Federal judge rules in favor of Churchill in Michigan suit
A federal district court judge has denied a motion sought by the Michigan Gaming Control Board to lift an injunction preventing the board from taking action against Churchill Downs Inc. for accepting bets from Michigan residents earlier in the year.
Judge Hala Y. Jarbou of the Southern Division of U.S. District Court for the Western District of Michigan ruled on Friday that Churchill Downs was likely to succeed on the merits of a case that alleged the board exceeded its legal authority by attempting to block Churchill’s account-wagering company, Twinspires.com, from accepting bets from Michigan residents after the board issued a directive late last year calling for all account-wagering on horse-racing to cease as of Jan. 1.
In the ruling, Jarbou held that Michigan’s statutes on account-wagering could not pre-empt the Interstate Horseracing Act, a 1978 federal law that provides a federal framework for simulcasting across state lines. The act requires wagering providers to gain consent from multiple parties connected to the race that is being offered for betting.
“The IHA requires certain entities to consent to interstate wagers, and no other regulation should interfere with the system that the IHA establishes,” Jarbou wrote.
The case is being closely watched in the racing industry because Churchill has so far successfully argued that the company can take bets from residents of a state where account-wagering was seemingly prohibited by state regulation. That argument could be used by account-wagering companies to expand into states where the practice is explicitly illegal, such as Texas.
The Michigan Gaming Control Board issued its directive because the licenses it issued to account-wagering companies expired at the end of 2024. Those licenses were tied to a harness track, Northville Downs, that had closed earlier in 2024. Under Michigan racing regulations, account-wagering companies were required to have an agreement with an in-state racetrack in order to operate.
Although other account-wagering companies complied with the directive, TwinSpires.com continued to take bets from Michigan residents. The gambling board then filed suit against the company to force TwinSpires.com to comply.
Northville Downs was re-organized late last year and was awarded a license at the end of January. Other account-wagering companies then began operating in the state.
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