Michigan gaming officials may not hold sway over what happens on a tropical island but they could over U.S. firms with business ties there, including corporate partners of an offshore sports betting operator that regulators want out of the Wolverine State.
That could be the thinking of the Michigan Gaming Control Board (MGCB), which fired a shot across the bow of Bovada last week when it sent a cease-and-desist letter to a Curaçao-based company operating the online sports wagering and casino brand.
A spokesperson for the MGCB suggested this week that Bovada's suppliers may ultimately face consequences too, if the operator doesn't comply.
'Legal action' looms
According to the MGCB, Harp Media B.V. is operating illegal online gaming sites (a.k.a. Bovada) that are accessible to Michigan residents, in violation of state law. The regulator said Harp Media had 14 days from receipt of the cease-and-desist letter to stop Michiganders from gambling on those sites or the MGCB would take “legal action.”
The MGCB did not describe in its press release what exactly that action might be. Covers asked the regulator for more detail and a spokesperson reiterated that “further legal action” was possible.
“In Michigan, strict laws and rules govern internet gaming and sports betting and provide consumer protections, promote confidence, and ensure fair and honest gaming,” MGCB public information officer Lisa Keith said in an email. “We certainly hope that Bovada complies with our letter and voluntarily withdraws from the state of Michigan. If Bovada continues to offer illegal gambling to individuals located in Michigan, we are prepared to take further legal action.”
Supply and demand
Keith added that Bovada’s U.S.-based suppliers could face consequences as well if the operator doesn't knock it off in Michigan.
“Certainly, any business relationship with an illegal operator will very likely prevent a company from being licensed to do business in the very large Michigan gaming market,” Keith said. “With this letter, we have made a clear statement that Bovada is violating Michigan laws. If Bovada fails to comply with the letter, we would strongly encourage any advertisers, affiliate marketers, payment processors, and other business partners of Bovada to sever ties to avoid potential licensing or legal consequences.”
The comments shed more light on the steps the MGCB is willing to take to stop Bovada from operating in both the Michigan sports betting and Michigan online casino markets. By leaning on its suppliers, the regulator could put indirect pressure on the offshore operator and get its desired result.
That approach is similar to the one taken in Ontario, where the local regulator requires operators and gambling-related suppliers to cease any unregulated activities if they would need a license for those same activities in Canada’s most populous province.
The Alcohol and Gaming Commission of Ontario also prohibits its regulated entities from entering into agreements with anyone the agency doesn't regulate who provides services that would require a license in the province. In other words, a regulated company must cut ties with unregulated firms in Ontario.
Sorry Michigan bettors, Bovada will adhere to the C&D from Michigan. Just like they’ve done in every other state when asked. They’re playing a long game.
— Captain Jack Andrews (@capjack2000) May 30, 2024
FYI, VPN won’t be enough. You’ll need to prove your change of address as well.
The MGCB may not need to pursue any further action if Bovada closes its digital doors in Michigan. The offshore operator already does not do business in a handful of U.S. states: Nevada, New Jersey, New York, Maryland, and Delaware.
Yet Michigan may have also set a precedent that other states could follow. The American Gaming Association welcomed the MGCB's move last week and urged other states to take similar steps.
“The Michigan Gaming Control Board’s decisive action highlights that states have the power to protect their residents from predatory, offshore gambling sites and is another important step in winning the battle against the illegal market,” AGA President and CEO Bill Miller said in a statement. “The AGA applauds the MGCB’s leadership against bad actors like Bovada and urges other states to follow Michigan’s lead.”
