MI AG Orders Social Media Online Casinos Out of State: No More Chumba Casino in Michigan?
Chumba Casino will no longer be available in Michigan as state officials continue to crack down on unlicensed gaming sites. The site began notifying customers on Tuesday (October 24).
The American Gaming Association last month praised Michigan Attorney General Dana Nessel for effectively shutting down the illegal Michigan operations of Massachusetts based Golden Hearts Games, Inc, a Chumba Casino competitor.
Golden Hearts claims to be a charitable casino. On its site they proclaim the following:
"All donations go to the Golden Hearts Charitable Foundation (EIN: 86-3294297), a U.S. 501(c)(3) public charity, which then makes grants to each individual donor’s selected charity. Donations may be tax-deductible to U.S. residents. No purchase or donation of any kind is necessary to participate or win. A purchase or donation will not increase your chances of winning."
The site explains further:
"All winnings from any of the respective games which a Player earns will be awarded as Redeemable Sweeps Coins into your Sweeps Coins account. You can elect to redeem or exchange your Redeemable Sweeps Coins at any time, provide your Redeemable Sweeps Coins balance meets the specific eligibility requires as defined in the Universal Platform Rules.
"If you elect to redeem or exchange your Redeemable Sweeps Coins for a cash prize, Golden Hearts shall use PayPal, Bank ACH or a paper check to distribute such awarded prize amounts to you, subject to minimums defined in the Universal Platform Rules and per your selection on the Site; or you can use elect to use your Redeemable Sweeps Coins to get a digital gift card through Golden Hearts’ partner, Prizeout."
So basically Golden Heart takes elements of both sweepstakes casinos and charitable gaming.
State gaming regulators began investigating Golden Hearts Games in August 2021 and found Golden Hearts’ activity constituted illegal gaming, as they did not hold a license to offer gaming in the state of Michigan. State regulated online casinos must pay a licensing fee and a specified tax rate.
In 2022, the Department of Attorney General issued a cease-and-desist letter to Golden Hearts advising that it was illegally operating. Despite the letter, Golden Hearts continued to offer its gaming product to Michigan residents. The Department subsequently sent notice under the Michigan Consumer Protection Act of its intent to file an action in state court. Faced with the intended lawsuit from the State of Michigan for violating the Lawful Internet Gaming Act by conducting internet gaming without a license, Golden Hearts thereafter agreed to halt its activity, signing an Assurance of Discontinuance stating that it would no longer offer its games in Michigan.
The Assurance of Discontinuance was filed in the Ingham County Circuit Court on September 1, 2023. The complaint also alleged that Golden Hearts’ conduct violated the Michigan Consumer Protection Act by deceiving Michiganders into thinking that they were participating in legal gaming.
“Unlicensed gaming robs our schools and our government of essential funding and leaves consumers unprotected,” Nessel said. “When companies like Golden Hearts attempt to circumvent Michigan’s gaming laws, they create the false impression that their games are legal and safe for consumers. My office is committed to ensuring that our gaming laws are strictly enforced and those who violate those laws are held accountable.”
Golden Hearts’ decision to sign an Assurance of Discontinuance is the culmination of the Department of Attorney General’s collaboration with MGCB to hold accountable individuals who try to take advantage of Michigan consumers by offering unregulated and unlicensed gaming. Michigan’s Lawful Internet Gaming Act imposes stringent standards on those who are both eligible and suitable for licensure. The highly regulated industry ensures that Michigan residents are offered fair and honest gaming.
Luckyland Casino and Chumba Casino operate in Michigan using a similar model and could be facing a similar fate, so stay tuned.
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