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The Los Angeles city attorney’s office has filed a groundbreaking lawsuit against sweepstakes operator Stake.US. In addition to the operator, the case also targets the platform’s partners, including its streaming partner Kick and 12 game providers — an unprecedented move.
The operator and its partners are accused of violating California’s Unfair Competition Law and False Advertising Law. At the center of the prosecutor’s argument is the platform’s dual-currency model, in which players can purchase Gold Coins with real money and redeem Sweeps Coins for prizes such as cryptocurrency and gift cards.
This is not the first lawsuit of its kind against a sweepstakes casino, but it is the first filed by a U.S. public official. The case against the operator is strong, and the penalties could be severe. Beyond that, the lawsuit could carry major implications for the sweepstakes casino industry at large.
Stake.US: The dual-currency model at the center of the LA lawsuit
Stake.US markets itself as a sweepstakes platform where users can play casino-style games for free. Because of this, it is not subject to California’s gambling laws. However, Los Angeles City Attorney Hydee Feldstein Soto argues the site is essentially a clone of Stake.com, its sister platform that operates as a real-money online casino and sportsbook.
Stake.com is blocked across most U.S. states because of its real-money gambling operations. By contrast, Stake.US has been able to operate across much of the country under the sweepstakes model.
But legal experts say the sweepstakes model itself has long been on shaky ground. In a February 2025 Forbes op-ed, gaming law attorney Daniel Wallach wrote that sweepstakes casinos “have continued to operate unimpeded, despite their dubious legality,” while noting that state attorneys general are increasingly eyeing enforcement actions. Wallach also pointed to at least 15 court decisions finding that casino-style sweepstakes awarding entries tied to money spent qualify as illegal gambling, even when a free entry option exists.
The lawsuit against Stake.US makes a similar case. Prosecutors argue the site’s dual-currency system—Gold Coins and Sweeps Coins—functions as a workaround for unlicensed online gambling. While players receive a limited number of Gold Coins for free each day, they can buy more if they run out, introducing a direct cash element. Sweeps Coins, meanwhile, can be redeemed for cryptocurrency, gift cards and other prizes, giving them real-world value.
Lawsuit expands to game providers and streaming platform Kick
The lawsuit also targets Stake.US partners and affiliates. It specifically names game providers such as:
- Evolution
- Big Time Gaming
- Red Tiger
- Hacksaw Gaming
- NetEnt
It also names streaming platform Kick, which promotes the site. Stake co-founders Bijan Tehrani and Ed Craven are included as well.
The move to charge Stake.US partners and affiliates is unprecedented. Until now, such partners have generally been treated as neutral third parties. This case could shift that perception, encouraging other state authorities and private litigants to cast wider nets when filing lawsuits.
The expanding legal fight against sweepstakes casinos in the U.S.
This is not the first lawsuit against Stake.US, nor is it the only case involving sweepstakes casinos in the United States. As noted in a Times Now World article, Stake.US is also fighting a similar lawsuit in Illinois, where resident Brayden Urdan accuses the platform of violating consumer protection and gambling laws. Again, the dual-currency system is at the heart of the dispute.
Crown Coins, another major sweepstakes casino, faces a class-action lawsuit in Ohio. Elsewhere, Arizona regulators forced Thrillzz Casino and Pulsz Casino to exit the state with a cease-and-desist order.
Legal observers say these private lawsuits are part of a broader national trend. Wallach notes that most enforcement to date has come through civil litigation rather than state action, but those cases often drag on for years and are frequently settled out of court to avoid precedent-setting rulings. That dynamic underscores why the Los Angeles lawsuit is different: it represents one of the first times a public official has directly taken on a sweepstakes casino, potentially setting the stage for more aggressive state enforcement nationwide.
The high stakes of the LA lawsuit for Stake.US and its partners
While this is not the first case against Stake.US, it may carry the most significant consequences for both the company and the broader sweepstakes casino sector. The operator and its partners could face fines in the hundreds of millions of dollars. The suit also seeks restitution for players who lost money, with civil penalties of up to $2,500 per violation — and up to $7,500 for violations involving seniors and people with disabilities.
Stake.US partners could also face major financial losses. According to a news article by AInvest, some game providers are already feeling the impact: Evolution’s stock dropped 2.5% within days of the lawsuit, while Hacksaw’s fell 4.4%. Their reputations have also taken a hit.
In addition to financial penalties, prosecutors are seeking a permanent injunction to shut down all Stake.US operations in California. If successful, the case could make other providers and third parties more reluctant to work with sweepstakes casinos, fearing legal exposure. The result could severely weaken their business model — and potentially reshape the future of sweepstakes casinos across the U.S.
