Connecticut has joined the growing list of states taking a firm stance against offshore sportsbook operators. The state’s Department of Consumer Protection Gaming Division is preparing to send a cease-and-desist letter to Bovada, instructing the company to halt its operations within the state. This move comes as part of a broader effort to eliminate the “gray market” of unregulated sportsbooks that operate in a legal gray area.
Details of the Cease and Desist Letter
The cease-and-desist letter will be addressed to Harp Media B.V., the Curaçao-based company that operates Bovada. A representative from Connecticut’s gaming regulator confirmed that the letter would be sent within the next week or two. The letter will instruct Bovada to stop its illegal activities in Connecticut, where sports betting is legal and regulated.
Connecticut Follows Michigan’s Lead
This action by Connecticut follows a similar move by the Michigan Gaming Control Board, which issued a cease-and-desist letter to Bovada on May 29. Michigan’s letter gave Harp Media B.V. 14 days to prevent Michigan residents from gambling on their sites or face further legal action. Bovada has yet to respond to Michigan’s notice, and it remains to be seen how they will react to Connecticut’s impending letter.
State Actions Against Unregulated Operators
With the growth of legal sports betting in the US, states are increasingly moving to shut out unregulated operators to ensure that tax revenue goes to the state. States like Delaware, Maryland, Nevada, New Jersey, and New York have also requested Bovada to cease operations within their jurisdictions. Bovada complied with these requests but has not yet responded to the latest round of letters from Michigan and Connecticut.
Potential Turning Point for Bovada
While Bovada has complied with past requests, the company might change its stance with more states taking action. States cannot pursue legal action against offshore sportsbooks without help from the US Department of Justice, which may not prioritize this issue highly. Refusing to comply with cease-and-desist letters poses significant risks for Bovada but could be a necessary stand as more states push to eliminate gray market competitors. Failure to act now could result in being locked out of the US market entirely.
Massachusetts Considers Similar Action
Massachusetts is also considering sending a cease-and-desist letter to Bovada. The Massachusetts Gaming Commission recently requested an evaluation of Bovada’s operations within the Commonwealth. Commissioner Nakisha Skinner suggested discussing potential steps the commission might take, referencing Michigan’s recent decision to send a cease-and-desist letter to Bovada. Skinner proposed including a discussion on a cease-and-desist letter in a future agenda meeting.
Warnings About Unregulated Platforms
Connecticut’s Department of Consumer Protection Gaming Division regularly sends out cease-and-desist letters but does not typically issue public notices for each one. However, reminders about regulated online sports betting sites are usually issued in late summer as football season approaches. These reminders also highlight the dangers of using unregulated platforms for placing wagers.
Bovada’s Legal Challenges
Bovada has been targeted by the legal sports betting industry for some time. In a letter to U.S. Attorney General Merrick Garland in 2022, the American Gaming Association’s CEO called for a crackdown on illegal sportsbooks like Bovada. Illegal sites can offer better odds and promotions because they do not pay state and federal taxes or have comparable regulatory compliance costs and obligations.
Connecticut Sports Betting Market Overview
Connecticut has one of the smaller legal markets in the US sports betting industry. In April, the three licensed sportsbooks in Connecticut handled $156.8 million in wagers, with over a 20% year-over-year increase. FanDuel has led for most months over the past year, with DraftKings close behind. Recently, Fanatics launched as the third sportsbook option in December, replacing PlaySugarHouse as the Connecticut Lottery’s sports betting partner.
Conclusion
The crackdown on Bovada by states like Connecticut and Michigan marks a significant step in the effort to regulate the sports betting market in the US. As more states consider similar actions, Bovada faces increasing pressure to comply with state regulations or risk being locked out of the US market entirely. The outcome of these legal challenges will likely shape the future landscape of sports betting in the country.
