Michigan Continues Illegal Gambling Crackdown, Targets Costa Rica Operator

Article by : Erik Gibbs Oct 8, 2024

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The Michigan Gaming Control Board (MGCB) has continued its strong stance against illegal gambling operations, issuing a cease-and-desist order to Costa Rican-based company Ace23 on October 4. The company, which runs the website Ace23.ag, was given 14 days to halt its activities in Michigan, adding another chapter to the regulator’s ongoing efforts to shut down unauthorized gambling platforms in the state.

Ace23, according to the MGCB’s investigation, operates a service that enables “agents” or “bookies” to create personalized betting platforms. Through these customized websites, bookies can accept bets and manage payouts for their own clients, covering both online casino games and sports betting. Although Ace23 does not directly handle the financial transactions between players and bookies, it facilitates the process by providing infrastructure, support, and administration, charging a fee of $10 per active player on the platform each week.

While Ace23 claims to be licensed in Costa Rica and Canada, it has no such authorization in Michigan. This has led the MGCB to classify the company’s activities as illegal under Michigan’s Lawful Internet Gaming Act, the Michigan Penal Code, and the Michigan Gaming Control and Revenue Act. The MGCB’s decision follows a comprehensive investigation in partnership with law enforcement agencies, which concluded that Ace23’s business model is in direct violation of state laws regulating online gaming and sports betting.

The MGCB noted that Ace23 functions as a centralized service for independent bookmakers, giving them the tools to run their own gambling operations. This decentralized structure allows bookies to manage their own betting operations, with Ace23 providing administrative and technical support, but without the company itself directly engaging in gambling. Despite the company’s attempts to distance itself from direct betting activity, the lack of a Michigan gaming license made its operations unlawful in the state.

This move against Ace23 is part of the MGCB’s larger campaign to curb unregulated gambling activities within Michigan. Just one day before the order, the MGCB had issued a similar notice to Papaya Gaming, an Israel-based mobile gaming company that was offering unlicensed gambling services to Michigan residents. The MGCB has established itself as one of the most proactive state regulators, regularly investigating and halting illegal gambling operations that target Michigan players.

So far in 2024, the MGCB has already issued cease-and-desist orders to multiple companies running illegal online casinos or sportsbooks. Earlier this year, the regulator cracked down on sweepstakes operators, such as VGW, and also took action against offshore sportsbook operator Bovada. These enforcement efforts have been a central part of the MGCB’s strategy to protect Michigan’s regulated gambling market from outside competition and illicit activities.

The MGCB’s vigilance extends beyond unauthorized gambling operators. Last month, it helped uncover a major case of fraud involving a bettor in suburban Detroit.

Jeffrey Saco, the bettor in question, was charged with eight felonies after allegedly exploiting a vulnerability in Caesars Sportsbook’s system to steal more than $500,000. Saco reportedly deposited over $2 million in fictitious funds into his account, which allowed him to place bets worth $88 million in total. The scheme, which took place over 16 days, was stopped after Saco transferred over $521,000 into his personal bank account.