Sweepstakes casinos and other unregulated sites offering cash prizes began exiting the Michigan market last year, and the state regulator has now confirmed its involvement in those decisions. On Jan. 18, the Michigan Gaming Control Board (MGCB) issued a press release saying it had sent cease-and-desist letters to three operators: PredictionStrike Inc., Sweepstakes Limited, and VGW Luckyland Inc.
PredictionStrike is a New York-based operator billing itself as “the world’s first fantasy sports stock market.”
Sweepstakes Limited and VGW both operate social casinos using the sweepstakes model. Sweepstakes Limited operates Stake.us, a social casino counterpart to its international cryptocasino Stake. VGW is the leading US sweepstakes casino operator, whose brands include Chumba Casino, Luckyland Slots, and Global Poker.
Such sites provide a safer alternative to black market offshore casinos in states where real money casinos haven’t yet been regulated. They comply with federal sweepstakes law, but not all states regard them as legal.
Michigan has recently been making efforts to protect its regulated online gambling operators by pushing out unregulated competition. Even where they are considered legal, social gaming sites don’t pay the same privilege tax on revenue that regulated real-money operators do.
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.
Sweepstakes Operators Have Left Michigan
All three companies named in the press release have pulled their products from Michigan. In fact, Stake.us and VGW had already decided to exit the market before receiving the cease-and-desists.
It’s unclear when Stake.us changed its policies to exclude Michigan, as it isn’t listed on the change log for its terms & conditions. However, a web search turns up articles as far back as July 2023 stating that it wasn’t accepting players from Michigan. Per the MGCB, it received its letter on Nov. 2, 2023.
As first reported by Bonus, Chumba Casino and Luckyland Slots announced their decision to leave the market on Oct. 25, 2023. At the time, the operator described this as a “business decision.”
That decision came shortly after the MGCB cracked down on another free-to-play casino, Golden Hearts, and issued its ruling against picks-style daily fantasy sports. However, the MGCB says VGW only received its official cease-and-desist on Dec. 5, 2023.
Although VGW’s sites disabled purchases as of Nov. 1, 2023, they had planned to allow customers to continue playing and redeeming prizes until Feb. 1, 2024.
The Internet Archive’s Wayback Machine shows that PredictionStrike had not yet listed Michigan as an excluded state on Sep. 25, 2023. By Jan. 16, 2024, it had. However, there are no archived versions of the site between those dates, so it’s impossible to determine when it made that decision.
None of the sweepstakes social casino operators reviewed by Bonus still serve Michigan. Fortune Coins was the last to leave, at some point since Jan. 11—before that, its terms & conditions stated that determining compliance with state laws was the player’s responsibility. Zula left just before, on Jan. 10.
The Changing Landscape for Social Gaming Sites
Because it is based on federal law, the sweepstakes casino business model isn’t explicitly addressed by most states’ laws. These sites remain legal and available in over 40 states, but the situation is dynamic. Federal sweepstakes law makes these sites legal by default, but regulators, lawmakers or courts can move to ban them much more readily than than they can a regulated product.
Aside from Michigan, the two states with clear policies against sweepstakes sites are Idaho and Washington. None of the sites reviewed by Bonus serve those states with the sweepstakes model—though some allow for-fun play in Idaho without the chance to win prizes.
Certain sites exclude a few other states electively. Stake.us is the most conservative in this regard, excluding the usual three (ID, MI, WA) plus:
- Kentucky
- Nevada
- New York
- Vermont
However, it pays out its prizes in cryptocurrency, another novel and legally complicated feature that may have influenced some of those decisions. Some other sites have excluded one or two additional states on that list, while VGW’s remain available in 47 states and the District of Columbia.
About the Author
