Still No End to NJ Sports Betting Saga as Judge Issues TRO against SB 2460 Implementation

Last Friday, U.S. District Court Judge Michael Shipp, issued a Temporary Restraining Order (TRO) to prohibit Monmouth Park racetrack operator, the Thoroughbred Horsemen’s Association and the New Jersey Sports and Exposition Authority the owner of the land on which Monmouth Park is situated, from carrying on with sports wagering activities at Monmouth Park.

The TRO also directed NJ Governor Chris Christie as well as the State Legislators to refrain from authorizing, licensing, operating, advertising, promoting and sponsoring sports wagering proposals or taking any actions in accordance with the recently enacted Senate Bill 2460. The latter partially repeals a previously enacted state law that prohibits sports betting in New Jersey.

The Judge’s order specifically states that the TRO will remain in effect until the District Court arrives at a resolution of the NCAA and of the major sports leagues’ petition for the issuance of a permanent injunction.

The District Court Judge agreed with the main argument of the sports leagues, namely the Major League Baseball (MLB), the National Basketball Association (NBA), the National Hockey League (NHL), and the National Football League (NFL) and that of the National Collegiate Athletic Association (NCAA). The leagues’ contention is that a federal law allowing the state to lift the sports betting ban entirely must be in place, which Judge Shipp considered as the core issue of the legal proceedings.

He does not agree with NJ’s argument that the new SB 2460 does not violate the 1992 Professional Amateur Sports Protection Act (PASPA) because it merely repeals the existing State prohibition on sports betting, and does not in any way authorize, or endorse sports wagering within its jurisdiction.

The District Court Judge considers the partial lifting of NJ’s previous sports betting prohibition law combined with the imposition of certain conditions such as limiting the offer of sports wagering to specific locations, and of disallowing the participation of minors, as tantamount to regulating sports betting within the state. Inasmuch as it appears that NJ is still in violation of the PASPA law, the judge was inclined to agree with the sports league’s argument that the partial lifting of the ban would cause irreparable harm to the athletic associations.

He also cited “reputational harm” as another basis for issuing the TRO in view of the leagues’ assertion that allowing sports betting will negatively affect relationships with their respective fans, if sports betting on their own sports matches will be allowed. Judge Shipp believes that irreparable harm exists even at an early stage, as there will be increased motivations for “game-rigging” schemes.

He cited SB 2460’s own provision of excluding NJ-hosted collegiate athletic matches or any events involving NJ college teams from any sports wagering transactions as a demonstration of the state’s anticipation for such harms, and therefore contradictory to its claim that the leagues will not be harmed if there will be wagers placed on their games.

As for the potential harms that NJ or Monmouth Park will suffer if the State will not be allowed to pursue their sports betting plans, Judge Shipp asserts that such harms are self-inflicted. The judge’s rational for this is that the Monmouth Park racetrack operators could have just waited for the court to issue its ruling over the validity of NJ SB 2460, before spending substantial amounts in preparing for future sports betting endeavors.

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