Two Panama-licensed offshore sportsbooks, BetOnline and SportsBetting, received cease-and-desist letters from the Michigan Gaming Control Board (MGCB).
The two sites have 14 days to respond to the order, after which they will have to stop accepting users from Michigan. The MGCB announced the action in a press release posted on their official site.
MGCB executive director, Henry Williams, commented, “The Michigan Gaming Control Board is committed to enforcing Michigan’s gaming laws and protecting consumers from illegal gambling. We encourage residents to only engage with licensed and regulated online platforms for a safe and fair gaming experience.”
Last year, unlicensed sportsbooks generated almost double the revenue of licensed operators in Michigan. Licensed sportsbooks made $470 million, while unregulated sites, such as offshore sportsbooks, prediction markets, and sweepstakes, generated $896 million.
Appeal of offshore sportsbooks
Many users gamble with offshore sportsbooks that offer better odds and more payment options, such as cryptocurrencies.
This was referenced in the MGCB’s statement with regards to BetOnline offering users the option to find accounts “via credit card, wire transfer, or cryptocurrency.”
The site accepts payments in Bitcoin and Ethereum, allowing users to deposit quickly, and players receive additional bonuses for using crypto.
Similar sites also frequently offer more bonuses and better odds than licensed operators. Even in states like Michigan that allow legal betting, many users turn to operators that hold licenses overseas.
The sites can also offer a wider range of markets, such as political betting. BetOnline saw a flurry of activity in their US Presidential election markets last year, for example.
CEO, Eddie Robbins III, commented at the time, “We’ve seen incredible enthusiasm for political betting in 2024. The level of engagement, the amount wagered and the diversity of bets being placed all point to a new era in political betting. Our markets give the public an exciting, interactive and innovative way to participate in the election process beyond voting.”
Clamping down on unregulated gambling
Michigan sent 11 cease-and-desist letters to online casino operators last week. Williams reaffirmed the MGCB’s mission to protect residents, stating, “We’re committed to shutting down unlicensed gambling operations and protecting the public from deceptive practices, unfair play, and financial harm.”
The clampdown also aims to protect the state’s tax revenue. Last year, gambling in Michigan contributed $425 million in tax revenue. But, unlicensed operators generated almost $2 billion in revenue, representing a big loss for the state.
Other states are also clamping down on offshore sportsbooks using places like Panama to avoid US tax laws. Mississippi’s Gaming Commission sent a cease-and-desist letter to BetOnline last year, but the company failed to respond. Illinois also sent the order to the Panama-licensed operator in February this year.
The three states also sent SportsBetting cease-and-desist letters. BetOnline bought up SportsBetting in 2012, and the two sites use the same user interfaces, betting markets, and payment options.
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