Los Angeles Takes Legal Action Against Stake.us Over Sweepstakes Gambling
Los Angeles Targets Stake.us for Alleged Illegal Sweepstakes Gambling
The city of Los Angeles has initiated a lawsuit against Stake.us, claiming that the company’s sweepstakes offerings are essentially illegal gambling disguised as promotional games. Alongside Stake.us, the city has also filed complaints against several gaming content providers, accusing them of supporting these unlawful operations.
Allegations Against Stake.us and Sweepstakes Model Criticism
Stake.us operates as the American branch of Stake.com, a global cryptocurrency-focused online gaming brand. It has come under scrutiny amid ongoing regulatory efforts across the United States aimed at curbing sweepstakes-based gambling platforms.
Sweepstakes operators typically use a dual-currency system enabling players to participate without direct payment, which they argue exempts them from gambling laws. However, regulators, commercial gaming officials, and tribal organizations have increasingly condemned this approach, labeling it illegal gambling. Consequently, many major sweepstakes providers are struggling to maintain their presence in the U.S. market, with some withdrawing from specific states.
California, in particular, is pushing for a complete prohibition of sweepstakes. In its complaint, the city of Los Angeles criticized Stake.us for marketing itself as a “social casino” while allegedly conducting unlicensed and hazardous gambling activities.
The lawsuit accuses Stake.us of misleading consumers, endangering their financial stability and mental well-being, and increasing the risk of gambling addiction. It also highlights concerns over the platform’s online accessibility, which allows 24/7 participation, heightening potential harms.
Additionally, the complaint argues that Stake.us’s unauthorized operations are draining money from Californians that could otherwise be spent on essential living expenses like rent, food, education, and healthcare.
Legal Measures and Accusations Against Providers
The legal action taken by Los Angeles aims not only to shut down Stake.us’s operations but also to compel the company to reimburse players for their losses.
An excerpt from the legal complaint states that the city seeks to end the harmful gambling scheme, recover lost funds for California residents, and impose penalties to prevent future violations.
Moreover, Los Angeles has extended its allegations to several casino content suppliers, including major names in the industry. These providers are accused of knowingly facilitating illegal gambling activities by supplying software and game content to operators like Stake.us.
