Michigan Gaming Control Board Orders Bovada to Stop Taking Bets

The Michigan Gaming Control Board has ordered Curacao-based gambling sites Bovada.com and Bovada.lv to stop taking bets in the state.

Harp Media BV, which operates both unregulated offshore sportsbooks, was issued cease-and-desist orders on Wednesday, according to a press release. The MGCB will “take legal action,” according to the release, if Bovada doesn’t comply by June 13.

One industry observer told Gaming Today that Michigan’s ability to stop Bovada would be minimal. Even tech solutions such as restricting access to the sites is in essence a game of “Whac-a-Mole” because offshore sites simply adjust their domains.

But, they noted, the MGCB effort is worthwhile from an educational standpoint as scores of new bettors in many states are unaware sites like Bovada are illegal.

A MGCB spokesperson told Gaming Today that Michigan was “prepared to take further action on multiple fronts:

“Bovada’s U.S. suppliers may also face consequences. 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. 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 MGCB said Bovada violates at least three state laws:

• Lawful Internet Gaming Act: This limits online gambling to state-licensed companies. Only casinos sanctioned under the Michigan Gaming Control and Revenue Act or run by Native American tribes under the auspices of federally recognized compacts can apply to offer online sports betting there.

• Michigan Gaming Control and Revenue Act: This outlaws running a gambling operation without a license issued by the MGCB. Doing so is a felony punishable by up to 10 years of imprisonment, up to a $100,000 fine, or both.

• Michigan Penal Code: According to the release, this “broadly prohibits any form of gambling, which generally involves the elements of consideration, prize, and chance.”

Michigan a Valuable Market for Sports Betting Companies

According to our sports betting revenue tracker, Michigan has generated the ninth-highest handle nationally since its legal market launched in December 2019. Through April, $15.6 billion in wagers had been placed there, creating $1.3 billion in revenue all-time.

However, even with 40 US jurisdictions offering a legal, regulated option, industry observers estimate that illegal offshore bookmakers still absorb as much as 65% of the American market. That makes revenue losses palpable for regulators like the MGCB and its counterparts nationally.

Placing bets with offshore sites is generally not illegal in the United States – although New Jersey regulators have threatened to go after those who do – but accepting these wagers is a crime. In 2017, before the fall of the Professional and Amateur Sports Protection Act made the legalization of sports betting a state decision, Bovada stopped accepting bets from customers in Delaware, Maryland, Nevada, New Jersey, New York, and Maryland.

Still, whether other states can shut illegal sites out remains to be seen. The American legal system has so far been unable to drastically impact offshore operations like Bovada and its scores of illegal competitors doing business in the United States and elsewhere.

There have been individual victories, but those were scored by federal prosecutors with greater reach and resources than state attorneys general. Perhaps the most notable one came nearly a quarter century ago. In 2000, Jay Cohen, the owner of Antigua-based World Sports Exchange, became the first person to be convicted in federal court of violating the Wire Act and was sentenced to 21 months in prison. He was an American citizen living in San Francisco. Subsequent convictions were only possible because offshore gambling moguls returned to American soil or were extradited.

In 2023, a Kentucky woman attempted to launch a class action suit against Bovada without success.