MGCB Orders Bovada to Cease Michigan Operations

In its ongoing effort to enforce state laws on online gambling, the Michigan Gaming Control Board (MGCB) has emerged as one of the most proactive regulatory bodies in the United States. Known for its stringent regulatory measures, the MGCB has consistently taken steps to safeguard consumers and ensure that only licensed operators can offer gambling services within the state. On Thursday, the MGCB intensified its efforts by targeting the Curaçao-based online gambling platform Bovada, a major player in the unregulated market.

According to a news release from the MGCB, the board issued a cease-and-desist letter to Bovada, accusing the platform of violating federal and state laws by accepting deposits from and awarding prizes to Michigan players. This move underscores the MGCB's commitment to maintaining the integrity of the state’s online gambling environment. While the board's enforcement capabilities may have their limits, these actions have proven effective in the past, and Bovada has a documented history of complying with similar state directives when faced with legal challenges.

1. Cease-and-Desist Order: The Michigan Gaming Control Board (MGCB) issued a cease-and-desist letter to Bovada, operated by Harp Media B.V., demanding that the platform stop accepting deposits from and awarding prizes to Michigan players within 14 days to avoid legal action.
2. Consumer Protection and Revenue Concerns: The MGCB's action aims to protect consumers from unregulated online gambling risks, such as unfair games and unreliable payouts, while also ensuring that gambling revenue and taxes are properly collected for the state.
3. Limited Enforcement Options: Due to Bovada’s base in Curaçao, the MGCB's enforcement power is restricted to appeals to Curaçao’s government and potential support from the US government, although similar past actions have successfully led other unlicensed operators to exit the Michigan market.

The cease-and-desist letter, sent to Harp Media B.V., which operates Bovada, was dispatched following an investigation. The letter, dated May 29, gives the company 14 days to prevent Michigan residents from accessing their gambling services. Failure to comply will result in legal action from the MGCB.

The MGCB cites the US Lawful Internet Gaming Act and various state laws in its communication, emphasizing the necessity for Michiganders to engage only with licensed gambling operators. The board highlighted the dual importance of its enforcement duties: ensuring consumer protections and securing revenue for the state.

Unregulated Operations: A Significant Violation

The MGCB underscores that Bovada’s activities in Michigan are more than a mere technical breach of the law. Unregulated online casinos pose significant risks to consumers, including the lack of assurance regarding the fairness of games and the reliability of payouts. Additionally, these operators do not contribute to Michigan’s economy through gaming taxes or operational fees, which licensed casinos are mandated to pay.

Moreover, unlicensed platforms like Bovada do not adhere to Michigan's standards for responsible gambling, potentially exacerbating issues for individuals with gambling addictions.

Potential Legal Actions Against Bovada

Given Harp Media B.V.'s base in Curaçao, the MGCB’s enforcement options are limited. The board can appeal to the government of Curaçao or seek support from the United States government. The MGCB has previously succeeded in persuading unlicensed operators to exit the state. For instance, Virtual Gaming Worlds, which runs the Chumba Casino, ceased accepting Michigan players after a similar warning.

Bovada has previously exited other US states under regulatory pressure. Following the legalization of online sports betting in New York in 2021, Bovada stopped accepting new registrations from New Yorkers, citing the new legislation. Despite legal online gambling being available in Michigan since 2021, Bovada has not restricted its services in the state until now.

The Impact of MGCB's Actions

The MGCB’s latest move could potentially spur Bovada to alter its operations in Michigan. Although the board’s direct enforcement power is limited, the cease-and-desist letter serves as a significant step towards ensuring a safer and more regulated online gambling environment in the state. The MGCB stands to enhance both consumer protection and state revenue if Bovada complies, thus marking a win for Michigan’s regulatory framework.