Michigan Sues TwinSpires, Claiming ‘Blatant Defiance’ of Shutdown Order Could ‘Encourage’ Other ADWs to Violate Law

[Wandering Eyes]

Five days after 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, claiming that the Interstate Horseracing Act (IHA) pre-empts a state law that ADW providers be linked to a licensed racetrack, the executive director of the MGCB sued TwinSpires, alleging that the ADW's “blatant defiance” of a suspension order “constitutes an imminent threat to the public health, safety and welfare.”

The dueling lawsuits stem from the fact that Michigan's law requiring ADWs to partner with a racetrack in the state can't be fulfilled by any ADW right now. That's 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 now-demolished and to-be-developed Northville Downs, whose license-holders are planning to, but have not yet received, approval for the required 30 days of Standardbred racing at a different location so that all parties can be eligible for ADW and simulcasting in 2025.

On Dec. 23, 2024, the MGCB notified all licensed ADWs to cease offering wagering for Michigan residents effective Jan. 1, 2025. The shutdown was to be temporary until the harness track licensing issue got resolved.

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

After a week of continuing to operate against the order, the MGCB suspended the TwinSpires license Jan. 7.

According to the Jan. 17 suit filed by MGCB executive director Henry Williams, Churchill's ADW continues to flout the shutdown order and suspension.

“A summary suspension is not optional to the aggrieved party but rather is an immediate suspension pending a prompt hearing,” the Michigan lawsuit stated.

According to Geoff Zochodne, who reported on the conflict in a Jan. 23 story for the betting news site Covers, that administrative hearing went forward on Wednesday, but the presiding judge did not immediately issue a decision.

“Churchill's continuing violations of operating while its Michigan license is under an Order of Summary Suspension, in total disregard for the laws of the State of Michigan, is a violation of the Racing Act and, by extension, the Penal Code,” stated the Michigan lawsuit, which was initially filed in the State Circuit Court for Wayne County.

Four days later, on Jan. 21, the Michigan lawsuit got “removed” to the U.S. District Court for the Eastern District of Michigan at the behest of Churchill Downs Technology Initiatives Company, which preferred to contest the issue in a federal rather than state court.

The Michigan lawsuit alleged that Twin Spires' continued operation without state permission “may encourage other third-party licensees, and those persons not licensed, to violate the Racing Act by conducting internet wagering on horse racing.”

TwinSpires saw the situation entirely differently in its Jan. 12 lawsuit against the MGCB.

Requiring an ADW to have a partnership with a track, “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 TwinSpires lawsuit stated.

The TwinSpires suit in U.S. District Court for the Western District of Michigan further stated that, “The IHA contains no provision requiring the consent of the state in which an individual placing the wager happens to reside,” the complaint 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 TwinSpires lawsuit stated.

Now that the case has been removed to a federal court, Churchill is attempting to further get the MGCB director's lawsuit transferred to the same Western District federal court where its own lawsuit was filed because the two cases concern “the same parties and overlapping legal issues.”

Churchill is also asking the court to expedite its lawsuit and to issue a preliminary injunction in its ADW's favor.

The MGCB, by contrast, has filed opposing paperwork that asks for the federal judge to instead return the MGCB director's lawsuit to the state system, perhaps as a way for the agency to seek a “home court” advantage.

The post Michigan Sues TwinSpires, Claiming ‘Blatant Defiance’ of Shutdown Order Could ‘Encourage’ Other ADWs to Violate Law appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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