Florida Issues Cease and Desist Orders to Offshore Casinos

In recent months, states have ramped up cease-and-desist orders against online casinos—targeting both new sweeps operators and offshore veterans like Bovada/Bodog, which have served American gamblers for over two decades.

Florida was the next state to act yesterday, ahead of Super Bowl LIX this week in New Orleans. Using the big game as a backdrop, Florida took action on Bovada, Bet US, and My Bookie. Florida has more than twenty million residents and is the third-largest state by population, so the pain of losing a market that size is likely to be intense.

That is if the three offshore casinos/sportsbooks decide to pull their business from the Sunshine State. Daily Fantasy Sports operators PrizePicks, Betr, and Underdog all received cease and desist letters from the State of Florida back in 2023, and all three continue to operate. PrizePicks actively advertises throughout the state.

While Florida is required to enforce the Seminole Tribe's exclusive rights to both gaming and mobile sports betting outlined in their compact, options to shutter these sites aren't practical. And while Florida may threaten felonies, it has never made an arrest or filed for the extradition of anyone operating an offshore gambling enterprise. 

This may be because it has its hands tied, trying to root out illegal slots across the state, where tens of thousands of gray market devices have appeared in recent years. In late January, Operation Fool's Treasure in Palm Beach seized more than a million dollars and over a thousand slot machines from various homes and businesses along the State's Treasure Coast.

The state's courts have also been swamped. Not just with countless illegal gambling investigations into the slots that see headlines almost every week, but with the fight against online sweep casinos.

Most notably, in November 2023, a federal court in Knapp vs. VGW Holdings set the same trap that the Unlawful Internet Gambling Enforcement Act (UIGEA) used a decade ago to slow the spread of online casinos.The US District Court wouldn't allow the online casino company's payment processor, WorldPay, which is named in the suit, to withdraw.

While much of the case is still to be heard, the implication is clear. If an online casino or sportsbook's payment processor can be held liable for damages in court cases, many of those who flaunt the law knowing that they can't be touched may find that their banks and card processors don't share the same view.

Other States Take Action

Florida isn't alone in taking on offshore casinos and sportsbooks. Just a week prior, Michigan filed a cease-and-desist against My Bookie. Late last year, it also took action against the largest sweeps casinos in the state: Luckyland Casino, Prediction Strike, and Stake.us. All three exited the state within days of receiving the letters. 

Maryland sent out 11 C&Ds in mid-January to offshore operators like BetUS, BetNow, and BetAnySport but also took action against sweepstakes casinos, including Stake.US, McLuck Casino, Rebet, and Zula Casino, amongst others.

Massachusetts sent a cease and desist to Bovada back in October, and LuckyLand Slots and Chumba both left Connecticut that same month after C&Ds were issued. West Virginia is rumored to be close to issuing C&Ds or even subpoenas to a laundry list of online casinos. 

Tennessee, tired of being ignored by Bovada, fined them $50,000 back in October. Roughly a month later, the online casino and sportsbook finally backed down and pulled out of the Volunteer State. However, they didn't bother paying the fine or even communicating with the state's gaming regulator. 

The list of states that have resorted to cease-and-desist letters or even more drastic action will likely grow into the spring and summer. Still, many of these online casinos and sportsbooks have no intention of honoring them. Even if they did, others would pop up behind them. If it comes down to a game of whack-a-mole, the states will lose.

Stronger federal action is called for but comes with its own dangers and leaves states with a one-size-fits-all solution when, in reality, each state has different definitions of sweepstakes and even gambling in general, because that is what has worked for them and their populations for a very long time. 

Once again, the best bet is probably through payment processors. While many online casinos attempt to hide behind easy-to-litigate arbitration clauses, the banks and processors profiting from accepting these transactions may prove to be an easier and less indemnified target.