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Michigan Demands Social Casinos Stop Operations In State

Companies Halt Access For State’s Players

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After a lawsuit was recently filed against Amazon for offering social casino apps, the state of Michigan is also demanding that three of these types of gaming companies stop operating in the state.

The Michigan Gaming Control Board (MGCB) announced this week that the regulator recently sent cease-and-desist letters to three online gaming companies after investigations revealed the entities are offering unlicensed online gaming in the state.

The MGCB noted that the actions were part of the regulatory body’s “relentless efforts to halt illegal gaming operations in the state.”

Social Casinos Alleged to Violate State Law

Regulators allege that two companies with operations in the U.S. and one overseas have been flouting state law. Those companies named by the MGCB include:

  • PredictionStrike Inc. – Bay Shore, New York
  • VGW LuckyLand, Inc. (VGW Holdings) – San Francisco, California
  • Sweepstakes Limited (Stake.us) – Limassol, Cyprus

PredictionStrike offers players a “sports stock market” and Luckyland offers casino-style slot play. Stake.us also offers various casino social gaming and sports betting-style options. Social casinos usually involve playing for a virtual currency with no real money play. However, these often allow players to purchase additional coins if they run out.

“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 listed several Michigan gaming laws that companies allegedly violated including the Lawful Internet Gaming Act, the Michigan Gaming Control and Revenue Act, and the Michigan Penal Code.

In essence, regulators argue that the operators have offered what amounts to casino gaming and sports betting in the state without a license, depriving the state of tax revenue for online gaming. Only federally authorized tribal casinos can apply for an iGaming operator or sports betting license.

The three companies haven’t offered a public comment on the state’s move, but many of these types of operators argue that players know there are no real money gaming or winnings. The MGCB said that the three platforms “have each taken steps to prevent Michigan residents from gambling on their websites.”

In its own situation, Amazon recently contested claims against the company by arguing that federal law shields Internet platforms from claims brought involving third-party applications.