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Churchill Downs Inc., its online wagering arm TwinSpires, and United Tote have escalated a legal battle with the state of Texas. On March 30, the companies filed a notice of removal with the US District Court for the Eastern District of Texas, transferring a lawsuit originally filed in state court to the federal system.
The filing comes nearly a month after the state’s original lawsuit. While Churchill Downs has declined to comment, legal experts suggest the move to seek removal indicates the company is shifting from a defensive posture to a more aggressive legal strategy.
The regulatory clash: How the dispute began
The conflict began in February 2026, when TwinSpires resumed accepting horse racing wagers from Texas residents for the first time since 2013.
The company reversed its long-standing policy following a favorable ruling from the 6th US Circuit Court of Appeals in December 2025. The court ruled that the Interstate Horseracing Act of 1978 does not require approval from regulators in the bettor’s home state. Instead, consent is required only from the jurisdiction where the wager is accepted—typically a pari-mutuel hub in Oregon.
While TwinSpires interpreted the ruling as a green light for Texas operations, the Texas Racing Commission disagreed. On Feb. 7, the commission served CDI and its affiliates with a cease-and-desist letter. Shortly after, United Tote President Andrew Archibald informed the commission’s interim executive director, David Holmes, that the company did not intend to comply.
Archibald cited the 6th Circuit ruling, arguing that once a state allows pari-mutuel wagering, it cannot impose restrictions that conflict with federal law.
State enforcement: Texas files suit in Collin County
On Feb. 24, the state and the Texas Racing Commission filed suit in Collin County District Court against Churchill Downs, TwinSpires, and United Tote. Attorney General Ken Paxton’s office sought a temporary restraining order to force TwinSpires to immediately halt Texas-based wagering.
State officials argued TwinSpires was violating Texas laws that limit pari-mutuel wagering to licensed racetracks. The state characterized the company’s actions as an attempt to bypass state statutes and labeled the wagers a threat of “irreparable harm” to the public.
On Feb. 27, TwinSpires voluntarily suspended wagering for all Texas-based users. While customers can still withdraw funds, they remain unable to place new bets.
Why Churchill Downs claims federal jurisdiction
CDI’s push for removal is based on the premise that the dispute is a federal matter. The company contends the Interstate Horseracing Act of 1978 provides a national framework for regulating interstate wagering that supersedes state-level restrictions.
CDI successfully used this argument in a similar Michigan case, where it won a permanent injunction against state regulators. However, the Texas case faces a different hurdle: Texas is under the jurisdiction of the 5th US Circuit Court of Appeals, not the 6th Circuit. Because the 5th Circuit is not bound by the previous ruling, Churchill Downs must build its legal argument from scratch within this jurisdiction.
What’s next for Texas bettors
As first reported by BloodHorse, the transfer to federal court is not a certainty. Texas can challenge the removal, leaving the federal court to decide whether to keep the case or send it back to Collin County.
If the federal court accepts jurisdiction, the ruling could have major implications for the advance-deposit wagering industry. A victory for CDI could set a significant precedent for how interstate betting disputes are handled across the South. For now, TwinSpires remains inactive in Texas as the legal proceedings continue.
