Churchill Downs is fighting federal gaming oversight

[vixen777]

SOURCE
Most eyes in the gaming industry are singularly focused on the trio of court cases in which Kalshi is arguing the Commodity Exchange Act (CEA) can upend state Sports Betting law.

However, there is a second court case also arguing that a federal piece of legislation means some online gaming apps do not need to adhere to state regulations.

In the case of Churchill Downs vs. the Michigan Gaming Control Board (MGCB), the heart of the matter is advance-deposit wagering (ADW) apps such as TwinSpires, which is owned and operated by Churchill Downs.

Churchill in court battle with Michigan over TwinSpires app​

To date, Churchill Downs has obtained ADW licenses at the state level where requested, but actions by the MGCB have the operator changing its tune.

At the end of last year, the MGCB informed TwinSpires and other ADW apps operating in the state, such as FanDuel Racing, that they needed to cease operations. Since the lone track in the state, Northville Downs, closed in early 2024, the state determined these apps no longer had the in-state track partnership necessary to operate.

Churchill refused to comply and sued, arguing that it has all the assurances it needs to operate via the Interstate Horseracing Act (IHA) and does not need the state’s gaming regulators blessing to offer its product to Michigan residents.

Like Kalshi, Churchill won the first skirmish, receiving a preliminary injunction from the Western District of Michigan Court to remain online in the state. However, the MGCB and Michigan Attorney General Dana Nessel appealed that decision to the Sixth Circuit Court, requesting an appeal of the injunction and a stay on the enforcement of the injunction until that appeal is concluded.
The court has yet to rule on either matter but it has collected a range of opinions on the lower court’s decision.

Appeal questions where a wager takes place​

The crux of the debate comes down to how the language of the IHA and the Unlawful Internet Gambling Enforcement Act (UIGEA) are interpreted and how to define where a bet is taking place.h

Churchill Downs relied heavily on a 1953 Michigan case involving horse racing and Western Union that determined Western Union was not guilty of illegally gambling within the state because the money being wired to racetracks constituted a bet only when it was received by the racetrack offering the wager.

The racing behemoth argued that the IHA requires three approvals for ADW racing:

1. The racetrack where the race is being run
2. The state racing commission of that track
3. The state racing commission where the wager is being accepted

Arguing that TwinSpires wagers placed by customers from Michigan are being accepted at the TwinSpires hub in Oregon, Churchill Downs claimed that MGCB is trying to add a fourth criteria that is not required by federal law.

 

[dani3839]

Thanks Vixen