Michigan Supreme Court rules BetMGM patron can sue over $3.2 million online gambling dispute

The Michigan Supreme Court unanimously ruled Tuesday that a lawsuit involving a multimillion-dollar online gambling dispute may proceed, allowing a BetMGM patron to pursue claims of fraud, conversion, and breach of contract.

In a decision authored by Justice Brian Zahra, the high court ruled that Michigan's Lawful Internet Gaming Act does not prevent gamblers from filing common-law claims, the Michigan Advance reported. The decision revives a lawsuit brought by online gambler Jacqueline Davis against BetMGM over withheld winnings totaling approximately $3.2 million.

The ruling reverses earlier decisions by the Michigan Court of Appeals and Wayne County Circuit Court, which had dismissed the lawsuit, citing jurisdictional limitations under the gambling statute.

Davis initially withdrew $100,000 in winnings from her BetMGM account before it was abruptly suspended, leaving a remaining sum of around $3.2 million. BetMGM claimed the funds were credited in error and closed her account. Davis then filed a lawsuit alleging fraud and breach of contract.

Lower courts dismissed the case, citing a lack of jurisdiction under the gaming statute. A Wayne Circuit Court judge noted that was because the Lawful Internet Gambling Act preempted the claims.

The Court of Appeals affirmed the dismissal in a 2-1 decision. The Supreme Court was then asked to decide whether the courts or the Michigan Gaming Control Board had jurisdiction over the dispute.

“Simply because the Michigan Gaming Control Board may take corrective measures on some matters under the [act] does not mean that the [board] is required to take corrective measures on all matters to resolve a dispute between a patron and licensee,” Zahra said. “Further, that the [board] may act does not indicate that a complaint filed with the [board] constitutes the exclusive remedy for an aggrieved consumer of online gambling activity.”

The case now returns to the trial court for further proceedings.

Justice Noah Hood did not participate in the decision, as oral arguments occurred prior to his appointment to the bench earlier this year.