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When it comes to enforcing Michigan gambling laws related to online gambling offered by unlicensed parties, the Michigan Gaming Control Board (MGCB) has been among the most active regulatory bodies in the United States. The MGCB took another action on that front on Thursday.
A news release from the MGCB shares that the body sent a cease-and-desist letter to Curaçao-based Bovada stating that accepting deposits from and awarding prizes to players in Michigan violates federal and state statutes. While enforcement actions might be limited, such measures have been effective for the MGCB. Additionally, Bovada has some history of respecting these state laws.
MGCB to Bovada: Shut it down or else
The news release from May 30 states that “following an investigation into the matter, the MGCB sent a cease-and-desist letter to Harp Media B.V., which operates Bovada, on May 29.” Furthermore, the release shares that “Harp Media B.V. has 14 days from receipt of the letter to take steps to prevent Michigan residents from gambling on their websites or MGCB will take legal action.”
Regarding the laws in question, the MGCB lists the US Lawful Internet Gaming Act and multiple facets of state law. The MGCB reiterates the importance of Michiganders only gambling with licensed operators to close out the communique.
The MGCB’s concerns pertain to its enforcement duties. However, consumer protections and revenue for the state are also of importance in this matter.
Bovada’s operation in Michigan is a substantive violation
While the MGCB makes its position that Bovada’s acceptance of players in Michigan violates the letter of the law, it’s far more than a technicality. Unregulated online casinos pose safety concerns for customers and deprive states of gaming revenue.
Because Bovada and other similar operators have unregulated status in Michigan, the MGCB has no device for ensuring that its online slots and other games are fair. Moreover, there is no body with the power to ensure that these casino operators pay out winnings.
Perhaps most importantly, these gaming companies do not abide by Michigan’s standards for controls for people to limit their gaming activities. Thus, they can be dangerous for people who struggle with gambling-related behavioral pathologies.
When it comes to the fiscal bottom line, Bovada pays Michigan no share of the revenue it makes off Michigan players in the form of gaming taxes. Bovada also does not pay the fees that legal Michigan online casinos pay. Therefore, its operation represents a removal of that economic value from the state.
For these reasons, the MGCB has threatened legal action for non-compliance. Compliance on Bovada’s part might have to be more voluntary than forced, though.
The MGCB’s options for legal action against Bovada
As Harp Media B.V. makes its base in Curaçao, the MGCB really has no enforcement power over the company. Law enforcement in Michigan can really only make appeals to Curaçao’s government to act on its concerns and/or request the United States government echo its pleas.
The MGCB has had some success getting unlicensed operators to pull out of the state in the past. Earlier this year, Virtual Gaming Worlds announced that it would no longer accept players from Michigan. That company operates the popular Chumba sweepstakes online casino.
Virtual Gaming Worlds made that move shortly after Michigan Atty. Gen. Dana Nessel sent a similar warning to a different social online casino operator. Also playing into this situation is some precedent for Bovada pulling out of another US state.
Soon after New York legalized online sports betting in 2021, Bovada voluntarily ceased accepting registrations from people there. In an announcement, Bovada cited the new state law as the reason for that change.
At the same time, legal online casino play in Michigan has been available since 2021 as well. To date, Bovada has made no similar moves to restrict its business to exclude Michiganders. Thus, Bovada might not be as inclined to respond to this action by the MGCB.
This letter from the MGCB could provide a catalyst for change. For the MGCB, there was little downside to this attempt. If it’s effective, the online gambling industry in the state will be safer.
