State and federal statutes often govern the same conduct. That raises constitutional concerns, especially when the statutes clash. Under the implied preemption doctrine, parties can challenge state statutes if (1) a federal statute covers the same ground (conflict preemption), or (2) if Congress generally has authority over the relevant activity (field preemption).

The Sixth Circuit’s decision in Churchill Downs Technology Initiatives Company v. Michigan Gaming Control Board, Case No. 24-1235 (6th Cir. Dec. 16, 2025), clarifies how to raise a successful federal preemption claim and obtain an injunction barring the state statute’s enforcement. When a federal statute regulates the same activity as a state statute, then the state statute is unenforceable when it contradicts or adds to federal requirements.

Background

The federal government regulates interstate betting on horseracing through the Interstate Horseracing Act (IHA). That statute allows for off-track betting with consent from the relevant horseracing association (which conducts the race), the host racing commission (the regulator in the horseracing state), and the off-track racing commission (the regulator in the state where the wager is accepted). Michigan enacted its own horserace betting statute, the Michigan Horse Racing Law (MHRL), which requires a different, Michigan-centric, process for approval than the IHA.

When Northville Downs, Michigan’s only racetrack, temporarily lost its state race meeting license, the Michigan Gaming Control Board told third-party gaming facilitators to stop accepting wagers from Michigan bettors. One such facilitator, TwinSpires, refused. So, the Michigan Gaming Control Board suspended TwinSpires’ license under the MHRL. That suspension remained in place even after Northville Downs regained licensure.

Twinspires then sued, contending that Michigan’s licensing requirement conflicted with the IHA. TwinSpires argued that federal law already established who must approve interstate horseracing wagers, and the MHRL improperly added an extra layer of regulation.

The Sixth Circuit’s Holding

The Sixth Circuit sided with TwinSpires on preemption grounds. The court reasoned that the MHRL conflicts with the IHA, and under the Constitution’s Supremacy Clause, federal law controls.

The Sixth Circuit confirmed that when state and federal laws are “in conflict” or “at cross-purposes,” it is a “clear rule” that “federal law wins out.” In preemption cases, identifying the correct preemption argument can dictate the outcome.

Express preemption occurs when Congress directly withdraws certain powers from the states. That makes for easy cases. However, express preemption challenges only succeed if Congress has issued legislation with language directly providing for preemption. The IHA does not expressly preempt the MHRL or similar state statutes.

But Congress’ silence does not bar preemption claims. Courts will imply preemption when a state statute addresses a subject already governed by federal law. There are two types of implied preemption: field and conflict. First, field preemption asks whether the conduct being regulated falls into a federally occupied field, such as immigration and nuclear safety. Second, conflict preemption looks to the specific federal statute rather than the federal government’s control over certain conduct.

The Sixth Circuit found conflict preemption dispositive. The court reasoned that the MHRL interferes with the IHA’s objectives. Since the IHA intended to “loop two states into the process” — the off-track and host track states — the MHRL’s requirement to add Michigan into the picture was unconstitutional. On top of that, the MHRL added consent requirements for wager acceptances on top of those already imposed by the IHA. By ruling only on conflict preemption while avoiding field preemption, the Sixth Circuit left open whether Congress has occupied the entire field of interstate horserace wagering.

The Sixth Circuit also noted that the MHRL functioned as a “tailor-made addition” to the IHA. In such circumstances, where the state and federal statutes have a clear overlap, it is easier to find conflict preemption. If a state statute lacks the “intention of targeting the [federal] scheme,” then it may survive a preemption challenge.

After holding that the IHA likely preempted the MHRL, the Sixth Circuit affirmed the grant of a preliminary injunction. Finding TwinSpires would suffer (1) competitive harm if it lost access to its Michigan-based customers, and (2) reputational harm from accusations of illegal gambling activity, the Sixth Circuit permitted TwinSpires to continue its Michigan operations.

Key Takeaways

1. Check if an adverse state or local statute conflicts with federal legislation.

An otherwise enforceable state or local statute may still be challenged on preemption grounds. When adversely affected by state or local regulation, corporations and individuals should explore preemption arguments.

2. When considering an implied preemption challenge, conflict preemption affords a simpler, more targeted challenge than field preemption.

Conflict preemption claims allow for a narrow ruling without requiring courts to address the larger implications necessary to find field preemption. Don’t just bet on field preemption — also consider bringing a conflict preemption challenge, identifying the specific federal statute conflicting with state or local legislation.

3. If seeking an injunction, make sure to address lost customers and reputation, if possible.

Parties seeking injunctive relief need to show irreparable harm. Money damages alone do not meet that standard. But lost customers, a competitive disadvantage, and reputational harm can all show that an injury cannot be equated to dollars and warrants immediate relief.

In conclusion, implied preemption arguments allow parties to challenge state and local regulation. Attorneys at Taft can help further determine whether preemption arguments make sense in a particular situation.

Aaron Herzig and William Braff are members of Taft’s Commercial Litigation and Appellate and Critical Motions practices, where they advise clients on contracts, business disputes, business torts, and other legal matters relating to private and public companies. Taft’s commercial litigators seek to resolve disputes in a way that advances clients’ business needs and goals.