Michigan Gaming Board Issues Cease-and-Desist to Papaya Gaming Over Alleged Illegal Gambling

The Michigan Gaming Control Board (MGCB) has recently taken significant steps to combat illegal gambling operations in the state, issuing a cease-and-desist letter to Papaya Gaming, a software company based in Tel Aviv, Israel. This action follows an in-depth investigation initiated after the agency received an anonymous tip about unregulated gaming activities.

Investigation Reveals Unlicensed Gambling Apps

According to the findings, Papaya Gaming has been offering several mobile gaming applications within Michigan that allow s to buy into games and potentially win real money. The apps in question—21 Cash, Bingo Cash, Bubble Cash, and Solitaire Cash—fall under the category of unregulated gambling according to Michigan law.

Executive Director of the MGCB, Henry Williams, emphasized the agency’s commitment to maintaining a safe and lawful gaming environment within the state. “The Michigan Gaming Control Board firmly believes in a regulated and safe gaming environment,” Williams stated. “Illegal gambling is not tolerated in Michigan, and we will take all necessary actions to protect our residents from such unlawful practices.”

Violations of Michigan Gaming Laws

Papaya Gaming’s mobile applications are in violation of multiple Michigan gaming regulations, including the Lawful Internet Gaming Act, the Michigan Gaming Control and Revenue Act, and the Michigan Penal Code. These laws are in place to ensure that all internet gaming operators are properly licensed and regulated, thus safeguarding the integrity of online gaming within the state.

Under the Lawful Internet Gaming Act, only licensed operators, specifically those d with state-licensed or federally-authorized tribal casinos within Michigan, are permitted to offer online gaming. Furthermore, any software used for gaming must be provided by a licensed platform provider. The Michigan Gaming Control and Revenue Act similarly prohibits the operation of gambling activities without a license issued by the MGCB, imposing severe penalties for noncompliance. Those found guilty of operating unlicensed gambling operations could face felony charges, with penalties including up to 10 years in prison, a fine of up to $100,000, or both.

Moreover, the Michigan Penal Code broadly prohibits any unauthorized gambling that involves consideration, prize, and chance. Any activity where players can exchange money for a chance to win more based on an uncertain event is strictly prohibited if it’s not properly licensed.

Papaya Gaming’s Response and Next Steps

Papaya Gaming has been given 14 days from the receipt of the cease-and-desist letter to halt its operations within the state or face further legal action. In response to the letter, Papaya Gaming issued a statement on October 3, asserting its compliance with relevant regulations. The statement reads, “We are reviewing the letter. Papaya complies with all applicable laws and regulations in the jurisdictions in which it operates. We look forward to addressing the matter in due course with the Michigan Gaming Control Board. We are confident that Papaya will continue to present lawfully in Michigan.”

The MGCB’s investigation serves as a stern reminder to companies offering online gaming services in Michigan that compliance with state regulations is essential. As the investigation continues, Papaya Gaming must either comply with Michigan’s gaming laws or face potential legal consequences, which could include further fines and penalties.

This incident also highlights the importance of ensuring that any gaming operations within Michigan are conducted in a regulated and secure environment as the state continues to take decisive action against illegal gambling activities.

Source:

Michigan Gaming Control Board issues cease-and-desist letter to Papaya Gaming, based in Israel, for illegal gambling activities, michigan.gov, October 3, 2024.