Michigan May Target Bovada’s Sports Betting Suppliers if Offshore Operator Doesn’t Desist

"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."

Geoff Zochodne - Senior News Analyst at Covers.com
Geoff Zochodne • Senior News Analyst
Jun 3, 2024 • 18:05 ET • 3 min read
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Michigan gaming officials may not hold sway over what happens on a tropical island but they could over U.S. firms with business ties there, including corporate partners of an offshore sports betting operator that regulators want out of the Wolverine State. 

That could be the thinking of the Michigan Gaming Control Board (MGCB), which fired a shot across the bow of Bovada last week when it sent a cease-and-desist letter to a Curaçao-based company operating the online sports wagering and casino brand.

A spokesperson for the MGCB suggested this week that Bovada's suppliers may ultimately face consequences too, if the operator doesn't comply.

'Legal action' looms

According to the MGCB, Harp Media B.V. is operating illegal online gaming sites (a.k.a. Bovada) that are accessible to Michigan residents, in violation of state law. The regulator said Harp Media had 14 days from receipt of the cease-and-desist letter to stop Michiganders from gambling on those sites or the MGCB would take “legal action.” 

The MGCB did not describe in its press release what exactly that action might be. Covers asked the regulator for more detail and a spokesperson reiterated that “further legal action” was possible.

“In Michigan, strict laws and rules govern internet gaming and sports betting and provide consumer protections, promote confidence, and ensure fair and honest gaming,” MGCB public information officer Lisa Keith said in an email. “We certainly hope that Bovada complies with our letter and voluntarily withdraws from the state of Michigan. If Bovada continues to offer illegal gambling to individuals located in Michigan, we are prepared to take further legal action.”

Supply and demand

Keith added that Bovada’s U.S.-based suppliers could face consequences as well if the operator doesn't knock it off in Michigan.

“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,” Keith said. “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 comments shed more light on the steps the MGCB is willing to take to stop Bovada from operating in both the Michigan sports betting and Michigan online casino markets. By leaning on its suppliers, the regulator could put indirect pressure on the offshore operator and get its desired result.

That approach is similar to the one taken in Ontario, where the local regulator requires operators and gambling-related suppliers to cease any unregulated activities if they would need a license for those same activities in Canada’s most populous province. 

The Alcohol and Gaming Commission of Ontario also prohibits its regulated entities from entering into agreements with anyone the agency doesn't regulate who provides services that would require a license in the province. In other words, a regulated company must cut ties with unregulated firms in Ontario.

The MGCB may not need to pursue any further action if Bovada closes its digital doors in Michigan. The offshore operator already does not do business in a handful of U.S. states: Nevada, New Jersey, New York, Maryland, and Delaware. 

Yet Michigan may have also set a precedent that other states could follow. The American Gaming Association welcomed the MGCB's move last week and urged other states to take similar steps.

“The Michigan Gaming Control Board’s decisive action highlights that states have the power to protect their residents from predatory, offshore gambling sites and is another important step in winning the battle against the illegal market,” AGA President and CEO Bill Miller said in a statement. “The AGA applauds the MGCB’s leadership against bad actors like Bovada and urges other states to follow Michigan’s lead.”

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Geoff Zochodne, Covers Sports Betting Journalist
Senior News Analyst

Geoff has been writing about the legalization and regulation of sports betting in Canada and the United States for more than three years. His work has included coverage of launches in New York, Ohio, and Ontario, numerous court proceedings, and the decriminalization of single-game wagering by Canadian lawmakers. As an expert on the growing online gambling industry in North America, Geoff has appeared on and been cited by publications and networks such as Axios, TSN Radio, and VSiN. Prior to joining Covers, he spent 10 years as a journalist reporting on business and politics, including a stint at the Ontario legislature. More recently, Geoff’s work has focused on the pending launch of a competitive iGaming market in Alberta, the evolution of major companies within the gambling industry, and efforts by U.S. state regulators to rein in offshore activity and college player prop betting.

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