MGCB Sends Cease-And-Desist Letters To 3 Internet Gaming Companies

Written By Drew Ellis on January 22, 2024
Cease and desist letter with MGCB logo representing the cease and desist letters Michigan sent to three internet gaming companies

The Michigan Gaming Control Board is continuing its efforts to put an end to what it deems “illegal online casinos” in the state.

Last week, the MGCB announced it had recently sent cease-and-desist letters to PredictionStrike Inc., Sweepstakes Limited (Stake.us), and VG LuckyLand, Inc. (VGW).

Specifically, the MGCB investigated these companies and claimed they are offering online gaming in Michigan without licenses to do so. Cease-and-desist letters were sent to the companies following the investigations.

Specifically, the three companies received cease-and-desist letters from the MGCB on Oct. 19, Nov. 2, and Dec. 5, respectively. They had all removed themselves from Michigan before receiving the letters.

It’s something we’ve seen in the past with Golden Hearts Games, Inc. which proclaimed it did not violate these rules and was offering legal promotional gaming in the state. Yet, further litigation concerns forced their hand to cease operations in Michigan.

What the companies are being accused of violating

According to the MGCB, these companies have committed the following violations:

  • Offering internet gaming and internet sports betting in Michigan without being licensed in the state as an internet gaming operator and a sports betting operator (PredictionStrike).
  • Promoting an unlicensed online lottery and/or raffle for customers that buy its products through its internet website (Stake.us).
  • Conducting illegal gambling by offering an internet game in which a player wagers something of monetary value for the opportunity to win something of monetary value (VGW).

Due to being labeled by the MGCB as unlicensed and unregulated offerings, the board found these companies in violation of the Lawful Internet Gaming Act, the Lawful Sports Betting Act, and the Michigan Gaming Control and Revenue Act.

Companies in question all operate outside of Michigan

Notably, the three companies in question all operate outside of the state of Michigan.

PredictionStrike Inc. operates in Bay Shore, New York. Sweepstakes Limited is out of Limassol, Cyprus. VG LuckyLand, Inc. operates in San Francisco, but its parent company, VGW Holdings Ltd., is headquartered in Australia.

“Gambling regulations are in place for a reason, and illegal gambling operations are not welcome in Michigan,” MGCB Executive Director Henry Williams said in a press release. “We do not want businesses who skirt the law having access to Michigan citizens and leaving them vulnerable because they are playing on unregulated sites that leave them with no recourse, and that siphon funds away from communities because they are not paying taxes like a regulated, legal gambling establishment would.”

And, due to the cease-and-desist letters, as well as pending further litigation if they continue to operate, the MGCB states that the companies have each taken steps to prevent Michigan residents from gambling on their websites.

What the Michigan laws say

According to the Lawful Internet Gaming Act, internet gaming may only be offered by a licensed internet gaming operator.

The same applies to the Lawful Sports Betting Act. It states that internet sports betting may only be offered by a licensed sports betting operator or its licensed sports betting platform provider.

Further, only casinos that are currently licensed under the Michigan Gaming Control and Revenue Act and federally authorized tribal casinos within Michigan can apply for an internet gaming operator license. The same goes for a sports betting operator license.

And, the Michigan Gaming Control and Revenue Act prohibits a party from conducting a gambling operation without a license issued by the MGCB.

Notably, a party who operates an unlicensed gambling operation is guilty of a felony. That is punishable by imprisonment for up to 10 years or a fine of up to $100,000, or both.

Also, the Michigan Penal Code broadly prohibits any form of unauthorized gambling involving consideration, prize, and chance.

That includes accepting money, or anything of value, with the understanding that money, or anything of value, will be paid to any person based on the outcome of an uncertain event is prohibited.

Illegal online gambling vs. promotional gaming

This topic has been debated by the MGCB and the companies it has targeted for illegal online gambling over the past year.

One company that elected to cease operations in Michigan over similar threats from the MGCB and Michigan Attorney General was Golden Hearts Games, Inc.

Golden Hearts received its first of multiple cease-and-desist letters in March of 2022. It was accused of being an illegal online casino in Michigan. However, the company itself stands by the notion it was offering legal promotional gaming.

“We respect the Michigan regulators and officials who always acted in good faith and have essential, important missions, but we want to make clear that Golden Hearts Games has never admitted to any wrongdoing or legal or regulatory violations of any kind, in Michigan or anywhere,” Steve Kane, CEO & Co-Founder of Golden Hearts Games told PlayMichigan in a statement.

“The company and its counsel believe it has never violated any Michigan (or other) laws or regulations. But the Michigan A.G. stated its intent to file a civil action (under the MI Consumer Protection Act) and Golden Hearts Games is a young, small company with sparse resources. So, to avoid potentially prolonged, expensive litigation, we voluntarily withdrew from Michigan.”

Golden Hearts signed an Assurance of Discontinuance on Sept. 1 of this year and elected to withdraw its services from Michigan.

Multiple daily fantasy sports sites were forced to leave the state in similar circumstances late in 2023.

The Fantasy Contests Consumer Protection Act took effect on Oct. 11, banning DFS sites that offered over/under props on individual players that mimicked legal Michigan sports betting.

Photo by PlayMichigan
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Drew Ellis

Drew Ellis is the Lead Writer of PlayMichigan, the No. 1 source for online gambling news in Michigan. A lifelong resident of the state, Ellis has been working in various forms of media since 1998, including more than a decade in the sports betting industry prior to transitioning into US casino markets in 2020.

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