Federal Court Sides with TwinSpires in Michigan Horse Betting Dispute

TwinSpires a significant legal victory, blocking Michigan from enforcing its rules that required the online racebook to obtain state-specific licensing for placing bets on horse races held outside Michigan. The ruling, issued on Wednesday by Chief U.S. District Judge Hala Jarbou in the Western District of Michigan, declares these licensing requirements unconstitutional.

This legal development halts Michigan from applying its advance deposit wagering (ADW) licensing demands, which would have penalized TwinSpires for accepting wagers on races in other states. The judge’s decision asserts that the requirements infringe upon federal law, particularly the Interstate Horseracing Act (IHA), which governs the regulation of interstate wagering on horse races.

Michigan’s Rules Blocked

Judge Jarbou’s order stops the Michigan Gaming Control Board (MGCB) from imposing penalties on TwinSpires, a subsidiary of Churchill Downs Inc., for accepting bets from Michigan residents on out-of-state horse races. TwinSpires had filed a lawsuit challenging Michigan’s rules, asserting they conflicted with the IHA and violated constitutional provisions related to interstate commerce.

In her opinion, Judge Jarbou explained that Michigan’s attempts to force TwinSpires to obtain additional state licensing were unlawful. She stated, “When a wager is placed in Michigan, but the wager is placed on an out-of-state race, and the wager is accepted out-of-state, TwinSpires does not need [the Michigan Gaming Control Board’s] consent.” The judge highlighted that the state’s attempt to impose its own regulatory scheme clashed with federal laws that provide a framework for interstate betting on horse races.

Legal Victory for TwinSpires

The court’s decision is a preliminary injunction, meaning it temporarily blocks Michigan’s enforcement of its new licensing requirements, pending further legal proceedings. This ruling represents an early win for TwinSpires in its ongoing battle against Michigan’s attempts to regulate its business. The company is now seeking a permanent injunction and a court declaration affirming that the state’s licensing rules are unconstitutional.

Brad Blackwell, the executive vice president and general counsel of Churchill Downs, expressed satisfaction with the decision, stating, “Chief Judge Jarbou’s opinion is a thoughtful and carefully-reasoned decision that upholds the framework Congress established for interstate wagering on horse races. We are pleased with the court’s ruling and the guidance it will provide to courts throughout the country.”

Michigan, however, remains resolute in its stance, arguing that it retains the authority to impose additional requirements on out-of-state betting platforms. The state contends that the IHA does not prevent it from adding supplementary measures for out-of-state pari-mutuel betting, such as requiring partnerships with in-state licensed race meetings.

Impact on the Industry

The legal dispute revolves around a 2019 change in Michigan’s horse racing law, which introduced new licensing conditions for third-party facilitators like TwinSpires. These facilitators were required to collaborate with state-licensed race meetings to offer pari-mutuel betting. However, due to issues with Michigan’s racetrack licensing, the state saw a gap in licensed operators at the beginning of 2025, leaving no in-state entities available for partnerships with online racebooks.

Northville Downs, Michigan’s only operating racetrack, temporarily lost its license during this transition, which left TwinSpires in a bind. As a result, Michigan’s gaming authorities advised racebooks to halt operations in the state, though other operators like FanDuel Racing continued to take bets. TwinSpires refrained from accepting bets under the suspension.

The Michigan Gaming Control Board (MGCB) took the step of suspending TwinSpires’ license in early January, prompting the lawsuit filed on January 12. TwinSpires sought a preliminary injunction to prevent Michigan from enforcing its licensing conditions. The dispute escalated when Michigan filed its own suit in state court, only for the case to be transferred to federal jurisdiction.

Competitive Disadvantage and Further Legal Developments

Judge Jarbou noted that the ongoing suspension of TwinSpires’ license put the company at a competitive disadvantage in Michigan’s pari-mutuel wagering market. “An order forcing TwinSpires to cease operations in Michigan would cause TwinSpires to continue to lose its competitive place in the Michigan pari-mutuel wagering sector,” she wrote, emphasizing that the harm to TwinSpires would be exacerbated as Michigan reinstated Northville Downs’ license, allowing its competitors to resume taking bets.

Despite this legal setback, Judge Jarbou clarified that Michigan’s licensing requirements would not violate the U.S. Constitution’s dormant Commerce Clause when applied to wagers placed on races run in Michigan or accepted in the state. However, the judge found that the state could not impose additional licensing requirements on interstate wagers beyond those explicitly covered by the IHA.

While TwinSpires has secured a favorable ruling in the short term, the case remains ongoing. The decision could have wide-reaching implications for the broader gambling industry, especially for operators who accept interstate wagers. Michigan has yet to respond publicly to the ruling, and there remains the possibility of an appeal to challenge the injunction.

This case highlights the tension between state regulations and federal law, with TwinSpires arguing that Michigan’s rules are incompatible with the interstate framework established by Congress for horse racing wagers. The outcome of future proceedings could provide further clarity on how states can regulate online and interstate betting operations in the future.

Source:

‘’Michigan’s rules for horse race betting unconstitutional, judge says’’, cdcgaming.com, February 21, 2025.