The Michigan Gaming Control Board (MGCB) has ordered the Israeli gaming company Papaya Gaming to cease operations due to allegations of illegal gambling activities. According to a press release from the MGCB, the board has issued a cease and desist notice, requiring Papaya to stop operations within the state within 14 days or face legal action. This action follows an investigation initiated by an anonymous tip.
Papaya Gaming's mobile applications, including popular games such as 21 Cash, Bingo Cash, Bubble Cash, and Solitaire Cash, allow players to bet real money on game outcomes. However, the MGCB found that these games violated Michigan's gambling regulations, particularly because they offered real money betting without proper licensing. The investigation concluded that Papaya's operations exceeded the strict legal framework of the state.
Regulatory Violations and Legal Implications
The MGCB determined that Papaya Gaming violated several laws, including the Legal Internet Gaming Act and the Michigan Gaming Control and Revenue Act. These laws require internet gambling operators to obtain a license from the MGCB, a requirement that is limited to state-approved casinos and tribal entities.
According to Michigan law, unlicensed operators may face severe penalties, including up to 10 years in prison or fines up to $100,000. MGCB Executive Director Henry Williams reiterated the agency's zero-tolerance policy towards illegal gambling, stating, "Michigan does not tolerate illegal gambling, and we will take all necessary measures to protect residents from such unlawful activities."
Papaya Gaming's Ongoing Legal Troubles
The cease order further intensifies the legal challenges faced by Papaya Gaming. The company is currently involved in a lawsuit filed by competitor Skillz in the Southern District Court of New York. Skillz accuses Papaya of using computer bots to mislead players into thinking they are competing against real people. Papaya has denied these allegations, calling it a smear campaign aimed at damaging its reputation.
Additionally, a federal class action lawsuit is also underway, with Papaya's customers making similar allegations. Papaya's response claims that Skillz's accusations are baseless and accuses Skillz of "engaging in the same deceptive practices it accuses others of."
Michigan's Crackdown on Illegal Gambling
Papaya Gaming is not the only company facing regulatory action in Michigan. The MGCB has intensified its efforts to combat illegal gambling in 2024, issuing similar orders to operators like Bovada Gaming and VGW. The agency encourages residents to report suspicious or illegal gambling activities, emphasizing its commitment to maintaining a fair and legal gambling environment within the state.
