New Jersey Judge Zaps Claim for Shopping Mall Sports Book at Former Garden State Park Racetrack

Posted on: September 9, 2019, 05:43h. 

Last updated on: September 9, 2019, 06:00h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

An effort to establish New Jersey’s first standalone retail sports book in a shopping mall on the site of the former Golden State Park racetrack was shot down last week by a federal judge in Camden.

Garden State Park
The owner of a shopping mall that was once the Garden State Park (pictured) has no right to open a sports betting outlet because of a 20-year covenant that rejects gambling operations by anyone one other than the former owner. (Image: Market Place)

Cherry Hill Towne Center Partners (CHTCP) now owns the site on which the racetrack once stood, and has redeveloped it into a thriving mixed-use retail and residential hub.

But the developer believes it has the right to launch a sports book inside the shopping mall because New Jersey’s gaming laws authorize sports betting at casinos and racetracks – and that includes its two defunct tracks: Garden State Park and the Atlantic City Raceway.

CHTCP — which is part-owned by Jack Morris, who has a stake in Hard Rock Atlantic City — is eager for a piece of a multibillion-dollar sports betting market that has recently superseded Nevada as the biggest in America.

20-Year Old Covenant Still Binding

But the former owner of the track, Greenwood Gaming subsidiary Garden Park Racing, claimed a restrictive covenant drawn up 20 years ago forbids “wagering of any sort … at any time by any party other than” the ownership group and its affiliates, according to court filings.

CHTCP sued GPR and Greenwood, demanding a judgment that the covenant was either unenforceable or couldn’t be applied to sports betting because it hadn’t existed legally in the state when the agreement was drawn up.

But US District Judge Renee Bumb begged to differ, ruling that the covenant could “only mean exactly what it says.”

“‘Wagering activities … of any sort’ must include sports wagering, because sports wagering is a ‘sort’ of wagering,” she wrote.

Bumb also criticized the manner in which the lawsuit had been filed, with CHTCP forgoing mediation.

“It would appear that, rather than accepting (GPR’s) invitation to ‘discuss (the) matter,’ Cherry Hill Towne Center raced to the courthouse and, on June 31, 2018, filed this suit,” she wrote. “The court finds the covenant unambiguous and not overly broad.”

Anti-Competition Claim

Greenwood operates Parx Casino in Bensalem, Pennsylvania, which has sports betting operations and is around 20 miles from the Garden State Park. It also owns off-track betting parlors in Philadelphia and Valley Forge and the Atlantic City Race Course, New Jersey’s only other obsolete race track that would qualify for sports betting.

CHTCP has described Greenwood’s position as “a blatant attempt to restrain competition so they can secure a monopoly for their own sports wagering operations,” adding that its actions were “restraining trade” and violating the wishes of New Jersey to allow sports betting and revenue derived from it.

The judge also rejected this argument.

“Under the facts and circumstances of this case, the court does not find that the covenant itself unreasonably restrains trade,” she said. “The covenant does not ‘burden all or most available locales to prevent them from competing in’ sports wagering. Rather, it only burdens the GSP Property, therefore the court holds that this factor does not weigh against reasonableness.”