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While waiting for Bovada’s response to an order to cut off access to its website by Michigan residents, state gaming regulators insist the company will not be the last offshore casino and sports-betting site they target for illegally operating in the state.

The regulatory crackdown on illegal gambling operators is being closely followed by several other states from Ohio to California.

The Michigan Gaming Control Board (MGCB) on May 29 issued a cease-and-desist order to Curaçao-based Harp Media B.V., which operates Bovada.com and Bovada.lv.

Regulators said by accepting wagers from Michigan residents, Bovada is in violation of the state’s Internet Gaming Act, the Michigan Gaming Control and Revenue Act, and the Michigan Penal Code.

The MGCB has given Harp Media 14 days to take steps to prevent Michigan residents from gambling on Bovada’s websites before further legal action is taken.

“I have not heard from them yet,” Kurt Steinkamp, chief of staff with the MGCB, told 91����ԭ�� GamblingCompliance on Thursday (June 6). “The way the letter is written, it’s 14 days from receipt. So, if they reach out to us today and say we got it, then the clock will start.”

Steinkamp reiterated the MGCB's position that Michigan regulators may pursue further legal action if they do not receive a reply by the deadline.

He declined to discuss details of the Bovada investigation beyond saying “it will drive the legal strategy” of the MGCB.

“I can’t reveal too much there but what I will say is that Bovada, like any other company, had to have businesses in the [United] States that provide services to them,” Steinkamp said. “Whether it’s affiliate marketing, advertising, [or] payment processing.”

Those same companies, he said, are operating illegally in a legally regulated market.

“All of those companies know this is our position on it and if those companies continue to engage in a business relationship with Bovada in the event that Bovada does not comply with the cease-and-desist letter, that also puts those businesses at risk.”

“They risk not being able to operate in a very large gaming market in Michigan,” Steinkamp added.

Steinkamp did not identify any specific suppliers but said there are some companies already on the MGCB's radar and there should be “more about that … as we move forward.”

In terms of monitoring offshore gambling sites operating in Michigan, Steinkamp said the industry should expect more cease-and-desist letters to be sent to those companies. Under the state’s gaming law, the MGCB was given the authority to investigate illegal gambling.

“We take that responsibility very seriously,” he said. “We are continuing to address the issue that is out there and, of course, Bovada is a big one but there are many other companies operating in the space. Obviously, those are on our radar.”

The MGCB's action against Bovada was the most prominent action to be taken by a state regulator against an offshore gambling operator in recent years, with states generally more limited compared with the U.S. federal government in their powers to pursue actions against companies that are based overseas. 

Several states are now watching how the MGCB's attempt to ban Bovada from operating in Michigan unfolds.

“The commission is monitoring how the situation with Bovada develops,” said Jessica Franks, a spokeswoman with the Ohio Casino Control Commission. “We are in regular communication with regulators in Michigan and other jurisdictions on a variety of topics.”

Franks told 91����ԭ�� that whether land-based or online, illegal gaming activities are a pain point for many state gaming regulators. 

“The commission will use the civil and criminal tools at our disposal whenever it discovers gaming products being offered illegally in the state,” she added. “We have shut down dozens of illegal casinos masquerading as skill games businesses, seizing more than 7,000 illegal slot machines, and taken action when fantasy contest operators seek to blur the line between fantasy sports and sports gaming.”

Doug Harbach, a spokesman for the Pennsylvania Gaming Control Board (PGCB), said the board was aware of the actions taken by Michigan regulators and has concerns about illegal gambling in all forms.

“Each gaming state operates under a separate set of laws, so what one regulatory body does, does not necessarily translate to the same actions for another regulatory body such as in Pennsylvania,” Harbach said. “With that in mind, we are monitoring the situation and will take all appropriate action within our authority to combat illegal gambling.”

Harbach said since Bovada “is an unlicensed and unregulated operator, we do not have information on who and how many in Pennsylvania may be placing bets on this site.”

Representatives from the California Gambling Control Commission, Massachusetts Gaming Commission and Arizona Department of Gaming similarly told 91����ԭ�� they were aware of the recent action taken by regulators in Michigan.

The prominent offshore sportsbook and online casino operates in most U.S. states, including Michigan, but is unavailable to residents of Nevada, New Jersey, New York, Maryland, and Delaware, which were all either early adopters of regulated internet gaming or have been the location of federal prosecutions against offshore gambling.

“The department is aware of the letter sent by the Michigan Gaming Control Board to Bovada and is currently looking into the issue,” Dayne O’Brien, spokesman with the Arizona Department of Gaming, told 91����ԭ��.

When asked if the MGCB was setting a precedent for other states to follow with its crackdown on illegal gaming operators, Steinkamp declined to comment as a lot of other states are taking action, but may not be getting as much coverage as regulators in Michigan are getting.

“I do feel there is traction on some of these issues that is picking up and I would expect that to grow,” Steinkamp said. “It is definitely not something that Michigan can take on, on its own. It is something we have to work with other states on.”

Steinkamp told 91����ԭ�� that state regulators and licensed operators have been incredibly supportive of the MGCB's enforcement efforts. He added that the MGCB also has a good relationship with the U.S. Department of Justice. 

“We do stay in touch with them on things that we have going on,” Steinkamp said. “But they are going to do what they are going to do. I hope they take action on a federal level, and I believe that would be very effective.”

“We shouldn’t sit on the sidelines and wait for that action. The states do have power and we should be taking action to do what we can to address this issue as well,” he added.