The Michigan Gaming Control Board (MGCB) issued a cease-and-desist order to Israel-based Papaya Gaming based on an anonymous tip alleging illegal gambling activities. Papaya has 14 days to stop Michigan residents from using their apps, or the skills gaming operator will face legal action.
The move is the latest in an aggressive campaign against the availability of unregulated, gambling-like products. In recent years, Michigan has undertaken raids on businesses hosting illegal machines and forced the removal of unlawful operators like Bovada.
According to the MGCB, its investigation revealed Papaya’s 21 Cash, Bingo Cash, Bubble Cash, and Solitaire Cash allow players to buy in with real money. In Michigan, these skill game offerings amount to illegal gambling.
MGCB executive director Henry Williams said the board will take legal action if required.
The Michigan Gaming Control Board firmly believes in a regulated and safe gaming environment. Illegal gambling is not tolerated in Michigan, and we will take all necessary actions to protect our residents from such unlawful practices.
In addition to Michigan’s newfound interest in Papaya, the latter is involved in litigation with rival operator Skillz. That legal fight began when Skillz alleged Papaya fraudulently uses bots in its “skill-based” products. Papaya denied wrongdoing and recently replied with a countersuit accusing Skillz of similar actions, plus defamation, deceit, and intellectual property violations.
Papaya Accused of Subverting Three Michigan Laws
As detailed yesterday in the MGCB notice, Papaya’s “unregulated and unlicensed online gaming offerings” violate several state gaming laws.
The breakdown:
Lawful Internet Gaming Act
Under this Act, Internet gaming can only be offered by a licensed online gaming operator. Only casinos licensed under the Michigan Gaming Control and Revenue Act and federally authorized tribal casinos within the state can apply for an online license. Further, only licensed internet gaming platform providers can provide gaming software to a licensed operator.
Michigan Gaming Control and Revenue Act
The Revenue Act prohibits a party from conducting gambling operations without an MGCB license. A party who operates unlicensed gambling is guilty of a felony punishable by up to 10 years incarceration, a fine up to $100,000, or both.
Michigan Penal Code
Michigan’s Penal Code broadly prohibits any form of unauthorized gambling involving consideration, prize, and chance. For example, accepting money, or anything with value, with the understanding and redistributing it randomly, based on chance is prohibited.
MGCB Widens Net, Encourages Reporting
Today, the MGCB issued a new notice of two cease-and-desist letters sent to companies headquartered in Costa Rica. Given the MGCB’s stated intolerance of illegal gambling and commitment to “take all necessary actions to protect our residents,” this likely won’t be the last.
In the meantime, the MGCB urges residents to use caution when gambling online. For best practices, it suggests players verify the legality of sites before logging on. The board also offers a list of licensed providers for download through its website.
Further, the MGCB encourages anyone with knowledge of illegal gambling to report their concerns, as it “remains vigilant” in defending state gaming laws.
Residents can report suspicions by calling 1-888-314-2682 or messaging [email protected].