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Popular sweepstakes casino operator Stake.us is facing another proposed class action lawsuit, with Alabama alleging that the site operates an illegal online gambling business and misleads residents about its legal status in the state.
The complaint, filed in the U.S. District Court for the Northern District of Alabama, was brought by several Alabama residents. It asks the court to bar Stake.us from offering its services in the state and to order the company to repay losses allegedly suffered by players.
Lawsuit says Stake.us misled Alabama players
According to the filing, Stake.us held itself out as a lawful option for Alabama users, even though the state constitution and criminal code impose some of the strictest anti-gambling rules in the country.
The plaintiffs argue that Stake.us functions as an online casino, offering slot-style and other casino-type games, and that its sweepstakes structure is a “legal fiction” designed to avoid Alabama’s ban on gambling.
The suit also notes that, at the time the plaintiffs used the site, Alabama was not listed among the locations excluded from play, despite the state’s longstanding prohibitions on casino-style gambling.
Complaint compares sweepstakes model to 2000s internet cafés
A central plank of the lawsuit is a comparison between Stake.us and the “internet café” model businesses that proliferated across parts of the U.S. in the early 2000s.
The Alabama complaint argues that Stake.us relies on a similar structure: users receive what appear to be sweepstakes entries, which they then wager on casino-style games. In the plaintiffs’ view, this makes Stake.us an unlicensed gambling operator rather than a compliant sweepstakes platform.
Alabama’s ‘deep-rooted’ anti-gambling policy is at the centre of the case
The complaint leans heavily on Alabama’s long-standing policy against gambling. It quotes state law to emphasise that “gambling is constitutionally and statutorily prohibited in Alabama” and asserts that the state has a “fundamental and deep-rooted public policy against gambling”.
Casino-style online gambling, including virtual slots, blackjack, roulette, and poker, is illegal under Alabama law. The plaintiffs argue that allowing Stake.us to operate in the state would undermine that policy by offering what they describe as “casino games by another name”.
The lawsuit also claims that Stake.us is “unlicensed and unregulated”, contrasting its status with that of land-based casinos and state-approved lottery products, which operate under direct oversight and must meet specific standards on consumer protection and transparency.
Part of a broader wave of litigation against Stake.us
The Alabama filing is the latest in a growing line of legal actions targeting Stake.us and similar sweepstakes platforms.
Earlier this year, a federal case in California accused Stake.us of operating an illegal online casino under the guise of a free sweepstakes model. That case has since been sent to arbitration, allowing the site to continue operating in the state while a private arbitrator considers the claims. Another proposed class action in Illinois alleges that Stake.us runs an unlawful gambling operation under state law.
Taken together, the lawsuits signal increasing pressure on the sweepstakes casino sector.
For now, the Alabama action remains at an early stage. The court will have to decide whether the plaintiffs’ arguments are enough to overcome Stake.us’s position that it operates as a lawful sweepstakes under federal and state rules.
Source: Deadspin
