Interstate Horseracing Act (IHA); Whether the IHA preempts the Michigan Horse Racing Law (MHRL); Preliminary injunction; Likelihood of success on the merits; Conflict-preemption theory; Horseman’s Benevolent & Protective Ass’n-OH Div, Inc v DeWine; Whether the MHRL “interferes with” the IHA; Whether Michigan targeted the federal scheme; Whether the IHA permits states where bets are placed to determine whether interstate wagering is permitted; “Irreparable injury,” “other harms” & “public interest” factors

[This appeal was from the WD-MI.] The court affirmed the district court’s grant of a preliminary injunction to plaintiff enjoining defendant-Michigan Gaming Control Board from revoking plaintiff’s electronic wagering platform’s (TwinSpires) horse race wagering license where TwinSpires was likely to succeed on the merits of its conflict-preemption claim. TwinSpires, which is based in Oregon, is a business unit of plaintiff-Churchill Downs that accepts interstate wagers on horseraces. Under the IHA, it is required to obtain consent from state regulators and the racetrack’s racing association. Michigan determined that TwinSpires fell out of compliance with the MHRL and revoked its license under the MHRL. Plaintiff sued, arguing that “Michigan’s enforcement of the MHRL is inconsistent with the IHA.” The district court agreed and issued the preliminary injunction. The court reviewed the requirements for an injunction and held that TwinSpires was “likely to succeed on a conflict-preemption theory.” It concluded that the MHRL “interferes with the IHA's methods to reach the objectives of ‘prevent[ing] interference by one State with the gambling policies of another’ and ‘ensur[ing] States . . . cooperate . . . in the acceptance of legal interstate wagers.’” Further, the court found that “Michigan targets the federal scheme by bolting on an additional consent for wager acceptances.” The court noted that the “Supreme Court has disapproved of states tailoring regulation to target federal schemes, at least in the context of field preemption.” While the court agreed that “the state where the bet is placed can put some legality restriction on placing the bet[,] . . . what Michigan has done is impose a specific restriction on the out-of-state entities that accept the bets.” The court held that “Michigan can’t condition the legality of interstate wagers on state requirements that add to the IHA’s consent scheme.” It also held that TwinSpires established “irreparable injury” where it asserted “it might ‘lose access to its 18,000 Michigan users’ if forced to shut down, and that Michigan’s ‘accusations of illegal gambling activity have hurt its reputation and caused a loss of customer goodwill.’” In addition, the court found that the “‘merged’ other harm and public interest factors favor TwinsSpires because enjoining the enforcement of a law that violates constitutional rights ‘is always in the public interest.’”