Bovada served a cease-and-desist letter in Michigan

Bovada has long been on the radar of regulators in the United States, especially after the legalization of sports gambling in the country following the repeal of PASPA in 2018.

Michigan gambling regulator targets Bovada

Now, though, regulators, are taking active steps to limit local players’ exposure to the offshore gambling market, with the Michigan Gaming Control Board confirming in a press release on Thursday that it had officially petitioned Bovada to stop operating in the state.

A cease-and-desist letter was sent to the Curacao-based bookmaker and gaming website, which is still accessible to Michigan players, but does not hold the necessary MGCB license to do so, the official statement explains.

Bovada’s operator and license holder, Harp Media B.V., now has 14 days to comply with the request and make its products unavailable to local players.

"Harp Media B.V. has 14 days from receipt of the letter to take steps to prevent Michigan residents from gambling on their websites or the MGCB will take legal action," the MGCB stated.

This is a seminal movement on the part of the regulator, as it shows a readiness from states to push back against offshore operators at a time when the illegal gambling market is said to have hit north of $9 billion.

The MGCB cited the US Lawful Internet Gaming Act as the reason behind its decision and appealed to Bovada to comply with the legislation. This is not the first high-profile case a state has launched against an offshore operator. The MGCB has outlined two other infringements besides the Internet Gaming Act, to name:

• Michigan Gaming Control and Revenue Act prohibits companies from operating without the necessary licenses and guilty parties are liable to a fine of up to $100,000 and imprisonment of up to 10 years, or both
• Michigan Penal Code prohibits any form of gambling, specifically games of chance or games that involve elements of consideration or prize

5Dimes sought a $47m settlement with the US Department of Justice in 2020 because of operating without a license in the United States. The company now hopes that it may apply for a license in New Jersey, but this process may still be riddled with difficulties, given the dim view regulators take of formerly offshore operators in general.

Bovada does not meet Michigan gambling law standards

As to Bovada, the company has been accepting customers from Michigan, or at least has not tried to block the region, as it had done elsewhere.

The MGCB considers Bovada to be sub-par when it comes to protecting consumers, and the regulator insists that local laws are tailored to protect consumers based on a strict list of criteria.

Not least, while Bovada has exposure to Michigan presently, it’s not bound by the same laws over non-compliance and does not pay either licensing fees or tax on the revenue it generates from players in the state.

The MGCB did not say how much of Bovada’s traffic came from the Great Lakes State, nor did it specify how much money the operator was supposedly earning there. Yet, the Board assured that it would pursue legal action against the operator should it fail to comply. Bovada is hardly the only website to have been targeted by regulators and lawmakers.

Recently, Michigan Attorney General Dana Nessel sent a cease-and-desist letter to another company, Virtual Gaming Worlds, prompting the company to issue a swift update and confirm it would discontinue operations in the state.

Bovada could consider pursuing a legal license in the United States, but this would be a long and difficult process, as the company would have to enter a contested playing field and meet a ream of legal prerequisites it previously did not have to comply with.

Not least, there could be some bad blood between the company and pretty much any stakeholder in the market, with competitors assaulting the company for previously running "offshore" operations, which many in the United States have referred to as altogether illegal.

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