Stake.us and suppliers face civil lawsuit in California over alleged illegal gambling

• California State Attorney and Los Angeles City Attorney sue Stake.us and multiple suppliers over alleged illegal gambling
• Lawsuit claims violations of California’s Unfair Competition Law, False Advertising Law, and other state gambling statutes
• Stake.us rejects allegations, while legislation may tighten restrictions on sweepstakes gaming in the state

The State Attorney of California, Hydee Feldstein Soto, and the Los Angeles City Attorney have filed civil lawsuits against Stake.us, its owners, and multiple gaming suppliers, alleging the company operates an illegal gambling business in the state.

The filings target Stake.us, streaming platform Kick, and suppliers including Evolution, Pragmatic Play, Hacksaw Gaming, and others, claiming breaches of the Unfair Competition Law (UCL) and False Advertising Law (FAL).

The California filings allege Stake.us, the American arm of Stake.com, has been serving players in the state since December 2022, offering online casino games using a dual-currency system of Gold Coins and Stake Cash. Gold Coins have no monetary value, while Stake Cash can be converted into cryptocurrency or gift cards. The suit claims the system allows real-money gambling under the guise of sweepstakes,

“Players then wager both types of coins in the hopes of winning more coins, which can be used either for additional bets or cashed out for real money in a one-to-one exchange,” states the lawsuit.

“That Stake.us claims the SC are ‘free’ does not make them valueless, and that the GC cannot be redeemed for cash does not make them valueless, either. Gambling with either is still gambling.”

The complaint also disputes Stake.us’ claim that it operates a social casino, noting free credits are effectively inaccessible because players must pay postage to claim them.

“Stake.us is not a social casino because it does not offer only free, just for fun games of chance. Instead, Stake.us provides players with the opportunity to exchange their real money for virtual casino chips, gamble those chips, and then convert the winnings back into cash. It looks like gambling, sounds like gambling, and feels like gambling because it is gambling,” the filing says.

Stake.us said:

“We have not been served at this time. However, we reject allegations that have been made in the media in relation to this potential claim and will vigorously defend this and all such claims.”

The lawsuits name multiple parties, including Stake.us owners Ed Craven and Bijan Tehrani, Kick Streaming Pty Ltd., Easygo Group Holdings Pty Ltd., Medium Rate N.V., and game providers such as Evolution AB, Big Time Gaming, NetEnt, Red Tiger, Nolimit City, and Hacksaw Gaming.

The filings allege these companies knowingly facilitated access to their games to Californians, aiding the operation of an illegal gambling enterprise. The complaint quotes Tehrani as saying Stake.com has “the highest [betting volume] in the world out of any casino, land-based or online,” according to Gaming America.

The civil penalties under California law include fines of up to $2,500 per UCL or FAL violation, tripled in cases involving seniors, veterans, or disabled persons. Los Angeles City Attorney filings also seek treble damages and restitution for California residents who lost money, and civil penalties up to $7,500 per violation in cases affecting vulnerable populations.

California represents a grey market for sweepstakes-style gaming, with operators such as Stake.us and VGW active despite ongoing legal and legislative debate. Proposed Assembly Bill 831, authored by Assemblymember Avelino Valencia (D-68), would criminalise sweepstakes operations, including game supply and affiliate marketing. The bill has passed the Assembly committee and is awaiting a Senate vote.

Tribal communities have been heavily involved in the debate. The California Nations Indian Gaming Association supports the bill, while three Tribes — Sherwood Valley Band of Pomo Indians, Big Lagoon Rancheria, and Kletsel Dehe Wintun Nation — have urged the Senate Appropriations Committee to reject it, citing potential economic harm to smaller communities.

Other sources note that similar lawsuits have been attempted previously, including Boyle vs Sweepstakes Limited, but were dismissed. Stake.us has also exited other US states including New Jersey, Delaware, and West Virginia.