Back in March 2021, a Michigan woman made headlines when she claimed she won a $3 million jackpot on BetMGM only to have the operator void the winnings and claim it was the result of a glitch. That woman is about to get her day in the state’s highest court.
BetMGM has won at the district and appeals level
Jacqueline Davis, took BetMGM to court over the issue. Davis filed a complaint with the Michigan Gaming Control Board (MGCB) and the group responded in Feburary 2022 that they were investigating the matter but that its role did not include litigating civil matters. Davis only filed the complaint after she filed her suit against the operator.
In documents that came out during the ensuing months was a letter from the MGCB to BetMGM CEO Adam Greenblatt notifying the company it had failed to report a malfunction on a game in a timely manner. While the regulator would not be taking formal action this time, it warned that future infractions could result in “formal disciplinary action”.
The court case has worked its way up the ladder and is now going to appear before the Michigan Supreme Court. On May 29, the court announced it would be hearing the case, with each side offering 20-minute oral arguments.
Power of MGCB at the heart of the court case
At the heart of the issue is where Davis can litigate her complaint against BetMGM. Both the district court and appeals court sided with BetMGM that the Lawful Internet Gambling Act (LIGA), the legislation that greenlit online gambling in the state, vests MGCB with the power to determine how to proceed on these issues.
In the majority opinion from the Court of Appeals, the group sided with BetMGM on the grounds that this is an issue for the MGCB:
“A portion of plaintiff’s claims appear to be explicitly based on defendant’s alleged violation of LIGA or rules promulgated under it; the remainder of plaintiff’s claims nonetheless conflict with the MGCB’s authority under LIGA to regulate all aspects of internet gaming. Although plaintiff argues that the letter she received from the MGCB indicated that the MGCB lacked the authority to resolve her dispute, it is clear that the MGCB had the power under LIGA to investigate disputes such as plaintiff’s, to determine whether a violation of LIGA or the rules promulgated under it had occurred, and to require corrective actions from an internet gaming provider. The fact that the MGCB did not or will not take action in plaintiff’s favor in this particular case does not alter our preemption analysis.”
Minority opinion offers argument siding with Davis
However, the appeals ruling was not unanimous. Judge Kathleen A. Feeney filed a minority opinion in the matter explaining why she would reverse the lower court’s ruling.
“I do not disagree with the majority that the Gaming Board has the authority and responsibility to investigate defendant over this incident and determine what, if any, licensing sanctions are appropriate. But plaintiff’s suit does not seek licensing sanctions against defendant; plaintiff seeks payment of the money that defendant’s gaming platform told her that she had won,” she wrote.
“In sum, I conclude that while licensing issues, including administrative disciplinary actions against a licensee, come within the Gaming Board’s exclusive jurisdiction, disputes by a patron seeking a remedy in tort or contract do not come within the Gaming Board’s jurisdiction. Accordingly, I disagree with the majority that plaintiff cannot pursue her claims in circuit court. And by denying plaintiff a forum by which to pursue her claim of unpaid winnings, the majority’s
decision lends a new meaning to the old gambling adage that the House always wins.”
