Michigan has one of the most robust regulated gambling landscapes in the United States. Increasingly, social and sweepstakes casinos are less a part of that environment.
One of the US’ most popular operators of social online gaming has announced that it will soon stop welcoming players from Michigan. While the reason behind the decision to discontinue operations in the state is clear, it raises questions about the viability of such gambling amid the expansion of legal real-money online casinos.
Social casinos fill gaps for US players
Social casinos can be very popular in US states where legal real-money online casinos do not yet operate. They provide much of the same experience as the real-money online casinos in offering digital versions of slots and table games.
The main difference between social casinos and real-money online casinos is that social casinos don’t use actual US dollars as their operational currency. Instead, they use their own digital currencies. That “monopoly money” is what players use to play the games in an attempt to win prizes.
At the same time, the prizes available on social casino sites are very real. On Chumba Casino, for example, players can redeem Sweeps Coins for actual cash that Chumba deposits into designated accounts. That’s a big part of why Virtual Gaming Worlds (VGW) is pulling out of Michigan.
VGW making its Michigan exit
VGW enjoys a status as one of the premier social gaming brands in the US. Its popular sites include Chumba Casino, Global Poker, and Luckyland Slots. Those sites accept players from most US states. Michigan will soon be on a short list of states in which players cannot participate.
According to a statement from VGW, it has “made a difficult decision to exit the Michigan market due to regulatory issues for Chumba, Casino, Global Poker, and Luckyland Slots.” The announcement comes just over a month after Michigan Atty. Gen. Dana Nessel ordered another social casino, Golden Hearts Games, to stop accepting players in the state.
VGW already excluded players in Idaho and Washington from its games. It’s possible to see adding Michigan to that list as a preemptive move by VGW in anticipation that Nessel would have eventually issued a similar order regarding its products.
VGW has given players in Michigan some time to adjust to the decision.
Account funding will cease in Michigan soon
According to VGW, players in Michigan will no longer be able to buy its sites’ digital currencies to fund their play as of Nov. 1. However, those with existing balances will be able to use them on the site to play through those balances until Dec. 1.
Players in Michigan will then have until Feb. 1, 2024, to redeem any available prizes on the sites. After that date, any outstanding prizes will be forfeited. At this point, VGW has shared no other plans to pull out of any other states with regulated real-money online casinos.
That doesn’t mean the future of sites like Chumba Casino is completely secure, though. The spread of regulated online casinos in more US markets could produce similar results.
The situation could change quickly for VGW
As recently as August, VGW’s sites were humming alongside Michigan online casinos. A few weeks later, that situation has turned on its head. It demonstrates how quickly things could go south from VGW’s perspective.
To date, states like New Jersey and Pennsylvania have not taken formal action against VGW or its competitors. That could change at any time, however. While VGW could argue that its sweepstakes model makes its business legal, that defense could represent significant costs.
VGW and others might decide that voluntarily exiting such markets is the lesser evil. Defending its business model could represent enormous legal and other costs. There would be no guarantee that the defense attempt would be successful.
If more states continue to legalize real-money online casino play, the liability only grows. At this time, though, social casinos are still a viable option for many US residents.