The Los Angeles City Attorney’s Office has filed an unprecedented civil enforcement lawsuit against Stake.us, Kick, its co-founders Ed Craven and Bijan Tehrani, and 21 additional defendants. The case was filed in California Superior Court and became the first civil enforcement action against an online sweepstakes casino operator in the United States. 

City Attorney Hydee Feldstein Soto seeks to permanently halt Stake.us’s operations in California and secure restitution for players who lost money on the platform. The complaint seeks civil penalties of up to $2,500 for each violation of California’s Unfair Competition Law and False Advertising Law, with fines increasing to $7,500 per violation when seniors or disabled persons are involved.

Allegations of Illegal Gambling Scheme

According to filings, Stake.us was designed as a mirror image of Stake.com, the international casino and sportsbook blocked in most U.S. jurisdictions. Prosecutors allege the platform intentionally bypassed state gambling laws by offering Californians slot-style and table games under the guise of sweepstakes promotions. 

The dual-currency system, where players buy Gold Coins and receive bonus Sweeps Coins, is cited as evidence of real-money gambling disguised as promotional play. Kick Streaming, founded by Stake’s executives, is also accused of promoting the gambling operation to Californians.

Suppliers and Wider Industry Impact

Aside from Stake.us and its founders, the lawsuit targets a range of third-party gaming suppliers, including Evolution, NetEnt, Red Tiger, Big Time Gaming, and Hacksaw Gaming. This wide net highlights the potential exposure across the supply chain, with penalties possibly amounting to hundreds of millions or even billions of dollars. 

The case highlights growing scrutiny of the sweepstakes casino model, which regulators argue closely resembles the internet sweepstakes cafes banned across the United States in the early 2000s. California prohibited such cafes in 2015, yet their online counterparts keep thriving in a legal grey area.

Potential Ripple Effects Across California

Legal experts suggest that this case may serve as a blueprint for further enforcement efforts across California. Feldstein Soto has partnered with Susman Godfrey LLP, the same litigation firm leading a nationwide class action against Virtual Gaming World. 

By aligning with experienced sweepstakes litigators, the Los Angeles City Attorney could be paving the way for other city and county officials to pursue similar actions. Meanwhile, California lawmakers are considering Assembly Bill 831, which seeks to explicitly ban online sweepstakes casinos. With legal and legislative pressure mounting, the lawsuit against Stake.us signals the start of a coordinated statewide regulation on the industry.