New Jersey horse racing group achieves victory from lawsuit

The New Jersey Thoroughbred Horsemen’s Association (NJTHA) has achieved victory in a long-running legal dispute with the leading US professional sports leagues over sports betting.

The decision, which was made by a three-judge panel of the US Third Circuit Court of Appeals, has cleared the way for the NJTHA to claim damages from the professional sports leagues, although it remains to be seen exactly how much they may be liable to receive.

The judges ruled 2-1 in favour of the NJTHA, which was appealing an earlier US District Court in a ruling that blocked the group from claiming financial damages from the leagues that halted New Jersey’s strong efforts to legalise sports wagering.

2014 saw the National Football League, the National Basketball Association, the National Hockey League, Major League Baseball and the National Collegiate Athletics Association come together to file a suit blocking New Jersey’s proposed launch of sports betting. This came following the state legislature passed regulations to legalise the vertical.

During the time, the leagues sought an injunction against the state, where it was said that New Jersey was violating federal law, citing the Professional and Amateur Sports Protection Act (PASPA). The US Supreme Court then ultimately struck down PASPA last year to then prompt the NJTHA to renew efforts to claim damages from the leagues.

Within oral arguments that filed with the Third Circuit in July of this year, the NJTHA said it could be owed as much as $150m in damages. However the Third Circuit’s ruling in favour of the NJTHA is in reference to a $3.4m bond that the leagues posted as security in the event they came to loose the case.

The NJTHA said the leagues’ use of the law that the Supreme Court later found to be unconstitutional almost put one of the state’s racetracks, Monmouth Park, out of business.

Within the ruling, the Third Circuit panel came to say that as the group had been improperly subjected to a restraining order for 28 days, and that it was wrongfully enjoined under federal rules of procedure. This resulted in the court saying that a federal judge should not have denied its claim for damages.

US Circuit Judges Marjorie Rendell and Theodore McKee ruled in favour of the group, while Judge David Porter dissented.

Judge Rendell said: “PASPA provided the only basis for enjoining NJTHA from conducting sports gambling, and the Supreme Court ultimately held that law is unconstitutional.

“Therefore, NJTHA had a right to conduct sports gambling all along. We conclude that NJTHA was wrongfully enjoined and should be able to call on the bond.”

However in his response, Judge Porter commented: “I disagree that the Supreme Court’s decision holding PASPA unconstitutional necessarily means that the NJTHA was wrongfully enjoined under the PASPA-based [restraining order] issued four years earlier.

“This holding requires indulging the fiction—not available to the District Court that issued the order—that PASPA never existed at all.”

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