MGCB Targets Bovada for Illegal Online Gambling Operations

The Michigan Gaming Control Board (MGCB) has taken significant steps to curb illegal online gaming activities by an overseas company based in Curaçao. The company in question, Harp Media B.V., operates Bovada.com and Bovada.lv (Bovada), which are accessible to Michigan residents. Following a thorough investigation, the MGCB issued a cease-and-desist letter to Harp Media B.V. on May 29.

Cracking Down on Illegal Online Gaming

“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,” stated MGCB Executive Director Henry Williams. “The MGCB remains steadfast in its commitment to upholding Michigan’s laws and regulations and will continue to actively monitor and enforce compliance within the state to ensure a fair and secure gaming environment for all.”

The MGCB’s investigation revealed that Bovada’s unregulated and unlicensed offerings violate multiple Michigan gaming laws, including:

• Lawful Internet Gaming Act: This act stipulates that internet gaming can only be conducted by a licensed operator. Only casinos licensed under the Michigan Gaming Control and Revenue Act and federally authorized tribal casinos in Michigan are eligible to apply for such licenses.
• Michigan Gaming Control and Revenue Act: This act prohibits any gambling operation without an MGCB-issued license. Operating an unlicensed gambling operation is a felony, punishable by up to 10 years in prison or a fine of up to $100,000, or both.
• Michigan Penal Code: This code broadly bans any form of gambling involving consideration, prize, and chance. For instance, accepting money or something of value with the understanding that it will be paid out based on an uncertain event’s outcome is illegal.

Harp Media B.V. has a 14-day window from the receipt of the letter to prevent Michigan residents from accessing their websites. Failure to comply will result in legal action by the MGCB.

In light of these developments, the MGCB urges residents to be cautious when engaging in online gaming activities and to the legality of gaming sites before participating. A comprehensive list of licensed internet gaming providers is available on the MGCB’s website at Michigan.gov/MGCB. Additionally, residents are encouraged to report any suspicious or unlicensed gambling operations to the MGCB.

Regulatory Enforcement and Industry Changes

This move against Bovada is part of a broader effort by Michigan to regulate its online gaming environment rigorously. The letter to Bovada follows actions against other operators, such as the charitable sweepstakes casino Golden Hearts and the major sweepstakes operator VGW, both of which ceased operations in Michigan following regulatory scrutiny.

Additionally, Michigan has imposed new regulations on fantasy sports operators. In October 2023, the MGCB adopted formal regulations limiting the nature of fantasy contests, leading to the exit of operators like PrizePicks from the market.

The crackdown on illegal operators has been a significant focus for regulated gaming bodies and industry stakeholders. The American Gaming Association and major sports leagues, including the NFL, have called for stringent actions against black market operators. The MGCB’s latest action highlights the ongoing commitment to maintaining a fair and legal gaming environment in Michigan.

Bovada’s Homebase and Industry Reforms

Bovada’s operations are based in Curaçao, which is undergoing a regulatory overhaul to improve its industry reputation. The introduction of the National Ordinance for Games of Chance (LOK) aims to replace the outdated National Ordinance on Offshore Games of Hazard (NOOGH). This new legislation seeks to strengthen anti-money laundering (AML) rules and curb criminal activities associated with the gaming industry.

Curaçao’s finance minister, Javier Silvania, has stated that the LOK will act as a “safety net” against grey-listing by the Financial Action Task Force (FATF), highlighting the global efforts to tighten gaming regulations.

In Michigan, the MGCB remains vigilant, ensuring that online gaming operations adhere to legal standards and protect the interests of the state’s citizens. The ongoing enforcement actions reflect the MGCB’s dedication to creating a secure and regulated gaming environment.

Source:

“MGCB Issues Cease-and-Desist Letter to Bovada”, Michigan Gaming Control Board, May 30, 2024.