There was a particularly curious aspect — at the conclusion of an even more curious court ruling — resulting from the lawsuit filed by five major sports leagues against Monmouth Park’s effort to launch Las Vegas-style sports betting at the New Jersey racetrack in 2014.
And that aspect, Florida State University sports law professor Ryan Rodenberg wrote in an 11-page essay published by the Journal of Legal Aspects of Sport last week, may cause legal headaches for years to come.
On Oct. 24, 2014, U.S. District Court Judge Michael Shipp issued a temporary restraining order (TRO) against the New Jersey Thoroughbred Horsemen’s Association, which runs Monmouth Park, to prevent any sports betting while Shipp deliberated on a permanent ruling about its legality.
Shipp somehow concluded that the NFL, NCAA, NBA, NHL, and MLB would suffer “irreparable harm” if a single Jersey Shore racetrack was permitted for a period of up to 30 days to offer the same gambling that dozens of Las Vegas casinos have offered for more than a half-century.
The proliferation of sports betting now in more than half of U.S. states allowing for such gambling — after a U.S. Supreme Court ruling in 2018 allowed for such an expansion — has not, in fact, resulted in any discernible damage to any of the sports organizations.
The 2014 hearing took place with Shipp and a few media members present in a Trenton courthouse, and with attorneys for the plaintiff sports organizations and all relevant parties participating via teleconference.
After Shipp’s order, Ron Riccio — an attorney for the horsemen — commented to the judge, “I was unclear whether the scope of your injunction is limited to the plaintiffs’ games, and not other sporting contests that the plaintiffs have no interest in.”
Shipp replied, “Well, right now the only — the scope is limited to the application that’s been before the court, which is limited to plaintiffs’ games.”
Riccio said: “That was the clarification I was seeking. Thank you, your honor.”
Reversal of fortune
The last comment by Shipp was significant, because it would have allowed the New Jersey horsemen to offer bets on sports such as professional golf, tennis, soccer, boxing, mixed martial arts, and motorsports like NASCAR and Grand Prix racing.
But a few hours after the comment, Shipp produced an addendum to his order “upon further consideration” of Riccio’s question.
And just like that, the TRO was broadened to further prohibit betting “on one or more competitive games in which amateur and professional athletes participate.”
Meaning, Monmouth Park visitors would not have the chance to bet on any sports at all.
“By allowing standing-less plaintiffs to obtain an overbroad injunction against a sitting state governor, the decision represents a dubious vehicle for generating lasting precedent on anti-commandeering grounds,” Rodenberg wrote, referring to the top court’s eventual ruling against PASPA’s requirement that states do the federal government’s bidding in preventing sports betting.
The Professional and Amateur Sports Protection Act of 1992, which New Jersey’s sports betting law sought to counter, had many questionable legal aspects — so much so that the U.S. Department of Justice itself had found it “particularly troubling” that the bill would deputize sports leagues to file a lawsuit independent of governmental action.
U.S. Sen. Chuck Grassley of Iowa noted at the time, “The Federal Government has never authorized private parties to enforce such restrictions against the States. This legislation would do so.”
The concerns of the DOJ and Grassley were validated by the May 14, 2018, Supreme Court ruling. But Rodenberg’s point is that the court, in overturning PASPA, didn’t go far enough.
Leagues were granted broad power
It’s noteworthy that the five sports organizations did not ask for relief beyond their own games. Rodenberg points to a motion earlier in 2012 which read in part: “If New Jersey had singled out the World Series for state-sponsored gambling, then only Major League Baseball could sue.”
In 2013, a plaintiffs’ brief explained, “It’s not like the NFL can bring a claim about NBA, gambling on NBA. It’s very specific to their legal entitlement to protect their [own] product.”
And in 2017, a Department of Justice brief in the case declared that PASPA only “authorizes sports leagues to seek injunctions against violations involving their games.”
But the “across-the-board injunction” by Shipp, Rodenberg asserts, means, “The Plaintiff Leagues and other sports organizations will now likely point to the ruling as a de facto grant of a sports betting property right.”
Rodenberg calls it “a twisted irony” that the leagues spent six years in court battling to maintain PASPA — even though the lawmakers who passed it specifically noted, in a 1991 Senate report, that the leagues “are clearly prohibited under this bill from instituting their own sports betting scheme.”
Yet, since the fall of PASPA, numerous sports franchises have obtained their own sports betting licenses.
What should have happened?
Rodenberg writes: “The Supreme Court should have followed a simpler non-constitutional track and addressed the defect early on, instead of allowing it to fester and persist.
“But the Supreme Court ignored the optimal path, and sports betting legalization in the United States is left with the wreckage. … Both the Supreme Court and appellate court had years to cure the defect.”
The result, Rodenberg projects, is, “If one sports league — or a quintet like in the Supreme Court sports betting case — does not like a new state law, the league will likely claim a property interest over sports betting and seek to block the state statute.”
Rodenberg concludes, “The real winners of the Supreme Court sports betting case are the five sports league plaintiffs … that ‘lost’ the case.”
That’s because the court ruling “disposed of a constraint that PASPA had long held over the heads of revenue-motivated sports leagues” by preventing them from benefiting financially from sports wagering.
Rodenberg predicts the result may well be that the leagues “will soon emerge as full-blown direct competitors bent on putting licensed sportsbook operators out of business.”
