Those interested in the New Jersey sports betting legalization saga may already know that the U.S. Supreme Court’s landmark decision in May opened the door for any state to offer the gambling if it chooses to do so.
They also may know that New Jersey then passed a new law clarifying once again that the state’s racetracks (three) and Atlantic City casinos (now there are nine) could open sportsbooks.
But there is a little-noticed exception in the various sports betting laws that New Jersey passed in the last six years – including the most recent one in June. Any former site of a racetrack that operated less than 20 years ago also could be home to a sportsbook.
In the Garden State, there are two spots that qualify: the sites of the former Atlantic City Race Course, and Garden State Park in Cherry Hill.
Here come the lawyers
The latter spot, located close enough to Philadelphia to be considered a suburb, is the subject of a new lawsuit filed by the potential operator of a Cherry Hill sportsbook, namely Cherry Hill Towne Center Partners, LLC.
Like most New Jersey sagas (or the ones I cover, at least), this one has roots that go way back, to 1999, in this case.
That’s when a “Declaration of Restrictive Covenants” was made that said that no gambling of any sort could be offered at the site in question, and “the foregoing Covenant shall remain in effect forever [in bold face], and permanently [more bold face] other than by GS Park Racing.”
Greenwood a major player in NJ, PA gambling
The plot thickens, as GS Park Racing (GSPR) is owned by Greenwood Racing, which happens to be a co-owner of Freehold Raceway, one of the three New Jersey racetracks that can offer sports betting. While the Meadowlands Racetrack and Monmouth Park have already opened their sportsbooks, a Freehold official told NJ Online Gambling last month that its sportsbook wouldn’t quite be ready to go upon opening of football season.
But Freehold isn’t the only gambling property owned by Greenwood. Another is the former Atlantic City Race Course, which is located in Hamilton, about a dozen miles from AC.
More importantly, Greenwood owns Parx Casino and Racing, a racino that formerly was known as Philadelphia Park and happens to be only 15 or 20 miles from the former Garden State Park site.
And if that weren’t already enough, Greenwood also co-owns – with Penn National, its partner at Freehold Raceway – an off-track wagering site in the south Jersey town of Gloucester, less than 10 miles south of Cherry Hill. A Greenwood-owned OTW in Vineland is about 40 miles south of Cherry Hill.
Would a Cherry Hill sportsbook boost Greenwood’s gambling revenue fortunes? GS Park Racing and Greenwood certainly don’t seem to think so. In fact, GS Park Racing is of the mind that a new book could create unwanted competition for its parent company’s nearby and established facilities.
Attorneys for the potential sportsbook site acknowledge the problematic covenant. But they add, “Neither GSPR nor any of its affiliates has any interest in developing an off-track wagering facility at the GSPR property or in the vicinity of the GSPR property. In fact, certain entities have actively resisted developing such a facility.”
Conflict of interest here?
To wit, in 2010 Penn National sued its Freehold Raceway partner Greenwood, seeking to force the development of an OTW on the property. The claim was that Greenwood was simply interested in protecting its Pennsylvania gambling properties at the expense of Penn National’s interest. The suit was eventually settled, terms not disclosed.
The potential sportsbook owners note that “sports wagering was not within the intended scope of the Declaration when it was executed. The restrictive covenant in the Declaration is unreasonable in its duration and scope is against public policy” because there is no “end-date.”
The result, they say, is that preventing sports betting at one of the five current or former racetrack sites would mean it is “thereby frustrating the public welfare and denying the State of New Jersey potential tax revenues that the Legislature intended to bring to the residents.” The further claim is that by failing to ever open an OTW at Greenwood’s property, “The Defendants have waived or abandoned the protections of the Declaration.”
Insiders in the middle of this case
There’s still another angle of note in this one: prominent real estate developer Jack Morris – think Atlantic City, New Brunswick, etc. – is a co-owner of the just-opened Hard Rock casino at the former Trump Taj Mahal site. So is the Seminole tribe and Joe Jingoli, another politically-connected real estate developer in the Garden State.
Morris also happens to own the former Garden State Park site, and is close with South Jersey power broker George Norcross.
This issue would have even larger stakes if two things didn’t happen: Pennsylvania also legalizing sports betting, and New Jersey allowing online sports betting.
Now, retired state Senator Ray Lesniak told me years ago that he included the Garden State Park exemption simply because he believed New Jersey could cash in on eastern Pennsylvania sports betting at the Cherry Hill site. But Pennsylvanians soon will have their own sports betting options nearby.
Plus with any adult now already able to place legal sports wagers within the state’s borders, a site like Garden State Park becomes less of a destination except for the locals.