Michigan Sports Betting Regulators Crack Down On Sweepstakes, Stock Operators

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Michigan sports betting

Three unregulated gambling websites have been ordered to cease operations by Michigan sports betting and gaming regulators.

The Michigan Gaming Control Board, in a press release Thursday, said PredictionStrike, Stake.us and VGW have been illegally taking bets without licenses, diverting revenue away from the state and putting customers at risk. It is the latest step Michigan regulators have taken against unlicensed Michigan sports betting and iGaming websites.

“Gambling regulations are in place for a reason, and illegal gambling operations are not welcome in Michigan,” MGCB Executive Director Henry Williams said in a press release. “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.”

PredictionStrike’s athlete stock market

Prediction Strike, a New York-based startup, bills itself as an athlete stock market where users can buy and sell positions on different players depending on their performances.

It operates as a fantasy game in most states, though some like New Jersey and Ohio have declared it an illegal betting platform. It raised $10 million last September in a venture capital round primarily funded by Bullpen Capital, one of the earliest investors in FanDuel.

The MGCB said it sent PredictionStrike a cease and desist letter on October 19, 2023. It cited violations for internet gaming as well as sports betting.

Representatives with the company did not immediately respond to a request for comment.

Sweepstakes casino features Drake

Cyprus-based Stake.us operates as a “social casino” under the sweepstakes model, where no purchase is necessary to play. It pays Grammy-winning artist Drake to place large bets on its platform frequently and, per its website, is an official partner of the UFC.

It operates only in the US, except these states listed in the following order on its website:

The MGCB sent Stake.us a cease and desist letter on November 2, 2023 for promoting an unlicensed online lottery and or raffle for customers who buy products through its website.

Inquiries sent to email addresses listed on the company’s website were returned to sender.

Australian sweepstakes casino leaves another state

VGW, owned by the Australian online gaming company Virtual Gaming Worlds, offers online casino games under the sweepstakes model in every state except Idaho and Washington. VGW brands include Chumba Casino and Luckyland Slots.

It received a cease and desist order on December 5, 2023, for conducting illegal gambling via internet games, in which players wager something of monetary value to win something of monetary value, the MGCB said.

According to multiple reports, VGW began taking steps to leave Michigan in November and planned to stop offering all games in December.

“VGW continually evaluates their business operations in the interests of all their stakeholders and after careful consideration they have decided to take this course of action,” the company said in a press release at the time.

Michigan sports betting regulators lead crackdowns

Michigan, along with New York and a handful of other states, spent the better part of last year clarifying what it views as sports betting and which types of products or games too closely resemble it to go unregulated.

Regulators issued clarifying rules in October, which prompted PrizePicks to pull its paid fantasy-based over/under pick’em product. The company recently returned with a free-to-play version. It is one of the few legal fantasy sports operators remaining in the state regulators-issued licensing requirements in 2022.

Michigan, which legalized sports betting and iGaming in December 2019, is home to 14 licensed online sportsbooks and 15 online casinos. They pay an 8.4% tax and $150,000 in fees for a five-year license.