Justia Gaming Law Opinion Summaries

The case involves a group of bettors who sued Churchill Downs, Inc., and trainers Robert Baffert and Bob Baffert Racing, Inc., after the horse they bet on, Medina Spirit, was disqualified from the 2021 Kentucky Derby due to a failed post-race drug test. The bettors claimed that they would have won their bets under the new order of finish after Medina Spirit's disqualification. However, under Kentucky law, only the first order of finish marked "official" counts for wagering purposes. The plaintiffs brought claims for negligence, breach of contract, violation of the Kentucky Consumer Protection Act, and unjust enrichment.The case was initially heard in the United States District Court for the Western District of Kentucky, which granted the defendants' motions to dismiss and denied the plaintiffs leave to amend the complaint. The court found that the plaintiffs' claims were based on the theory that they had "unpaid winning wagers," but under Kentucky law, the first official order of finish is final. Therefore, the plaintiffs' wagers were lost, and the complaint failed to state a claim upon which relief could be granted.The case was then appealed to the United States Court of Appeals for the Sixth Circuit. The appellate court affirmed the lower court's decision, agreeing that the plaintiffs' claims were based on the theory that they had "unpaid winning wagers." However, under Kentucky law, the first official order of finish is final for wagering purposes. Therefore, the plaintiffs' wagers were lost, and the complaint failed to state a claim upon which relief could be granted. The court also found that the proposed amendment to the complaint did not cure this flaw, so the lower court properly denied leave to amend. View "Mattera v. Baffert" on Justia Law

In 2000, the Tribe had agreed to pay Monroe $265 million for Monroe’s 50% ownership interest in the Casino, giving the Tribe a 100% ownership interest. In 2002, the Tribe agreed to another $200 million debt in exchange for a continued gaming license from the Michigan Gaming Control Board (MGCB). In 2005, the Tribe created a new entity (Holdings), which became the Casino’s owner; pre-existing entities owned by the Tribe became Holdings' owners to allow the Tribe to refinance and raise capital to meet its financial obligations. The restructuring was approved by the MGCB, conditioned on the Tribe’s adherence to strict financial covenants. In 2005, Holdings transferred approximately $177 million to various entities. At least $145.5 million went to the original owners of Monroe. At least $6 million went to the Tribe. For three years, the Tribe unsuccessfully attempted to raise additional capital to meet its financial obligations. In 2008, the related corporate entities) filed voluntary petitions for Chapter 11 bankruptcy. The Trustee alleged that the 2005 transfers were fraudulent and sought recovery under 11 U.S.C. 544, 550. The district court and Sixth Circuit affirmed the bankruptcy court’s dismissal of the complaint on the basis of tribal sovereign immunity. The court rejected arguments that Congress intended to abrogate the sovereign immunity of Indian tribes in 11 U.S.C. 106, 101(27). View "Buchwald Capital Advisors LLC v. Sault Ste. Marie Tribe" on Justia Law