Michigan Supreme Court to Rule on $3.2 Million Lawsuit Against BetMGM Casino

The BetMGM online casino could be in for a big loss in the Wolverine State.

The Michigan Supreme Court has decided to review a $3.2 million lawsuit against BetMGM’s online casino. The lawsuit was brought by bettor Jacqueline Davis, who accuses the Las Vegas-based operator of illegally voiding over $3 million in casino winnings. The incident took place back in March 2021, when David was playing “Luck O’ the Roulette.”

Davis got hot and began betting more on each hand. She eventually started betting up to $5,000 per play over a period of six days. By the fourth day she had won almost $489K but would go on to win almost $3 million more over the next two days. Davis then tried to withdraw $100,000 from her account, which is when the trouble began.

BetMGM originally sent an e-mail to Davis, congratulating her on the win and approving the withdrawal. However, the operator then suspended her account. When Davis called, BetMGM representatives told her a glitch led to her winning more than she was supposed to. They offered here a settlement, but Davis refused.

Court documents show that around 2.5% of Davis’s wins were affected by the glitch, but it’s not clear how much was paid out.  

How online casinos and sports betting apps handle technological errors have been a hot topic as both industries continue to grow. We have seen several large operators that have delt with errors in odds or payouts, which they usually catch and void quickly. However, how state courts have handled these incidents has varied.

A ruling from the Michigan Supreme Court would help set the bar operators need to clear to void bets. While many states have sided with operators over one-time software glitches, this situation is unique. Not only were Davis’s wins over a period of several days, but BetMGM has not shown how much of her winnings were affected by the error.

If the Court sides with Davis, it will go a long way in protecting bettors when errors or glitches occur. If they side with BetMGM, it will set a precedent for operators to have more leeway when voiding winnings.

The timing of this Supreme Court review coincides with a push from the Wolverine State to push out gray market operators. Offshore sportsbooks and casinos like Bovada have been receiving cease-and-desist letters asking them to close operations or face further legal action. The problem is that the state’s ability to take legal action is limited. They would require the US Department of Justice to take federal action, which could take time.

One reason regulators have told bettors to avoid offshore casinos is the lack of recourse if an error like this happens. The idea of losing out on winnings is enough to drive many bettors to opt to use regulated operators. If the court sides with BetMGM, even with a small settlement, it could further blur the lines between regulated and offshore casinos and sportsbooks, giving the so-called gray market more fuel.