Federal Appeals Court Upholds Injunction Favoring TwinSpires that Prevents Michigan from Overstepping IHA

[Wandering Eyes]

A three-judge panel on the United States Court of Appeals for the Sixth Circuit has sided with the advance-deposit wagering (ADW) platform TwinSpires in a nearly year-old federal lawsuit against the Michigan Gaming Control Board (MGCB).

In an opinion issued Dec. 16, the federal appeals court agreed with the Churchill Downs, Inc. (CDI) subsidiary that operates TwinSpires by ruling that the Interstate Horseracing Act (IHA) of 1978 preempts a Michigan licensing requirement requiring that ADW providers be linked to a licensed racetrack and live race meeting.

Back on Feb. 19, a lower federal court had already granted Churchill Downs Technology Initiatives Company (CDT) an injunction that prevented state regulators from enforcing that licensing requirement against TwinSpires. The state then appealed that decision.

“TwinSpires, an Oregon-based electronic wagering platform and a business unit of CDI, accepts interstate wagers on horseraces,” Tuesday's 16-page opinion stated. “This is legal under the Interstate IHA if TwinSpires obtains consent from state regulators and the racetrack's racing association.

“But which state regulators?” the opinion asked rhetorically. “TwinSpires says only Oregon and the racetrack's home state. Michigan says it too can regulate wagers that are made in Michigan but accepted on the TwinSpires application.

“So when TwinSpires fell out of compliance with Michigan's regulations, Michigan revoked TwinSpires' license under the Michigan Horse Racing Law (MHRL),” the opinion stated.

“TwinSpires sued, arguing that Michigan's enforcement of the MHRL is inconsistent with the IHA. The district court agreed and issued a preliminary injunction. And we agree with the district court,” the opinion stated.

“TwinSpires is likely to show that the IHA preempts Michigan's licensing requirement, and the other preliminary injunction factors favor TwinSpires. So we affirm,” the opinion stated.

The Jan. 12, 2025, lawsuit by CDT stemmed from the fact that at this time last year, Michigan's law requiring ADWs to partner with a racetrack in the state couldn't be fulfilled by any ADW operator.

That's because one year ago, there hadn't been any Thoroughbred racing in Michigan since 2018, and Standardbred races had been last conducted in February 2024.

TwinSpires (and other ADWs) previously partnered with the now-demolished and later-relocated Northville Downs, whose license-holders as of late 2024 were planning to–but had not yet received at that time–approval for the required 30 days of Standardbred racing at a different location so that parties could 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.

While ADW operators Xpressbet, NYRA Bets, and TVG Network voluntarily complied with the order, TwinSpires did not.

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

CDT then sued.

On Jan. 31, Northville Downs received its licensing, allowing third-party facilitators to partner with it and accept wagers in accordance with the MHRL license requirement.

However, the MGCB continued to maintain its suspension against TwinSpires.

TwinSpires stated in court filings that the Michigan law behind the suspension was unfair.

“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 CDT lawsuit stated.

Nearly a year later, on Dec. 16, 2025, the federal appeals court explained its reasoning in upholding the injunction that allows TwinSpires to operate in Michigan while the overall lawsuit gets decided back at the lower-court level:

“Michigan points to its interest in regulating gambling and its residents' interest in the protections of Michigan law. But Michigan didn't lose its ability to regulate gambling other than wagering on interstate horseracing. The IHA is clear on that,” the opinion stated.

“Nor does the IHA necessarily prohibit Michigan from promulgating gambling regulations that incidentally bear on interstate horserace wagering (such as limiting wager types). And, of course, the state retains authority to regulate horseraces run in Michigan and horserace wagers accepted in Michigan because it wields IHA consent rights in those situations,” the opinion stated.

“Michigan also highlights the loss of revenue from Northville Downs. But any loss of revenue is self-inflicted because the Board ordered TwinSpires to shut down,” the opinion stated.

“And it notes a harm to competition: other third-party facilitators, but not TwinSpires, halted online pari-mutuel wagering when Northville temporarily lost its license. But this gets it backwards. The Board ended Northville's [licensing problem] in January 2025, and other facilitators are now free to accept wagers in compliance with the MHRL. TwinSpires still faces a license suspension. So TwinSpires would still face a competitive harm but for the injunction,” the opinion stated.

“Michigan can't condition the legality of interstate wagers on state requirements that add to the IHA's consent scheme,” the opinion stated.

“A license requirement for third-party facilitators doesn't regulate 'forms of gambling.' It regulates how off-track betting platforms accept interstate wagers,” the opinion stated.

“So Michigan's requirement is more like a plug-and-play supplement to the federal scheme than an earnest effort to regulate its residents' conduct,” the opinion stated.

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