NJ Sports Betting Suit to recoup $3.4 million from Feds?

As 2020 turns into 2021, sports betting in the state of New Jersey is still looking receive it’s just desserts from Federal lawmakers. In the New Year, the New Jersey Thoroughbred Horsemen’s Association (NJTHA) is expected to continue its battle to recoup $3.4 million from the NCAA and “big four” professional sports leagues.

Setting the scene for the Law Suit

The law suit has it’s historic footprints from the early days in the legal fight over sports betting in New Jersey. Voters in the Garden State approved sports wagering for legalization some years earlier and accepting the will of the state’s voters, the state legislature passed sports betting into New Jersey law. However, that was despite a 1992 federal law prohibiting legalized sports wagering everywhere but Nevada and three other states (Montana, Oregon and Delaware) given limited carve-outs under a ‘grand-fathering provision.

Fast forward to October 2014 and a federal court judge issued a temporary restraining order stopping leading New Jersey race track (Monmouth Park) plans to open a land-based sports book, siding with the NCAA and big four (NHL, NBA, NFL and MLB) professional sports leagues’ argument that permitting the track to begin accepting wagers would cause irreversible damage to their respective brands and the integrity of their games.

Regardless, the Monmouth Park race track forged ahead with the construction of a William Hill-branded sportsbook. However, when the sportsbook was set to open in October 2014, the Federal Court judge issued a temporary one-month restraining order that blocked its commencement.

A $3.4 million bond was put up to secure any potential losses the track might possibly suffer during that one-month time frame that the restraining order was in place. Upon the order’s expiration in November 2014, the judge voided New Jersey’s nascent sports betting law on the grounds that it was against the 1992 federal law.

Over the years, the court battles dragged on and on, and eventually, the U.S. Supreme Court handed a legal sports betting pathway to the State of New Jersey in May 2018 when it struck down the 1992 law, opening the gate for any U.S. state to offer legal sports wagering.

Immediately, the NJTHA sought to recover its $3.4 million in 2014 bond money. Additionally, the NJTHA looked at securing what it believed to be an approximate $140 million in incurred damages because it was unable to offer sports wagering from the restraining order expiry in November 2014 until the U.S. Supreme Court’s May 2018 ruling.

The Damages Denied but the Bond Money Still on the Legal Table

After years in the courts, earlier this month, Federal District Court Judge Freda Wolfson turned down the NJTHA’s lawsuit seeking $140 million in damages and denied the payout. However, in delivering a ray of legal hope to the NJTHA, Judge Wolfson has said she will deliberate at a later time whether the body can expect to have the $3.4 million bond posted in October 2014 returned.

“I will hold an evidentiary hearing … to determine the amount of ‘provable damages’ sustained by NJTHA during the 28-day period” Judge Wolfson wrote.

In another note to her ruling, Wolfson put forward the possibility of still considering damages beyond the $3.4 million in the NJTHA bond, if it is eventually determined that the body can build a case for ‘provable damages’ in excess of the bond money during the 28 days of the restraining order back in October-November 2014.

No specific date for Judge Wolfson’s consideration and the hearing has yet been set, but is widely expected to be earmarked for the first quarter of 2021.

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