The Western Michigan District Court has granted a preliminary injunction that will allow Churchill Downs to continue offering its advance deposit wagering (ADW) app to customers in Michigan.
The Michigan Gaming Control Board (MGCB) sent the horse racing company a cease and desist letter related to TwinSpires in December after Northville Downs, the last operational track, closed and its license ceased to be in effect. When Churchill Downs refused to comply, MGCB suspended their license.
Competing lawsuits ensued with MGCB Executive Director Henry Williams seeking for an injunction to take TwinSpires offline and Churchill seeking an injunction to keep operating.
Judge agreed TwinSpires going offline in MI would cause harm
The lawsuits were combined into one case. This week, District Court Judge Hala Jarbou sided with Churchill Downs, granting the injunction to keep them operational in Michigan as the case proceeds.
In her ruling, Jarbou sided with Churchill Downs on several arguments and concluded that the company had a more than reasonable chance of succeeding given the merits of the suit.
She also agreed that an injunction was necessary to avoid causing irreparble harm to Churchill Downs.
“The Executive Director’s continued public allegations and attempts to sanction TwinSpires will only exacerbate these harms. TwinSpires has demonstrated certain and immediate irreparable harm; a preliminary injunction is warranted to prevent further harm,” she concluded.
Court says federal law has precedent over interstate horse betting
The heart of the legal argument is whether Michigan’s state laws around horse racing or the federal Interstate Horseracing Act (IHA) determine the legality of TwinSpires in the state. In her ruling, Jarbou said the IHA preempted Michigan law, particularly because Michigan gaming law specifically focuses on the accepting of wagers, not the placing of wagers. Since the wagers are being accepted out of state and the placement of the wager isn’t governed by law, she did not agree with the MGCB’s assertion they had jurisdiction.
She also said IHA preempted Michigan laws because the law is intended to regulate interstate commerce, which is something the Constitution explicitly delegates to the federal government, not states.
In the meantime, Northvile Downs has scheduled two small meets for this year and reactivated its license. This opens the door for other ADW operators that had exited, such as XpressBets and FanDuel, to return to the state after exiting when they received C&D letters in December and complied.
