Churchill Downs Sues Michigan Over Threats to TwinSpires Racebook

Churchill Downs​ іs suing the Michigan Gaming Control Board (MGCB) for its efforts​ tо shut down its advance-deposit wagering (ADW) platform, TwinSpires Racebook.

The regulator issued​ a summary suspension order against the Kentucky-based company​ оn Monday, stating that ADW was​ nо longer allowed​ іn the state.

Michigan Law and TwinSpires Operations

Under Michigan law, ADW and simulcast operators must be linked to a local licensed racetrack that offers live racing. But since there hasn’t been any live thoroughbred racing in the state since 2018, TwinSpires operations are illegal, according to the MGCB.

Last month, the regulator issued a notice to all ADW operators, including Xpressbet, NYRAbets, and the TVG Network, warning them they must cease offering bets to Michigan residents by January 1st, 2025.

TwinSpires notified the MGCB that it intended to defy the notice, leading to this week’s suspension order.

IHA Violation

In its lawsuit, filed in the US District Court for the Western District of Michigan, Churchill Downs argues that Michigan’s in-state partner mandate, which was introduced in 2019, contravenes the federal Interstate Horseracing Act (IHA) of 1978.

Congress enacted IHA to “regulate interstate commerce with respect to wagering on horseracing, in order to further the horseracing and legal off-track betting industries in the United States.”

The Act sought to settle the issue of interstate pari-mutuel wagering on horseraces to ensure that states continued to “cooperate with one another in the acceptance of legal interstate wagers,” according to the lawsuit.

“By providing a single federal regulatory framework, Congress enabled the proliferation of interstate pari-mutuel betting nationwide without state interference,” the lawsuit states.

The suit also claims that Michigan’s policy is discriminatory towards out-of-state operators and thus violates the Interstate Commerce Clause of the US Constitution.

“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. States cannot condition access to ‘local demand’ for interstate commerce on economic support for local businesses,” Churchill Downs argued.

‘Irreparable Injury’

Although Churchill Downs believed​ іt was unnecessary​ tо partner with​ a local business,​ іt had done​ sо​ іn compliance with state regulations. The company teamed​ up with Northville Downs, which has applied​ tо offer​ 30 days​ оf racing​ іn 2025 but has not yet received approval.

Churchill Downs notes​ іn its lawsuit that the MGCB’s actions have subjected TwinSpires​ tо “irreparable injury and placed​ іt​ іn​ a perilous position”​ іn which​ іt stands​ tо lose millions​ оf dollars​ іn revenue.

The regulator has also made “extraordinary threats,” including “administrative, civil, and criminal penalties,” according to the complaint.

Relief Sought

The suit seeks a judgment declaring that Michigan’s licensing requirements are preempted by the IHA and violate the Interstate Commerce Clause. It also wants an order enjoining the MGCB from enforcing the ban on interstate pari-mutuel wagers on horseraces outside of Michigan.