The new year could bring a resolution in a legal action that seeks millions of dollars from the major pro sports leagues and the NCAA stemming from their opposition to legalized sports betting in New Jersey in 2014.
A federal judge’s ruling this month rejected an attempt by the New Jersey Thoroughbred Horsemen’s Association to recover more than $100 million in damages from the NBA, NFL, NHL, MLB and the NCAA after Monmouth Park Racetrack was prevented from offering sports betting for more than three years before the U.S. Supreme Court legalized it in 2018.
Still at stake, however, is more than $3 million the leagues put up in the form of a default bond when they successfully sought a temporary restraining order against the track in the fall of 2014.
The case stems from the early days in the battle over sports betting in New Jersey, which voters had approved a few years earlier and the state legislature passed into law. That was despite a 1992 federal law prohibiting it everywhere but in Nevada and three other states given limited carve-outs.
In October 2014, a federal judge issued a temporary restraining order stopping Monmouth Park’s plans to open a sports betting parlor, siding with the leagues’ argument that allowing the track to begin accepting bets would cause irreparable harm to their brand and the integrity of their games.
The leagues put up a $3.4 million bond, intended to secure losses the track might suffer during the month that the restraining order was in effect. When the order expired in November 2014, the judge voided New Jersey’s sports betting law on the grounds that it violated the 1992 federal law.
The court battles continued, and the Supreme Court handed a victory to New Jersey in May 2018 when it struck down the 1992 law, paving the way for any state to offer sports gambling.
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NJTHA immediately moved to recover the 2014 bond, and also sought what it estimated at $140 million in damages it incurred because it was not able to offer sports betting from the time the restraining order expired in 2014 until the Supreme Court’s 2018 ruling.
The claim for the additional damages rested on a charge that the leagues acted in bad faith when they sought the 2014 restraining order, in part because they were already promoting and endorsing businesses that made millions from fantasy sports games that relied on individual player performances.
The leagues have called the claim frivolous. In a Dec. 3 opinion, U.S. District Judge Freda Wolfson denied NJTHA’s request for the additional damages and said she would hold a hearing to consider whether the association is entitled to recover the full bond amount for the 28-day period the restraining order was in place.
In court filings, the leagues said they would challenge NJTHA’s calculations of how much potential revenue was lost in that time. A hearing date hadn’t been set.
Messages seeking comment were left with attorneys for the parties.
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