The Michigan Gaming Control Board (MGCB) has issued a cease-and-desist order to Papaya Gaming for operating illegal gambling within the state.
The action comes after an anonymous tip sparked an investigation into the Tel Aviv-based company’s activities.
It follows some states cracking down on social casinos due to concerns the offerings represent illegal gambling.
MGCB Executive Director Henry Williams said: “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.”
The investigation revealed that Papaya Gaming offers several mobile applications allowing Michigan residents to gamble for real money, including 21 Cash, Bingo Cash, Bubble Cash, and Solitaire Cash.
These apps violate multiple Michigan gaming laws, including the Lawful Internet Gaming Act, the Michigan Gaming Control and Revenue Act and the Michigan Penal Code.
Under Michigan law, internet gaming can only be offered by operators which are licensed by the regulator and subject to local taxes.
Violations can result in severe penalties, including up to 10 years’ imprisonment and fines of up to $100,000.
Papaya Gaming has been given 14 days to prevent Michigan residents from accessing its gambling apps, or face legal action from the MGCB.
A Papaya spokesperson told NEXT.io: “We are reviewing the letter. Papaya complies with all applicable laws and regulations in the jurisdictions in which it operates.
“We look forward to addressing the matter in due course with the Michigan Gaming Control Board. We are confident that Papaya will continue to present lawfully in Michigan.”
The MGCB has cracked down on unlicensed gaming operators throughout 2024, most notably with in January by sending cease-and-desist letters to several sweepstakes casino operators including market leader VGW.
The regulator also sent a similar letter to Costa Rica-based Bovada Gaming in May, after accusing it of violating state law.
Williams said at the time: “The proliferation of online gaming platforms has led to increased scrutiny from regulatory bodies worldwide, and this action serves as a stern warning to overseas companies that flouting local regulations will not be tolerated.
“The MGCB remains steadfast in its commitment to upholding Michigan’s laws and regulations and will continue to actively monitor and enforce compliance within the state to ensure a fair and secure gaming environment for all.”
