The case of the New Jersey Thoroughbred Horsemen’s Association (NJ THA) versus major American sports leagues hit another wall this month. The Supreme Court of the United States (SCOTUS) denied the leagues’ request to hear their arguments against the THA’s $150 million lawsuit.
In a complicated legal matter dating back to 2014, the decision by SCOTUS not to hear the case wasn’t exactly a win for the nonprofit racing organization. It merely means that it remains in the US District Court, wherein the New Jersey THA must show provable – not speculative – damages from the years of horse racing betting prohibited by the leagues before the Supreme Court ruling for New Jersey in 2018.
The Third Circuit Court did rule in the THA’s favor, but the damages decision remains pending.
A win is a win for the THA in that the Supreme Court denied the sports organizations’ appeal. But the burden remains on the THA to determine those damages.
Original PASPA Lawsuit
The situation began in 2012 but came into focus in 2014 with a filing in the US District Court for the District of New Jersey. A group of professional sports leagues sued New Jersey entities for declaratory and injunctive relief for gambling at casinos and racetracks.
The plaintiffs were:
- NCAA (National Collegiate Athletic Association)
- NBA (National Basketball Association)
- NFL (National Football League)
- NHL (National Hockey League)
- MLB (Office of the Commissioner of Baseball for Major League Baseball)
And the defendants were:
- Chris Christie (New Jersey Governor)
- David Rebuck (NJ Division of Gaming Enforcement Director)
- Frank Zanzuccki (NJ Racing Commission Executive Director)
- NJ THA (NJ Thoroughbred Horsemen’s Association)
- NJ SEA (NJ Sports and Exposition Authority)
The leagues challenged New Jersey for gambling on amateur and professional sports at state-licensed casinos and racetracks, violating federal law. That law was PASPA, the Professional and Amateur Sports Protection Act.
In 2017, the US Supreme Court heard oral arguments on the case that had worked its way through the court system. New Jersey long opposed the idea that Nevada offered sports betting when New Jersey was unable to do so. New Jersey lawmakers legalized sports betting on their own, with the governor’s approval. The entire battle had consequences for sports betting and states’ rights on a broad level.
In May 2018, the Supreme Court ruled that PASPA was unconstitutional. New Jersey won.
NJ THA Not Amused
The New Jersey Thoroughbred Horsemen’s Association was grateful for the ruling but upset that the leagues had the audacity to bring the case in the first place. The leagues had been profiting from sports betting, so the entire lawsuit, especially the temporary restraining order against gambling at casinos and racetracks, had been in bad faith.
The NJ THA wanted damages…with interest.
They wanted a $3.4 million bond, which the leagues posted in 2014 to secure losses at Monmouth Park Racetrack, losses anticipated during the time the restraining order against sports betting was in effect. They also wanted compensation for the lack of sports betting operations from 2014 through the May 2018 PASPA ruling, which amounted to $150 million.
The attorney for the NJ THA argued that the leagues “used what we now known as an unconstitutional statute.” Ronald Ricco continued, “And it almost put Monmouth Park out of business.”
The New Jersey nonprofit lost in the US District Court but then took their official complaint to the US Court of Appeals for the Third Circuit. That court ruled in favor of the THA in September 2019, determining that they were owed damages, and directed that the original court work to determine the appropriate amount.
Meanwhile, the leagues appealed the Third Circuit ruling to the SCOTUS, and as mentioned in the introduction to this article, that effort failed.
Next Steps and More Complications
Prior to the SCOTUS distraction, NJ THA attorneys had been requesting discovery from the leagues, evidence that would help prove damages. As one example, they wanted to see unredacted depositions from sports league executives who claimed “irreparable harm” nearly a decade ago. Those depositions may hold the key to damage amounts as attorneys claim that the leagues knew exactly how much their actions cost Monmouth Park.
The leagues oppose releasing those depositions, as they may contain “proprietary research” regarding Americans’ attitudes about sports betting.
The NJ THA would rather obtain a summary judgment for the $3.4 million bond and interest. As for other damages, like the $150 million, the NJ THA wants a jury to decide that amount.
Dennis Drazin of Monmouth Park believes the bond should be awarded in a quick ruling. The rest is the most complicated matter and may drag on for years to come.