CDI sues Michigan regulatory agency of ADW

Churchill Downs Inc. has filed a lawsuit against the Michigan Gaming Control Board alleging that the regulator is illegally blocking its ability to take bets from the state’s residents through its account-wagering subsidiary.

The federal suit, filed earlier this week in the U.S. District Court for the Western District of Michigan, contends that the Interstate Horseracing Act of 1978 protects Churchill’s rights to take bets from Michigan residents, despite the gambling board’s decision late last year to notify account-wagering companies that they would not be able to take bets in the state as of Jan. 1 without an agreement with a live racetrack in the state.

Michigan’s last remaining racetrack, Northville Downs, shut down last February.

The suit contends that Churchill has satisfied the requirements of the IHA by having agreements with the tracks and horsemen whose simulcasts are provided to Michigan residents, and by its approval from the Oregon Racing Commission, where Churchill’s account-wagering operations are headquartered.

The Gaming Control Board changed its regulations in 2020 to require “third-party operators” to have a contract with a Michigan racetrack in order to take bets in the state.

Churchill contends in the suit that it “voluntarily” complied with that requirement even though “it has always maintained it does not need” a license from the gambling board because of its interpretation of the IHA’s requirements. The suit also says that the IHA “preempts” state-specific requirements like the one in Michigan requiring a third-party operator’s agreement, and it further alleges that Michigan’s “licensing regime” violates the interstate commerce clause of the Constitution.

That legal interpretation appears to imply that Churchill would be able to take bets from residents of any state in the United States regardless of state law. Notably, Churchill’s account-wagering operation, Twinspires.com, does not take bets in Texas, a prized market where account-wagering has not been legalized.

Churchill officials did not respond to a request for comment.

The suit notes that Churchill continued to take bets from Michigan residents after the Jan. 1 expiration of its license agreement, but that the gambling board then threatened to pursue “administrative, civil, and criminal penalties” against the company. Churchill said in the suit that ADW handle in Michigan last year was $35.8 million, with Twinspires.com accounting for 62.1 percent of the total.

Other leading account-wagering companies complied with the gambling board’s directives. The track that closed, Northville Downs, has applied for two short racing meets in 2025, but the application has not been formally approved. If it is approved, the ADWs may be able to resume operating in the state.

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