As States Reexamine Social Casinos, What Could it Mean For New Jersey?

Written By Hannah Vanbiber on November 17, 2023
Image of social casino logos next to a microscope for story on if New Jersey will take action against social casinos like Chumba Casino

A company that operates online social casinos in nearly all US states is pulling out of Michigan, where online casinos are legal and regulated.

The Australian company, Virtual Gaming Worlds (VGW), said it would be shutting down its three Michigan sites: Chumba Casino, Luckyland Slots and Global Poker.

VGW said that they “continually evaluate their business operations in the interests of all their stakeholders, and after careful consideration, they have decided to take this course of action.”

Chumba Casino and other VGW casinos operate in all US states except for Washington, Idaho and now Michigan. Another social casino company, Golden Heart Games, was shut down in Michigan last month.

The question is, will New Jersey – rife with NJ online casinos that pay state taxes and abide by state regulations – follow Michigan’s lead and crack down on social casinos operating in the state?

Why social online casinos opted to exit Michigan

Dana Nessel, Michigan’s Attorney General, shut down a similar company to VGW last month: Golden Heart Games. She said that she considered it illegal gambling. It’s likely that VGW saw the writing on the wall.

“Unlicensed gaming robs our schools and our government of essential funding and leaves consumers unprotected,” Nessel said in a release.

“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.”

As for New Jersey, the Division of Gaming Enforcement told PlayNJ that it cannot confirm nor deny the existence of investigations into social online casinos. The DGE declined further comment.

What is a social online casino?

Essentially, social online casinos mimic real casinos but without being regulated by gaming control boards.

They do this through the simple loophole of having users wager digital currency instead of real cash. But users purchase the digital currency with real cash and can redeem their winnings for cash prizes.

The gaming sites are popular in states where online casinos aren’t yet legalized, since they provide an opportunity to have a casino-like experience online.

However, as more states consider legalizing online casinos, social casinos may come under the spotlight as an unregulated industry that’s essentially the same as gambling.

Are social online casinos legal in New Jersey?

Technically, yes. But that may be more a result of lawmakers ignoring social casinos rather than fully embracing them.

As New Jersey has legalized and regulated online casinos, lawmakers may want to turn their attention to these social casinos. They are essentially unregulated gaming operators. The state doesn’t get the same tax revenue from social casinos as they do from iGaming and NJ sports betting.

It’s likely that as states regulate the online gaming industry, they will adjust their approach to social online casinos.

Photo by PlayNJ
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Hannah Vanbiber

Hannah Vanbiber is a contributing writer for PlayNJ after starting her journalism career in Chattanooga, Tennessee. From covering local sports, entertainment and business in East Tennessee, Hannah now covers legal gambling for New Jersey and New York as well as covering women's sports and sports betting in the New York metropolitan area.

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