TwinSpires, after Defying Michigan Order Other Bet-takers Complied With, Sues State in Federal Court

[Wandering Eyes]

The Churchill Downs, Inc. (CDI) subsidiary that operates the advance-deposit wagering (ADW) platform TwinSpires sued the Michigan Gaming Control Board (MGCB) in federal court Jan. 12, alleging that the state's requirement that ADW providers be linked to a licensed racetrack and live race meeting is “unlawful.”

The state's track-partnership requirement currently can't be fulfilled by any ADW because there hasn't been any Thoroughbred racing in Michigan since 2018, and Standardbred races last ran in February 2024.

TwinSpires (and other ADWs) had previously partnered with the harness operation at Northville Downs, which is planning to, but has not yet received, approval for the required 30 days of racing to be eligible for ADW and simulcasting in 2025.

On Dec. 23, 2024, the MGCB notified all licensed third-party facilitators to cease all ADW account wagering services for Michigan residents effective Jan. 1, 2025.

This ban was to be in effect “until all licensing issues are resolved,” according to a Jan. 9 MGCB statement.

According to the MGCB, while Xpressbet, NYRA Bets, and TVG Network complied with the order, TwinSpires did not.

“Despite this directive, on Dec. 31, 2024, TwinSpires informed the Board that it would continue to offer account wagering for Michigan accounts, in violation of state law,” the MGCB stated.

“TwinSpires' continued violation of legal regulations prompted the MGCB to intervene and enforce compliance with the established laws governing simulcast racing by issuing [a] summary suspension order,” the MGCB stated. “A virtual hearing before an Administrative Law Judge has been requested [to] determine whether this summary suspension should continue, or if other fines and penalties should be imposed.”

TwinSpires sees the situation differently.

“It is no different than if Michigan required any online retailer to partner with an in-state brick-and-mortar store before it could accept orders from individuals in Michigan,” the lawsuit stated.

Among the arguments articulated by Churchill Downs Technology Initiatives Company in its civil complaint on behalf of TwinSpires in United States District Court for the Western District of Michigan (Southern Division) are that the state-track licensing requirement is allegedly “preempted by the Interstate Horseracing Act (IHA) of 1978” and purportedly also violates the Interstate Commerce Clause.

“The IHA contains no provision requiring the consent of the state in which an individual placing the wager happens to reside,” the lawsuit stated. “This makes sense given the historic understanding that wagering is regulated in the location it is accepted, not where the individual placing the bet resides.”

The lawsuit continued: “MGCB's actions have subjected TwinSpires to irreparable injury and placed it in a perilous position. If TwinSpires is forced to cease its interstate ADW offering in Michigan, which federal law clearly permits, then it stands to wrongfully lose millions of dollars in revenue for which TwinSpires would never be able to recover damages, because the state is immune from money damages.”

The lawsuit stated that, “Michigan has made clear it can and likely will pursue 'administrative, civil, and criminal penalties' pursuant to the state's Licensing Requirements if TwinSpires continues to offer ADW to Michigan consumers under the IHA. That includes potential criminal prosecution or a fine of up to $10,000 for engaging in interstate commerce expressly authorized under federal law…

“These extraordinary threats to TwinSpires's business, coming for the first time since it began offering its platform to Michigan residents over a decade ago, gives TwinSpires no choice but to ask this Court to protect its legal rights now,” the lawsuit stated.

The MGCB could not be reached for comment on the lawsuit in time for deadline for this story. The agency will have its chance to file a legal response to the complaint.

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