Michigan regulator sends cease-and-desist letters to three companies offering illegal online gaming

The Michigan Gaming Control Board (MGCB) announced that it has sent cease-and-desist letters to three online gaming companies offering illegal gambling in the state. Investigations uncovered that these companies, two in the US and one overseas, were operating online gaming in Michigan without licenses to do so legally.

These illegal companies were PredictionStrike Inc., in Bay Shore, New York; Sweepstakes Limited (Stake.us), in Limassol, Cyprus; and VGW LuckyLand, Inc. (VGW) in San Francisco, California, whose parent company is VGW Holdings Ltd., a global technology online social gaming company headquartered in Australia. They were each sent cease-and-desist letters on October 19, November 2, and December 5, 2023, respectively.

“Gambling regulations are in place for a reason, and illegal gambling operations are not welcome in Michigan,” MGCB Executive Director Henry Williams said. “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.”

The MGCB stated the companies’ violations included:

• 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).

The MGCB noted that due to their unregulated and unlicensed online gaming offerings, PredictionStrike, Stake.us, and VGW violated the following Michigan gaming laws, including:

• The Lawful Internet Gaming Act, which states that internet gaming may only be offered by a licensed internet gaming operator, and the Lawful Sports Betting Act, which states that internet sports betting may only be offered by a licensed sports betting operator or its licensed sports betting platform provider. 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 or a sports betting operator license.
• The Michigan Gaming Control and Revenue Act, which prohibits a party from conducting a gambling operation without a license issued by the MGCB. A party who operates an unlicensed gambling operation is guilty of a felony punishable by imprisonment for up to 10 years a fine of up to $100,000, or both.
• The Michigan Penal Code, which broadly prohibits any form of unauthorized gambling involving consideration, prize, and chance. For example, 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.

The board concluded by noting that all three websites had taken steps to prevent Michigan residents from gambling on their websites.