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Stake.us is set to face yet another legal battle in the US, with the city of Los Angeles launching a lawsuit against the operator and several of its major suppliers for allegedly running illegal gambling operations.
The civil action, filed in California Superior Court, targets the US arm of the global crypto casino known for its sweepstakes model. The city is asking the court to shut down operations and require the company to refund player losses.
“By masking its real money gambling platform as “America’s Social Casino,” Stake.us and Defendants create a predatory, dangerous gambling environment,” LA lawyers wrote.
“This deliberately misleading environment draws in Californians across demographics, exposes them to substantial risks of gambling addiction, jeopardizes their and their families’ financial and mental health, and otherwise presents the type of hazards that California’s anti-gambling laws are intended to prevent.”
This lawsuit is another in the long line of legal moves made by state regulators to regulate or eliminate the sweepstakes gaming model. Assemblymember Avelino Valencia‘s bill to ban sweepstakes casinos is currently being considered by the California Senate.
Stake.us is a Real Online Casino, Suit Claims
The case asserts that Stake.us operates as a genuine online casino, backing this claim with details about its design and offerings. The platform resembles traditional gaming sites, offering over 1,900 games that include slots, table games, live dealer options, and exclusive titles.
Additionally, the lawsuit highlights the site’s dual currency system, common with sweepstakes casinos. Players purchase Gold Coins and receive free Sweepstakes Coins, which they can later redeem for real money.
LA’s complaint continued: “…Stake.us is especially pernicious and addictive because players can access the casino 24 hours a day, seven days a week, directly from their mobile phones or computers.
“Money that would otherwise be used to pay for rents, mortgages, utilities, food, clothing, school supplies, college tuition, and medical care goes instead to the Stake Illegal Gambling Scheme.
“The People therefore bring this action to stop the Stake Illegal Gambling Scheme from continuing to prey on Californians, recover all funds lost by Californians, and impose civil penalties on Defendants to deter future misconduct.”
This legal battle is not Stake.us’s first in the US regarding its sweepstakes model; the company is currently facing several class action lawsuits, including one based in California. However, the chances of success for these class actions appear slim, given the numerous obstacles that such cases typically encounter.
Evolution, Pragmatic Play, Other Top Providers Named as Accomplices
The lawsuit against Stake.us also brings attention to a number of leading iGaming suppliers, labeling them as “accomplices” in the alleged illegal operations. Among those named are well-known companies like Evolution, a leader in live casino gaming, and Pragmatic Play, a major content provider.
The legal filings highlight additional game developers, such as Hacksaw Gaming, Red Tiger, NetEnt, NoLimit City, and Big Time Gaming. Notably, Pragmatic Play’s operations through Veridian and Tamaris in Gibraltar are cited, along with Hacksaw’s subsidiaries in Malta and the Isle of Man.
The case asserts that these suppliers knowingly licensed their games to a platform that the Los Angeles City Attorney views as an unlicensed casino.
According to analysis from Malta Media, this situation raises significant questions about the responsibilities of game suppliers. Given that Evolution and Hacksaw are not just minor players but central providers, the risks associated with their involvement are significant.
If the courts determine that suppliers can be held accountable for the actions of their licensees, it could lead to a major reassessment of the supplier model in online gambling. Many companies have relied on the defense that they only deliver technology, distancing themselves from the gambling aspect, but the LA lawsuit challenges that distinction.
Source: NEXT.io
