GGPoker has decided to voluntarily withdraw its subscription-based sweepstakes social poker platform, ClubGG, from Michigan.
Michigan poker players received an email from the operator last week informing them that their accounts would be closed. GGPoker cited the regulatory climate in the state, which has turned decidedly unfriendly toward sweepstakes poker operators for the past year.
“We regret to inform you that due to recent changes in state law in your jurisdiction, we are no longer able to offer subscription game (Membership Zone) services to residents of your state,” the email said. “Unfortunately, this means that we must cancel your membership.”
ClubGG said players who reside outside of Michigan and who can prove their identity using the operator’s KYC protocols could have that change reflected in their memberships. Presumably, that means their memberships would not be cancelled by the operator.
Although it initially started as a private club-based poker app, ClubGG evolved and would eventually adopt a subscription-based model. Under this setup, players could enter online tournaments and ring games and win prizes that could be converted to real money — all without breaking the law, since ClubGG (and sites like it) operate under sweepstakes law, which differ from laws that govern traditional gaming.
Michigan Has Been Going After Sweepstakes Sites
Michigan has taken an aggressive posture against online poker and casino sites that follow the sweepstakes model for more than a year. AG Dana Nessel and the Michigan Gaming Control Board (MGCB) have combined forces to drive all sweepstakes operators, which they consider illegal gambling, out of the state.
Nessel kicked the crackdown off with a cease-and-desist letter to Golden Hearts Games (GHG) in September 2023. GHG quickly complied and to this day does not accept Michigan players. Experts in sweepstakes law say the company obeyed the AG’s directive because it wanted to avoid an expensive court fight.
In a preemptive move, Virtual Gaming Worlds (VGW) announced in October 2023 that it would start winding down its operations in Michigan, with plans to be completely gone by February 1, 2024.
VGW runs Global Poker and two sweepstakes casino platforms, Chumba Casino and LuckyLand Slots. Global Poker is the largest sweepstakes poker site in the world and Chumba Casino is one of the world’s largest sweepstakes casinos. Still, VGW wanted to avoid any problems with the MGCB or Nessel, so they left.
The MGCB also targeted Stake.us, the US-facing business of global sweepstakes operator Stake. Regulators sent a cease-and-desist letter to Stake.us in November 2023, accusing it “promoting an unlicensed online lottery and/or raffle for customers that buy its products through its internet website.”
Sweepstakes operators have been targeted by the MGCB in 2024, too. Last August, the regulator issued a cease-and-desist letter to One Country Give, an Arkansas-based platform that offers giveaways — including vehicles, real estate, vacations, and experiences — with a country and southern flair.
One Country Give departed the Great Lakes State after being given two weeks to leave before Nessel would take action.
“We are committed to upholding state law to ensure a fair and honest gaming environment for all Michigan citizens, and we will keep issuing cease-and-desist letters and taking appropriate legal actions to halt illegal gaming in the state of Michigan,” MGCB Executive Director Henry Williams said in a statement on August 27.
Other sweeps operators that appear to have left Michigan voluntarily include Fortune Coins Casino and Zula Casino. Both platforms are owned by Blazesoft Limited and exited the state on February 1, 2024.
Sweepstakes Operators That Have Left Michigan
- ClubGG
- Fortune Coins
- Golden Hearts Games
- One Country Give
- Stake.us
- VGW — which includes:
- Chumba Casino
- Global Poker
- LuckyLand Slots
- Zula Casino
AGA Has Been Gunning For Sweeps, Too
The American Gaming Association (AGA), which advocates for the legal, regulated real money gaming industry, has called for state regulators to level increased scrutiny on sweepstakes poker and sweepstakes casino sites.
Last August, the AGA issued a policy statement urging regulators and AGs to investigate sweepstakes operators “to determine whether or not these operators are in compliance with their respective laws and regulations and take appropriate if not.”
State lawmakers were also urged by the AGA to close any loopholes that sweepstakes casinos and sportsbooks could use to circumvent state gaming laws.
“Functionally, sweepstakes casinos look and play like an online casino while using a dual-currency system to avoid licensing and regulation,” the AGA said at the time.
Several sweepstakes operators have decided to band together to resist the AGA, on fears that the powerful lobbying group could convince more states to adopt an anti-sweepstakes posture. Eleven operators formed a trade group, the Social & Promotional Games Association (SPGA), last month. VGW is not a member of the group.
Shutting Down ClubGG a Smart Move
The decision to shut down ClubGG in Michigan was probably a smart decision.
Consider that the brand’s parent company, NSUS Group, owns GGPoker and agreed to purchase the World Series of Poker (WSOP) brand from Caesars for $500 million in August.
WSOP Online is a licensed operator for real money online poker in four states, including Michigan. In late May, player pools in all four states were combined to form a new network, WSOP Online.
With so much of its business dependent on keeping the MGCB and Nessel happy, NSUS likely decided that it would be better to take the preemptive step and shut ClubGG down.
