Lawsuit Will Have National Impact
The lawsuit filed by Churchill Downs affects Michigan and will be closely followed across the country. That is because the situation is unique: An operator refuses to comply with a regulator's order.
The US has not seen legal gambling operators push back much against regulators. While some have fought fines or penalties, none have openly defied an order to close down.
The biggest reason for operators hesitating to defy regulators is the potential fallout. A legal battle against a regulator is a bad look, and it could cost an operator a chance to be awarded operating licenses in other US markets.
MGCB Looking to Make an Example of TwinSpires
Don’t expect the MGCB to shy away from the legal fight by Churchill Downs and TwinSpires. That’s due to a concern that other operators could follow the lead of TwinSpires, including the three other ADW operators in Michigan. That will motivate the regulator to make an example of the operator, leading to an expensive and lengthy legal battle.
Lawsuit Could Hinder Efforts to Curb Problem Gambling
If Churchill Downs wins the lawsuit, it will set a legal precedent for the industry. A victory would mean operators have a say in how gambling laws are interpreted and implied.
That precedent could make efforts to curb problem gambling more difficult. Several regulators are looking to make changes to protect bettors and athletes, which would result in a drop in revenue for gambling operators. This has resulted in pushback, though the response from sportsbooks has been limited to marketing campaigns.
One of the biggest and most heated debates across the gambling industry is over player prop betting on college athletics. While support for banning the controversial bet type is strong, some sportsbooks have been trying to protect it. Giving those operators legal recourse would change that power dynamic, making it far more difficult for lawmakers and regulators to make changes.