Online gaming participants can initiate common-law lawsuits against organizations holding gaming licenses in Michigan.
In a significant development for online gambling in Michigan, the Michigan Supreme Court has ruled that a patron can bring common-law claims, such as fraud, conversion, and breach of contract, against an online gambling license holder in circuit court.
The ruling, made on Tuesday by the Michigan Supreme Court, unanimously held that the Lawful Internet Gaming Act (LIGA) does not eliminate or preempt these common-law claims, meaning patrons retain the right to pursue legal remedies outside the regulatory framework of the Michigan Gaming Control Board.
The case in question is Davis v. BetMGM, where Jacqueline Davis, a patron, alleged that BetMGM improperly zeroed out her account balance of over $3 million after an alleged game malfunction that caused erroneous winnings. The Michigan Supreme Court ruled that the Legislature did not intend to abrogate patrons’ common-law rights when passing LIGA and that these claims are not inconsistent with the state online gaming law.
Consequently, Davis’ claims for fraud (misrepresentation), conversion (wrongful deprivation of property), and breach of contract (failure to honor winnings under the gaming agreement) can proceed in circuit court.
This ruling overturns two lower court decisions from the Michigan Court of Appeals and the Wayne County Circuit Court, which argued that the Michigan Gaming Control Board’s jurisdiction and LIGA preempted such disputes from judicial review. The Supreme Court clarified that the statute does not bar patrons from seeking legal recourse via common-law claims.
The decision remands the case back to the circuit court for trial on the merits of these claims. Common-law claims available include at least fraud, conversion, and breach of contract. No indication was found that other common-law causes of action are barred, so these remain viable claims post-ruling according to the available information.
This ruling marks a significant step forward for patrons seeking legal recourse in online gambling disputes in Michigan. The reporting of this ruling was done by Ben Solis from Michigan Advance.
[1] Michigan Supreme Court Decision: Davis v. BetMGM [2] Michigan Court of Appeals Decision: Davis v. BetMGM [3] Wayne County Circuit Court Decision: Davis v. BetMGM [4] Michigan Supreme Court Order Remanding Case Back to Circuit Court [5] Michigan Advance Article: Michigan Supreme Court Allows Patron to Sue Online Gambling License Holder in Landmark Ruling
The Michigan Supreme Court's ruling in Davis v. BetMGM has expanded legal options for patrons, permitting them to bring common-law claims, such as fraud and breach of contract, against online gambling license holders in circuit court, particularly since the Lawful Internet Gaming Act (LIGA) does not preempt these claims. The decision also emphasized that additional common-law causes of action, like conversion, remain viable post-ruling.
