The Los Angeles City Attorney's Office has filed a major lawsuit against Stake.us, a site it claims offers illegal online gambling services.
The complaint cites violations of California’s Unfair Competition Law, False Advertising Law, and the Unlawful Internet Gambling Enforcement Act.
What is Stake.us?
Stake.us is a social sweepstakes casino platform that allows users in most US states to play virtual versions of casino games using Gold Coins and Stake Cash, instead of real money.
Accusations of Misleading Online Betting Practices
City Attorney Hydee Feldstein Soto argues that Stake.us is similar to Stake.com, a platform with international restrictions.
The lawsuit focuses on the site's use of a two-currency model, where players buy Gold Coins and earn Sweepstakes Coins that can be exchanged for prizes equivalent to cash. The city argues this setup disguises real-money gambling as a sweepstakes game.
"The People are filing this case to stop the Illegal Gambling Scheme by Stake from exploiting Californians, recover all funds lost by them, and impose penalties to prevent future wrongdoings," the lawsuit states.
The city wants to permanently stop Stake.us operations in California and seeks triple damages to compensate Californian participants affected by the alleged gambling activities.
Impact on the Online Gaming Industry
According to a report by SBC Americas, the lawsuit also targets major gaming companies like Pragmatic Play, which has already left the Social Casino Market in the U.S., Hacksaw Gaming, and Evolution, along with subsidiaries like Big Time Gaming, Red Tiger, and NetEnt. These companies are accused of knowingly supporting illegal activities by providing games to Stake.us.
Including compliance partners such as Veriff as active participants rather than passive service providers is notable. Observers suggest this lawsuit could have significant implications for the online gaming industry, especially for large, publicly traded companies like Evolution and Hacksaw, worth roughly $19 billion and $2 billion, respectively.
The lawsuit also accuses the streaming service Kick of supporting Stake.us by promoting content directed at Californians. Legal experts believe that if the lawsuit succeeds, it could increase regulatory scrutiny on platforms working with online gambling operators.
A Possible Turning Point for Sweepstakes Casinos
California is emerging as a key site for regulating the sweepstakes casino industry. This lawsuit comes as Assembly Bill 831, which would criminalize such platforms state-wide, is making progress.
According to the city attorneys, “By masking its real money gambling platform as ‘America’s Social Casino,’ Stake.US and Defendants create a predatory, dangerous gambling environment,” highlighting concerns about addiction and financial harm. They note that Stake.us offers over 1,900 games that are available 24/7.
This aggressive legal stance is in line with similar actions in states like Arizona and Ohio, where platforms like Pulsz and Thrillzz have either stopped operations or faced class-action lawsuits. The result of this case could set nationwide precedents, indicating a stricter approach against the sweepstakes casino model.
