Published: July 7, 2024

The West Virginia Lottery sent a cease-and-desist letter to Bovada, an unregulated online casino and sportsbook based outside the US

The West Virginia Lottery, which oversees West Virginia online casinos and sports betting, has made it clear that Bovada, an unregulated online casino and sportsbook based outside of the United States, is not welcome in the Mountaineer State.

The lottery sent a cease-and-desist letter to the operator late last month, according to Legal Sports Report, telling Bovada to either stop allowing those located in West Virginia to gamble or face legal action.

West Virginia is one of several states that have taken an active approach to shutting down unregulated online gaming within its borders.

PlayUSA submitted a Freedom of Information Act request to obtain a copy of the letter but has yet to receive it.

Key takeaways

  • The West Virginia Lottery sent a cease-and-desist letter to offshore online casino and sportsbook Bovada.
  • Bovada faced a similar situation in Michigan and chose to stop its operations there.
  • Offshore online casinos and sportsbooks generate an estimated $500 billion a year in bets.
  • Online casino revenue lost to Bovada’s illegal operation results in lost tax revenue for several state programs.

Will West Virginia’s cease-and-desist letter work?

Bovada will likely agree to stop setting up new accounts and accepting bets from customers within West Virginia’s borders.

The offshore online casino and sportsbook faced a similar situation in Michigan and agreed to leave the Wolverine State. Michigan’s online casino revenue is typically at least four times as high as West Virginia’s, so if Bovada is willing to give up its Michigan income, West Virginia shouldn’t be a problem.

Connecticut and Colorado have also sent cease-and-desist letters to Bovada. The offshore site agreed to stop doing business in Colorado. We should see the same thing happen in Connecticut, too.

In addition to Colorado and Michigan, Bovada is no longer available in Delaware, Maryland, Nevada, New Jersey and New York.

Why Bovada and other illegal online casino operators pose a risk

The issue of offshore operators affects states, their residents, and visitors. Their impact comes down to two main areas: tax revenue and consumer safety.

Because offshore sites are unregulated, they don’t pay taxes on the revenue they generate in West Virginia. All regulated casinos operating in the state must pay a 15% tax on their revenue. The state sends that tax revenue to key state programs for schools and education, senior citizens, tourism, and state parks.

When illegal online casinos take deposits and bets from West Virginians, state programs miss out on valuable revenue.

But it’s not just state programs that lose out. Because Bovada’s online casino is unregulated, it can refuse to pay out online casino winnings without any consequences. Whereas regulated US online casinos would face penalties for such a move, Bovada wouldn’t.

State regulations also spell out vetting processes for online operators, rules for online casino staff, and standards for geolocation (services that ensure people logging into a West Virginia online casino are located within WV state borders). Because Bovada is an offshore entity, it doesn’t have to follow any of those rules.

While it’s unknown exactly how much people in West Virginia wager on Bovada, it’s an established fact that offshore operators attract massive amounts of action and revenue.

2022 report from the American Gaming Association estimated that offshore online casinos take an estimated $337.9 billion in bets every year, generating a projected $13.5 billion in untaxed revenue. Based on that data, the AGA estimated that states lose around $4 billion in tax revenue yearly due to illegal online casinos like Bovada.

What’s next for Bovada in West Virginia?

Cease-and-desist letters typically provide a deadline by which the recipient must cease its activities or face legal action. Michigan’s letter to Bovada included a 14-day deadline.

West Virginia’s letter likely included a similar, if not equal, deadline. If two weeks is the timeframe, Bovada would have until this week to stop its operations in West Virginia.

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