Groups Lobby for Damages Tied to Bygone Gambling Ban

PHILADELPHIA (CN) — Over a year after the Supreme Court struck down a federal law that barred sports gambling in most states, a New Jersey horse racing group told the Third Circuit on Tuesday that it is entitled to damages to the tune of $150 million.

“They had a right to it all along,” said Ronald Riccio, of the firm McElroy Deutsch, arguing this morning for the New Jersey Thoroughbred Horsemen’s Association.  

Santa Anita Park is a thoroughbred horse-racing track in Arcadia, California. (Photo by MARTIN MACIAS JR./Courthouse News Service)

Back in 2014, after New Jersey had used state law to avoid the gambling ban put in place by the federal Professional and Amateur Sports Protection Act, a federal judge kept the status quo in place.

As the horse-racing group noted in its appellate brief, however, leagues like the NCAA and others used deception to secure their injunction.

“At the same time as the leagues were seeking injunctive relief they were investing in and profiting from the spread of sports gambling,” the brief states. “NJTHA provided uncontroverted evidence of the Leagues’ double dealing. The district court repeatedly ignored the evidence that the leagues procured injunctive relief against NJTHA in bad faith.”

Though the court had the leagues put a bond in place should they lose — a fund of $3.4 million meant to represent possible damages — the NJTHA was denied any claim to the bond last year after prevailing in its challenge before the Supreme Court.

Riccio told the Third Circuit on Tuesday that his clients deserve the bond money. 

“For six years the leagues used what we now know as an unconstitutional statute,” Riccio said. “And it almost put Monmouth Park [Racetrack] out of business.”  

U.S. Circuit Judge Theodore McKee lightened the mood at arguments when Riccio asserted that the leagues’ wealth offers a basis for the requested damages figure of $150 million.

“The NFL does have a lot of money,” McKee said. “A lot of my money as a matter of fact.”

Riccio noted as well that the unconstitutional reliance on PASPA hurt businesses and employees alike. 

“People lived for six years under fear of losing their livelihood,” Riccio said.

During opposing arguments by Jeffrey Mishkin, an attorney for the leagues with the Haug law firm, U.S. Circuit Judge Midge Rendell pointed out that NJTHA was restrained from what is now legal sports betting at the racetrack. 

“They were wrongfully prevented from doing what they should have been allowed to do because the Supreme Court ruled it [PASPA] was unconstitutional,” said Judge Rendell. 

Mishkin agreed, but noted that NJTHA should only be entitled to damages that occurred over the span of the 28-day injunction. 

U.S. Circuit Judge David Porter rounded out the panel.

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