Stake.us faces groundbreaking lawsuit from LA City Attorney

Stake.us is facing another serious legal battle after the Los Angeles City Attorney’s Office filed a lawsuit accusing the platform and its affiliates of breaching California’s gambling and advertising laws.

The case not only targets Stake, but also its co-founders Ed Craven and Bijan Tehrani, streaming partner Kick, leading suppliers Evolution and Hacksaw Gaming, and 12 other partners, as the prosecutors allege the group operated an illegal online gambling enterprise in violation of the state’s Unfair Competition Law (UCL) and False Advertising Law (FAL).

LA City Attorney Hydee Feldstein Soto filed the complaint this week at the California Superior Court, making her the first U.S. official to bring civil enforcement against an online sweepstakes casino.

The lawsuit seeks a permanent injunction to halt Stake.us operations in California, restitution for residents who lost money, and civil penalties of up to $2,500 per violation. For cases involving seniors or disabled persons, penalties could rise to $7,500 each, exposing Stake to potential liability in the hundreds of millions and even billions of dollars.

According to filings, Stake.us was designed as a “mirror” of Stake.com, its international casino and sportsbook blocked in most U.S. states.  The site’s dual-currency model, where players purchase Gold Coins and receive bonus Sweeps Coins redeemable for gift cards or cryptocurrency, is alleged to disguise real-money gambling under a sweepstakes format.

In addition to Stake, the complaint also names game suppliers including Evolution, NetEnt, Red Tiger, Big Time Gaming, and Hacksaw Gaming. Observers note this move signals regulators’ willingness to hold not only operators but also B2B providers accountable for enabling unlicensed gambling.

This isn’t the first time Stake.us has come under legal scrutiny. The company is already facing lawsuits in California, Illinois, and Alabama, where it is accused of deceptive practices and operating an illegal casino disguised as a sweepstakes platform.

With illegal gambling already estimated to represent a third of the U.S. market, suppliers and operators alike now face heightened scrutiny, which could potentially cause severe financial and reputational consequences.