Plenty At ‘Stake’ With LA City Attorney Lawsuit Versus Operator
Los Angeles-based lawsuit runs parallel track to state lawmaker’s effort to ban sweeps casinos
2 min
As the saga of AB 831 continues to play out at the California legislative statehouse in Sacramento to determine the fate of online sweepstakes casinos in the Golden State, a lawsuit filed downstate in Los Angeles could also have lasting repercussions for the gaming industry.
Los Angeles City Attorney Hydee Feldstein Soto filed a civil enforcement lawsuit in California Superior Court on Aug. 28 against Stake.com and several of its suppliers and vendors, alleging the defenders are “running and/or aiding and abetting the running of an illegal online gambling enterprise” and saying the American-based website Stake.us “has deceptively portrayed itself to regulators and consumers as offering harmless gameplay when, in fact, it was and is an illegal online casino.”
“Under the moniker of ‘America’s Social Casino,’ and despite claims that it is just a game, Stake.us is a rogue and real money gambling racket with destructive repercussions for its players,” Soto said in a statement released Thursday. “We are holding Stake.us and its accomplices accountable for violating the law, targeting California for these illegal activities and facilitating addictive gambling behaviors.”
The naming of suppliers and vendors in the lawsuit by Soto, who also retained the legal services of Susman Godfrey — which has previously litigated class-action lawsuits against sweepstakes casinos in other states — is a new wrinkle. This calendar year has seen sweeps operators and proponents line up in multiple states against legislators and/or legal teams at or below the state level trying to find ways to maintain their market presence.
What Soto and the city allege
The lawsuit alleges Stake.com was “marketed to U.S. customers as a ‘social casino’ that does not permit ‘real money gambling.’” It called that “a ruse” and claims “Stake.us has deceptively portrayed itself to regulators and consumers as offering harmless gameplay when, in fact, it was and is an illegal online casino. Stake.us offers games that are designed to look and feel like traditional casino games in a traditional casino.”
The 64-page filing includes multiple images of Stake’s online offerings, showing roulette and slots as examples. It also shows offerings from Stake.us that virtually mirror the Stake.com website. Soto said Stake.com co-founders Bijan Tehrani and Ed Craven and their companies created Stake.us “because Stake.com could not easily enter the U.S. market, where online gambling is highly regulated or banned in most states.”
The filing claims Stake offers two types of currency, “gold coins (GC),” which have no real money value, and “Stake cash (SC),” which the lawsuit notes “can be redeemed for cryptocurrency or digital gift cards on a 1 SC to $1 basis.” It notes the SC is a “direct equivalent to traditional casino chips: they have a cash value, can be gambled like cash, and Stake.us agrees to exchange SC for the designated cash value.”
Soto argues that the claims the SC are “free” and the GC are unable to be redeemed for cash “does not make them valueless” since the player will lose or win coins based on wagers. She adds “that the casino has structured itself to take in players’ cash with only its left hand while paying out players with only its right hand does not convert gambling into something else.”
Adding suppliers and vendors
The most notable supplier and vendor listed among the defendants in the city’s lawsuit is Evolution. There are a total of 10 listings connected to the group, collectively labeled the “Evolution Defendants” in which they are defined as “alter egos.” The lawsuit details that Evolution AB, which wholly owns the other defendants via its Malta Holding, ensures unity of ownership.
They were added to the lawsuit in part because “Stake.us has achieved smashing financial success in large part due to the assistance of many accomplices,” and cited Stake’s public statement it generated $4.7 billion in total gross revenue in 2024 after winnings were paid out.
The lawsuit looks to have helped create a desired effect for the city: Both Evolution and Pragmatic Play have reportedly pulled their offerings from Stake.us for California-based users.
