In the latest example of a state cracking down on alternative betting sites that offer anything from virtual sweepstakes-style games to stock exchanges on athletes’ performances, Michigan has issued several cease-and-desist orders to stamp out what they consider illegal gaming.
Prediction Strike Strikes Out
The legal line between legitimate sports betting sites that are licensed and taxed by state governments where mobile and retail sports betting is legal, and those skirting, often blurring, those lines has become an issue across the nation.
In a press release earlier this month, Michigan Gaming Control Board (MGCB) Executive Director Henry Williams, said, “Gambling regulations are in place for a reason, and illegal gambling operations are not welcome in Michigan. We do not want businesses that 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.”
New York-based startup, Prediction Strike, is a corporate entity that acts as a stock exchange in which customers can buy shares that are dynamic in value, much like regular stocks, only these are predicated on professional athletes’ performances. The better they do, the higher their stock, and vice versa. On October 19, 2023, the MGCB sent the company a cease-and-desist letter.
Drake’s Stake Struck
Grammy Award-winning artist Drake gets paid handsomely by Cyprus-based Stake.us, in the form of a $100 million-per-year endorsement deal according to sources, just to gamble on its site with Bitcoin. Drake is a high-profile brand ambassador for the company but Michigan customers will soon be out of luck if they want to follow the artist’s lead and gamble on the platform.
The end came on November 2, 2023, when it was sent a cease-and-desist letter by the MGCB for promoting an unlicensed online lottery/raffle for those who purchase products through its website. Nevertheless, the company continues to operate in the United States except in Washington, New York, Nevada, Idaho, Kentucky, Vermont, and now Michigan.
Virtual Gaming Worlds or VGW is another sweepstakes-style site that has attracted the attention of Michigan’s gaming control board. Although the cease-and-desist letter was not issued until December 5, 2023, for conducting illegal gambling via Internet games, the company knew it was coming and began making plans to leave the state by the end of the year.
The company said in a press release, “VGW continually evaluates their business operations in the interests of all their stakeholders and after careful consideration, they have decided to take this course of action.”
After Michigan’s regulators issued clarifying rules in October as to what was, and was not, copacetic in their eyes to operate gaming sites, a fantasy sports company called PrizePicks removed its over/under prop-like fantasy contests from its Michigan menu and returned with a free version to avoid legal issues.
Michigan is one of six states that currently operate iGaming, or online casino gambling sites, in addition to its mobile sports betting platforms. At the time of this writing, there are 14 licensed online sportsbooks and 15 online casinos.