The Michigan Gaming Control Board (MGCB) has ordered Israel-based Papaya Gaming to cease operations in the state, accusing the company of running illegal gambling activities through its mobile gaming apps. The MGCB issued the cease-and-desist order on Thursday, giving Papaya 14 days to comply or face legal action.
Papaya Gaming, which offers games like 21 Cash, Solitaire Cash, Bingo Cash, and Bubble Cash, allows users to stake real money on skill-based contests. However, an investigation by the MGCB determined that these games constituted illegal gambling under Michigan law. The probe began after the MGCB received an anonymous tip alleging Papaya’s violation of state gambling regulations.
In response, MGCB Executive Director Henry Williams emphasized the agency’s commitment to upholding Michigan’s gaming laws.
“The Michigan Gaming Control Board firmly believes in a regulated and safe gaming environment,” Williams said. “Illegal gambling is not tolerated in Michigan, and we will take all necessary actions to protect our residents from such unlawful practices.”
Under Michigan law, internet gaming operators must hold a license, which is limited to state-approved casinos or tribal entities. Operating an unlicensed gambling business in Michigan is a serious offense, punishable by up to 10 years in prison or fines of up to $100,000.
Papaya Gaming has denied the allegations. In a statement to Casino.org, the company expressed confidence in its compliance with applicable laws.
This legal trouble is not new for Papaya, which has been embroiled in a separate lawsuit filed by competitor Skillz. Skillz, operating in the head-to-head skill gaming industry, accused Papaya of using computer bots in its games, deceiving players into thinking they were competing against real opponents.
The federal lawsuit, currently ongoing in New York’s Southern District Court, mirrors claims made in a class-action lawsuit by Papaya customers. Papaya has consistently denied the use of bots, describing the allegations as part of a smear campaign by Skillz.
The counterclaims describe how with its business performing poorly, Skillz embarked on a deceitful campaign against Papaya by falsely claiming that Skillz is a virtuous crusader for fairness while “accusing others of the same type of deceitful conduct they are engaging in themselves.”
In the meantime, the cease-and-desist order from Michigan adds to the company’s legal hurdles. If Papaya fails to comply within the 14-day period, it could face significant legal consequences for violating Michigan’s Gaming Control and Revenue Act and the state’s penal code, which prohibits unlicensed gambling.
While Papaya faces scrutiny, other competitors remain active in Michigan’s skill gaming market, including AviaGames and Voodoo Gaming, both of which have faced similar legal challenges. AviaGames, for instance, was ordered to pay $42.9 million to Skillz earlier this year in a separate federal case in California.
The MGCB has ramped up its efforts in 2024 to crack down on illegal gaming operators, issuing similar orders against other companies, including Bovada Gaming and sweepstakes casinos like VGW.
Original article: https://www.yogonet.com/international/noticias/2024/10/04/80855-michigan-orders-papaya-gaming-to-halt-operations-over-illegal-gambling-allegations
