The Michigan Gaming Control Board (MGCB) ordered Papaya Gaming, an Israel-based gaming company,?to cease operations for running alleged illegal gambling operations. According to an MGCB press release, the board issued a cease-and-desist letter, demanding that Papaya halt its operations in the state within 14 days or face legal action. This action follows an investigation initiated after an anonymous tip.??

Papaya Gaming’s mobile applications, which include popular titles such as 21 Cash, Bingo Cash, Bubble Cash, and Solitaire Cash, allow players to stake real money on game outcomes. However, the MGCB found that these games violate Michigan’s gambling regulations, specifically because they offer real-money stakes without proper licencing. The investigation concluded that Papaya was operating outside the state’s strict legal framework.??

Regulatory violations and legal implications  

The MGCB determined that Papaya Gaming breached several laws, including the Lawful Internet Gaming Act and the Michigan Gaming Control and Revenue Act. These laws require that internet gaming operators must be licenced by the MGCB, a requirement limited to state-approved casinos and tribal entities.  

According to Michigan law, unlicenced operators can face severe penalties, including up to 10 years in prison or fines of up to $100,000. Henry Williams, Executive Director of the MGCB, reaffirmed the agency’s zero-tolerance stance on illegal gaming, stating: “Illegal gambling is not tolerated in Michigan, and we will take all necessary actions to protect our residents from such unlawful practices.”  

Papaya Gaming’s legal troubles continue  

This cease-and-desist order adds to Papaya Gaming’s mounting legal challenges. The company is already embroiled in a lawsuit filed by its competitor, Skillz, in the Southern District Court of New York. Skillz accuses Papaya of using computer bots to mislead players into believing they were playing against human opponents. Papaya has denied the allegations, calling it a smear campaign aimed at damaging its reputation.  

A federal class-action lawsuit is also ongoing, with similar accusations from Papaya’s customers. Papaya’s response describes Skillz’s claims as unfounded and accuses Skillz of “engaging in the same deceitful conduct they are accusing others of.”  

Michigan’s crackdown on illegal gaming  

Papaya Gaming is not the only company to face regulatory action in Michigan. The MGCB has increased its efforts to tackle illegal gaming in 2024, issuing similar orders against operators such as Bovada Gaming and VGW. The agency has encouraged residents to report suspicious or illegal gambling activities, highlighting its commitment to maintaining a fair and lawful gaming environment in the state.??

Papaya Gaming has 14 days to comply with the MGCB’s cease-and-desist order. If they fail to do so, the company could face legal penalties for violating state gaming laws. 

Americas

Brazil blocks 2,040 illegal betting sites ahead of regulation

Missouri casino industry sees decline in September

Missouri’s multi-million dollar gambling campaign

Regulatory

Bulgaria blocks over 2,500 illegal gambling websites

UK horseracing industry braced for potential ￡3 billion tax hikes

Greek gaming industry calls for stricter black market controls