Michigan Orders Online Gaming Platform Bovada to Exit the State

Article by : Erik Gibbs Jun 4, 2024

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The Michigan Gaming Control Board (MGCB) is recognized as one of the most proactive regulatory authorities in the United States in enforcing online gambling laws. Consistently taking decisive action, the MGCB ensures compliance with both state and federal regulations, aiming to protect consumers, ensure fair play, and secure economic benefits for the state.

On May 30, the MGCB announced a significant enforcement action against Harp Media B.V., the operator of Bovada, an online gambling platform not licensed in the US.

Following an investigation, the MGCB sent a cease-and-desist letter to Bovada, determining that the platform’s operations violated the US Lawful Internet Gaming Act and various Michigan state laws.

Bovada has been given 14 days from the receipt of this letter to cease allowing Michigan residents to gamble on their platform or face potential legal action.

The MGCB emphasizes several reasons for its stringent enforcement actions against unlicensed online gambling operators. Licensed operators are subject to rigorous regulatory oversight, which assures the fairness of games and the payout of winnings, thereby protecting consumers from potential fraud.

Moreover, regulated platforms are required to implement measures to help individuals manage or limit their gambling activities, addressing risks associated with gambling-related problems.

The operation of unlicensed gambling platforms like Bovada has adverse economic implications for Michigan. Unlicensed operators do not contribute to state gaming revenues through taxes or fees, depriving Michigan of significant potential income that could otherwise be generated from legal, regulated gambling activities.

This represents an economic loss for the state, as it misses out on funds that could support various public services and initiatives.

Enforcing compliance against foreign-based companies like Harp Media B.V. poses substantial challenges. The MGCB’s authority is limited to within Michigan, and they cannot directly regulate or enforce actions against companies based abroad, such as in Curaçao.

Consequently, the MGCB’s main recourse is to seek assistance from the government of Curaçao or obtain support from the US government to enforce their actions.

There are precedents where MGCB interventions have led to unlicensed operators withdrawing from Michigan. For instance, companies like Virtual Gaming Worlds ceased operations in Michigan following similar warnings from the MGCB.

Bovada has previously pulled out of New York after the state legalized online sports betting, indicating a potential willingness to comply with state regulations under certain conditions.

Despite these precedents, Bovada has not yet restricted its operations in Michigan since the state legalized online casino play in 2021. The outcome of the current enforcement action could set a significant precedent for future regulatory actions.

If Bovada complies with the cease-and-desist order, it will contribute to a safer online gambling environment in Michigan by ensuring that only licensed and regulated operators are active.

The MGCB’s action serves as a powerful deterrent to other unlicensed operators, reinforcing the importance of adhering to regulatory requirements.