Michigan Supreme Court to Decide BetMGM ‘Unpaid Winnings’ Lawsuit

The Michigan Supreme Court will hear the appeal of a player who accused BetMGM Michigan of fraud, conversion, and breach of contract for failing to honor a $3.2 million online casino win. Lower courts had found that the complaint was out of their jurisdiction and that the Michigan Gaming Control Board (MGCB) investigation should be the final word on the matter. However, the state’s Supreme Court wants to take a closer look. Its ruling may have broad ramifications for the judiciary’s involvement in future complaints.

The plaintiff, Jacqueline Davis, sued BetMGM in 2021 after the online casino refused to pay, telling her that her apparent winnings had resulted from a technical glitch. Casinos voiding a win due to malfunction is a periodic occurrence in the retail sector but rarer online. Another difference from other cases is that—according to BetMGM—the game displayed the correct win amounts, but Davis’s account was erroneously credited with a multiple of those amounts.

BetMGM countered Davis’s claims with a request for a summary disposition, arguing that Michigan’s Lawful Internet Gaming Act (LIGA) preempted Davis’ claims.

Unfortunately for Davis, the Wayne County Circuit Court agreed and dismissed her case. Then, in September 2023, a Michigan Court of Appeal panel upheld the lower court’s decision, prompting Davis to petition the higher court.

From the since contested appeals court ruling:

Plaintiff argues that the circuit court erred by determining that her claims were preempted by LIGA, and by accordingly granting defendant’s motion for summary disposition based on lack of subject-matter jurisdiction. We disagree.

Now that the Supreme Court has agreed to hear the appeal, Davis has another chance to plead her case—this time, to Michigan’s highest court.

The outcome will decide whether the Michigan Gaming Control Board (MGCB) has the final word on player-operator conflicts or whether courts offer additional remedies.

Majority Decision Affirms Lower Court Ruling

According to the 2-1 opinion delivered by appeals court judge Mark T. Boonstra, the circuit court made the right decision when granting BetMGM’s motion.

As Boonstra wrote:

If a statute vests the MGCB or other administrative agency with exclusive jurisdiction over a matter, the circuit court lacks subject-matter jurisdiction. The circuit court therefore correctly granted defendant’s motion for summary disposition.

However, in her higher court petition, Davis argued that despite filing an additional complaint with the MGCB, she had no insight or participation in the subsequent investigation or its outcome. That, she said, suggests the MGCB lacks authority to resolve player disputes.

According to Law360, Davis also argued that existing Michigan gaming laws fail to explain how to handle disputes between operators and players.

From the petition:

The focus of the current process is on whether the casino violated a rule that would impact its license, not on providing a remedy to patrons.

Notably, Davis’s argument echoes Judge Kathleen Feeney’s dissent to the appeals court majority decision. Davis’ upcoming Supreme Court arguments will likely hinge on many of the same issues.

Because the majority’s decision leaves plaintiff without a forum in which to pursue a remedy for her claim, I respectfully dissent.

Judge’s Dissent Backs Plaintiff’s Argument

In her opinion, Judge Feeney questioned the court’s application of the precedent set in Kraft v Detroit Entertainment, LLC.

Fenney wrote that the plaintiff claimed the slot machine’s appearance gave a false impression of an equal chance to win all prizes in that case. However, the odds were significantly less favorable for more significant wins.

In contrast, Feeney noted that BetMGM had not lured Davis into playing Luck O’ the Roulette by claims that obfuscated her real chances of winning. Instead, Davis’s claim is based on the platform informing her she won a specific amount and refusing to honor that win.

Feeney likened the situation to the ability to report licensed professionals for malpractice while pursuing a tort claim in civil court. She argued that by denying Davis the ability to pursue her claim, the court stacked the deck in favor of operators.

Clearly, administrative oversight of a licensed profession or business does not preclude tort or contract suits in circuit court arising out of alleged misconduct by that professional or business.

As such, Feeney concluded:

In sum, I conclude that while licensing issues, including administrative disciplinary actions against a licensee, come within the Gaming Board’s exclusive jurisdiction, disputes by a patron seeking a remedy in tort or contract do not come within the Gaming Board’s jurisdiction. Accordingly, I disagree with the majority that plaintiff cannot pursue her claims in circuit court. And by denying plaintiff a forum by which to pursue her claim of unpaid winnings, the majority’s decision lends a new meaning to the old gambling adage that the House always wins. I would reverse.

About the Author

Robyn McNeil

Robyn McNeil

Robyn McNeil (she/they) is a Nova Scotia-based writer and editor, and a lead writer at Bonus. Here she focuses on news relevant to online casinos, while specializing in responsible gambling coverage, legislative developments, gambling regulations, and industry-related legal fights.
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