding of PASPA set the stage

With PASPA no longer valid, any state could join Nevada in offering sports betting. A month later, Monmouth Park was taking “action.”

Just 10 days after that ruling, the horsemen filed this suit that effectively is a sequel to the leagues vs. New Jersey/horsemen battle that extended from 2012-2018.

With the horsemen scrambling to stay afloat — even with a $10 million subsidy now provided annually by the state and with an influx of cash from sports betting profits — and with the deep pockets of the leagues, a settlement has long seemed likely.

And sure enough, in a December 30, 2019 letter from horsemen attorney Ron Riccio to leagues attorney Jeffrey Mishkin, Riccio wrote: “I informed you that we intended to serve discovery requests but would wait if the Leagues were interested in continuing settlement discussions that you initiated.”

Even more intriguingly, in a filing to Shipp and to U.S. Magistrate Judge Lois Goodman — who is now overseeing the case — Riccio wrote of a Jan. 6 email: “I reiterated that when the Leagues’ counsel raised with me the possibility of a settlement I told [Mishkin] that I thought this case should be settled. That continues to be my view. I am also willing to discuss mediation as an alternative to continued litigation.”

Riccio added that “To date, the leagues have not responded … ”

Still, just the possibility of a settlement is tantalizing news for the state’s horse racing industry. Even half of the proposed $150 million — and minus possibly hefty legal fees  would be a major financial infusion for a sport that a decade ago seemed on the verge of a shutdown when Governor Chris Christie elected to take the state out of the horse racing business.

Leagues have a Plan B if no settlement

Meanwhile, in a filing dated Tuesday — the same day that state regulators posted data that showed that nearly $4.6 billion was legally wagered on sports in New Jersey in 2019 — Mishkin sought a stay on the proceedings from Shipp and Goodman “pending a forthcoming petition … in the U.S. Supreme Court that could moot the Requests.

“A determination by the Supreme Court that [the horsemen]were not ‘wrongfully enjoined’ would fully and finally dispose of the pending Bond Motion,” Mishkin added.

It’s a longshot that the Supreme Court would take this case — but then again, that also seemed true with the NCAA v Christie II sports betting saga, and look what happened.

So the horsemen run at least a modest risk of being left with nothing if there is no settlement.

Photo courtesy of 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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