Michigan Scrutinizes Suppliers Over Game Content In Illegal Markets

May 31, 2024
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In the latest of a series of actions cracking down on illegal online gambling, the Michigan Gaming Control Board has issued a cease-and-desist letter to offshore sportsbook Bovada and is also requiring licensed suppliers to attest that they do not provide games to illegal operators internationally.
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In the latest of a series of actions cracking down on illegal online gambling, the Michigan Gaming Control Board (MGCB) has issued a cease-and-desist letter to offshore sportsbook Bovada and is also requiring licensed suppliers to attest that they do not provide games to illegal operators internationally.

Under a new MGCB policy, suppliers of internet gaming content in Michigan will need to disclose, when applying for or renewing their license, whether they currently or have previously supplied game content to unlicensed operators active in either the United States or in international markets.

The six-page “attestation” form was finalized in mid-April and recently published on the regulator’s website.

Michigan gaming regulators will require answers to six specific questions, including whether an applicant or licensed supplier accepts or has previously accepted any “money or any other valuable thing for supplying internet gaming content, directly or indirectly, to jurisdictions in which internet gambling is prohibited or illegal, or is a jurisdiction sanctioned by the Office of Foreign Assets Control, a division of the U.S. Department of Treasury”.

Suppliers must also disclose if they have ever received a cease-and-desist letter, fine or other penalty in any jurisdiction related to illegal gambling operations.

The MGCB may require additional information or documents based on the information submitted, while any misrepresentation or omission may result in a denial of an application or license revocation, according to the attestation form.

The form is required to be submitted by suppliers annually when license fees are paid to the state, according to the MGCB.

The new supplier attestation form follows heightened lobbying activity in other U.S. states, including New York, about licensing criteria applicable to internet gaming companies as well as separate actions taken by the MGCB regarding unregulated sweepstakes-based casinos and other illegal gambling operations in the state.

The MGCB did not reply to Vixio GamblingCompliance’s request to comment on the supplier attestation form, but its executive director, Henry Williams, told attendees at last month’s International Masters of Gaming Law conference in Tampa that illegal gambling needed to be combatted on a global scale and the MGCB had adopted a “zero-tolerance policy towards illegal gaming activities”.

“The single biggest challenge facing the gaming industry today is the proliferation of illegal gaming across both land-based and online markets,” Howard Glaser, global head of government affairs and legislative counsel at Light & Wonder, told Vixio.

“Recent actions by the Michigan Gaming Control Board are leading the way in confronting illegal gaming, ensuring transparency and protecting consumers,” Glaser said.

Regulators Target Bovada

The MGCB’s ongoing activities regarding illegal online gambling continued on Thursday (May 30) when the board announced that it had sent a formal cease-and-desist letter to Curacao-based Harp Media B.V., which operates Bovada.com and Bovada.lv.

Regulators say by accepting wagers from Michigan residents, Bovada is in violation of the state’s Internet Gaming Act, the Michigan Gaming Control and Revenue Act, and the Michigan Penal Code.

“The proliferation of online gaming platforms has led to increased scrutiny from regulatory bodies worldwide, and this action serves as a stern warning to overseas companies that flouting local regulations will not be tolerated,” Williams said in a statement.

The control board said Harp Media has 14 days to take steps to prevent Michigan residents from gambling on Bovada’s websites before further legal action is taken.

The prominent offshore sportsbook and online casino operates in most U.S. states, including Michigan, but is unavailable to residents of Nevada, New Jersey, New York, Maryland and Delaware, which were all either early adopters of regulated internet gaming or have been the location of federal prosecutions against offshore gambling.

Last year, the MGCB also sent cease-and-desist letters to sweepstakes-based casino and sports-betting operators PredictionStrike, Stake.us and VGW LuckyLand Inc., whose parent company is VGW Holdings Ltd., a leading social gaming company based in Australia.

Michigan residents no longer have access to the three companies’ websites.

Despite the rapid expansion of legal mobile sports betting across the U.S. since 2018, state regulators have generally been restrained in any enforcement activities regarding offshore operations. Last April, the MGCB was one of five state regulatory agencies to join the Nevada Gaming Control Board and New Jersey Division Gaming of Enforcement in signing a letter to U.S. Attorney General Merrick Garland calling for greater focus on the issue by federal prosecutors.

In a statement welcoming the MGCB’s action against Bovada, American Gaming Association CEO and president Bill Miller said the move “highlights that states have the power to protect their residents from predatory offshore gambling sites”.

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