In a bold move to uphold state gambling laws, the Michigan Gaming Control Board (MGCB) has issued a cease-and-desist order to Curacao-based Harp Media BV, the operator of renowned online gambling sites Bovada.com and Bovada.lv. The regulatory body has accused Harp Media BV of allowing Michigan residents to access these gambling platforms without possessing the necessary legal licenses, thereby violating several Michigan statutes.
The cease-and-desist order, communicated on May 29, gives Harp Media BV a window of 14 days to block Michigan players from using its online services. Failing to comply with this directive could lead to legal action from the state, with heads of such operations facing severe penalties that include a prison term of up to ten years, a fine up to $100,000, or even both.
Henry Williams, the executive director of the MGCB, iterated that this stern action was intended not only to enforce state gambling laws but also to signal to international operators the seriousness of local regulations. “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,” Williams said. “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 issue originates from Michigan’s stringent gambling laws, which only permit federally authorized tribal casinos and casinos licensed under the Michigan Gaming Control and Revenue Act to offer online gaming and sports betting. By operating without a proper license, Harp Media BV is allegedly infringing the Lawful Internet Gaming Act, Michigan Gaming Control and Revenue Act, and the Michigan Penal Code—legislations designed to regulate and control the gambling industry strictly.
The timing of this crackdown is critical as Michigan is witnessing a decline in online gaming revenues. In April, the state recorded an 8.7% drop in online gaming revenue, totaling $234.8 million, which is a decrease from the previous month. Similarly, Detroit’s casinos saw an 11.7% dip in revenue, down to $109.4 million.
. This unfavorable trend has put additional pressure on the MGCB to enforce compliance and ensure all operations contribute fairly to the state’s economy.
Moreover, Bovada’s base of operations in Curaçao is itself undergoing a phase of regulatory transformation. The island is in the process of replacing its current National Ordinance on Offshore Games of Hazard (NOOGH) with the National Ordinance for Games of Chance (LOK). The new regulation aims to bring more stringent measures to combat fraud and improve the overall industry reputation, especially regarding anti-money laundering (AML) rules. Javier Silvania, Curaçao’s Minister of Finance, emphasized that the LOK would act as a protective measure against possible grey-listing by AML oversight body, the Financial Action Task Force (FATF).
Despite hopes for future reforms in Curaçao, the MGCB’s immediate focus remains on ensuring compliance with state laws. The MGCB’s firm stance serves as a precedent and a cautionary tale for other international operators aiming to extend their reach into Michigan without adhering to local legislation. By bringing such operators under scrutiny, the regulatory body aims to cultivate a transparent and well-regulated gambling ecosystem.
The consequences of non-compliance are severe. Running an unauthorized online gambling site isn’t merely a regulatory issue but a criminal offense in Michigan. Penalties are stringent, reflecting the seriousness with which the state views such infractions. In addition to substantial financial penalties, operators could face extended prison sentences, which underscores the gravity of adhering to Michigan’s gambling regulations.
This decisive action by the MGCB is a reminder of the evolving landscape of online gaming and the increasing vigilance of regulatory authorities in governing this space. As the state hardens its enforcement measures, operators worldwide are reminded of the critical importance of complying with local laws and obtaining the appropriate licenses. In an age where digital platforms easily transcend borders, adherence to regional regulations is not just a legal formality but a business imperative.
In summary, as Bovada’s parent company faces legal pressures to halt its operations in Michigan, the wider online gambling community is put on high alert. The MGCB’s decisive actions underscore the imperative for all operators to secure proper licensing and operate within the bounds of the law, not just in Michigan but in all jurisdictions where they intend to offer their services.
