After a 13-year hiatus, the horse racing betting platform TwinSpires has returned to the Texas market, only to receive an "expulsion order" from state regulators a few days after opening. The trigger for this conflict was a favorable ruling based on the federal "Interstate Horse Racing Act" and Texas's forty-year-old "in-person betting only" ban. In plain terms, the federal court says "yes," but Texas regulators say "no." Currently, TwinSpires has quietly opened online betting to Texas residents, but the Texas Racing Commission quickly issued a cease and desist letter, threatening a fine of up to $10,000 for each violation. Want to know the latest federal vs. state law struggles in the US gambling industry? Follow ongoing regulatory boundary cases on the PASA official website.
First, the basis for restart: Michigan ruling opens the "federal priority" channel
TwinSpires withdrew from Texas in 2013, due to the Texas Racing Commission enforcing a 1986 law that required all betting to be "conducted on-site." After a law revision in 2011, telephone and online gambling were completely banned in Texas.
The turning point came in 2025. In a lawsuit in Michigan, the Federal Sixth Circuit Court of Appeals ruled: The interstate betting regulatory system established by the "Interstate Horse Racing Act" takes precedence over state law. Judge Hala Y. Jarbou wrote in the ruling: "If a state decides to allow on-site horse betting, it cannot infringe on the federal exclusive regulation of interstate off-track betting."
With this ruling, TwinSpires determined that the Texas ban no longer applied and quietly restarted services. There was no official announcement, but Texas players have already started sharing betting screenshots on social media.
Second, Texas counterattack: Cease and desist letter + up to $10,000 fine per transaction
The "low-key comeback" of TwinSpires only lasted a few days. On February 7, the Texas Racing Commission issued a formal cease and desist letter, demanding that the platform immediately stop accepting bets from Texas residents. Interim Executive Director David Holmes warned that violations could lead to:
A fine of up to $10,000 per violation
Licence suspension or revocation
Potential criminal liability
The stance of Texas regulators is clear: State law prohibits online betting, and the federal ruling does not change this. However, TwinSpires' legal team apparently plans to use the Michigan precedent as a weapon to replicate the "federal priority" logic in Texas.
Third, the Texas market: a "sleeping giant" of 31.7 million people
Texas is the second most populous state in the US, with 31.7 million residents and a deep-rooted horse racing culture, boasting several physical racetracks. For any online gambling platform, this is a market that will "run wild once the gates are opened."
Before withdrawing in 2013, TwinSpires had already established a user base in Texas. If the return is successful, it could not only bring significant revenue to the platform but also inject new betting flow into the Texas horse racing industry. But the prerequisite is—the legal battle must be won.
Fourth, a bigger game: Can the Horse Racing Act become a "Trojan Horse"?
Observers believe that TwinSpires' action in Texas is a carefully chosen "test case." If the federal "Interstate Horse Racing Act" can take precedence over the Texas ban, similar logic might be promoted to other online gambling areas—including sports betting and prediction markets.
The overall legal framework for online gambling in Texas remains unclear, with sweepstakes casinos and prediction markets also in a gray area. While other states like Virginia have legalized college sports betting, Texas remains stagnant.
The lawsuit by TwinSpires could become the first lever to pry open the Texas gambling ice layer.
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This article is from "PASA-Global iGaming Leaders," a gambling industry news channel: https://t.me/pasa_news
Original deep gambling channel: https://t.me/gamblingdeep
Free data reports: @pasa_research
PASA Matrix: @pasa002_bot
PASA official website: https://www.pasa.news
