Texas Sues CDI, TwinSpires Over Online Wagering

A lawsuit filed by the State of Texas in the Dallas-Fort Worth area seeks court intervention barring Churchill Downs Inc. and affiliates from taking bets on horse racing in the Lone Star State. The State of Texas and the Texas Racing Commission sued Churchill Downs Inc. and its advance-deposit wagering platform, TwinSpires, in Collin County District Court Feb. 24. United Tote Company is also named as a defendant. First reported by Horse Racing Nation, an online docket indicates that Texas wants Judge Kim Laseter to issue a temporary restraining order, known in legal circles as a TRO, against the defendants. As of this writing, the docket does not show entry of a TRO. Although fans once participated in online wagering on horse racing in Texas, such wagers were cut off over a decade ago. According to published reports, Churchill Downs and related companies began accepting wagers originating within the state earlier this year. Before instituting litigation, Texas sent Churchill a cease and desist letter. Texas rules of civil procedure provide that a temporary restraining order may be issued without notice to adverse parties, but only when "it clearly appears from specific facts shown by affidavit or by the verified complaint that immediate and irreparable injury, loss, or damage will result to the applicant before notice can be served and a hearing had thereon." Typically, such orders cannot exceed 14 days in duration, and a hearing with all parties present on whether a temporary injunction will be issued comes next, whether a TRO is granted or not. Under Texas rules, an order granting a TRO or temporary injunction shall include bond requirements showing "the amount of security to be given by the applicant." The TRO or temporary injunction typically requires the applicant "to abide the decision which may be made" and requires the applicant to "pay all sums of money and costs that may be adjudged against him if the restraining order or temporary injunction shall be dissolved in whole or in part." A contact in Texas who said he reopened his TwinSpires account two weeks ago told BloodHorse he can still place horse racing wagers on TwinSpires as of the time this story was posted. That ability will be cut off if a TRO or temporary injunction is issued in favor of Texas. A recent suit filed by Churchill Downs in Michigan challenged a conditional refusal by the state to acknowledge the legality of horse racing wagers. After an appellate federal court refused to set aside a lower court preliminary injunction entered in favor of Churchill Downs, the lower court entered summary judgment against the state. Michigan did not appeal that ruling. Assuming it is established that all the defendants named in the lawsuit are based outside Texas, they may seek to have the case removed to federal court under what is known as federal diversity jurisdiction. BloodHorse reached out to Churchill Downs for comment but was told the company does not comment on pending litigation. In a lawsuit it filed in Texas in 2012, CDI argued that Texas legislation allowing wagers only in person at a live racing or simulcast facility was unconstitutional.