On August 25, 2025, the city of Los Angeles filed a legal complaint against Stake.us, accusing the platform of disguising illegal gambling as sweepstakes. This lawsuit marks one of the most significant moves by a major city against the burgeoning sweepstakes industry in the United States. Stake.us, a significant player in this domain, operates as the US-centric arm of the international crypto iGaming company Stake.com. The complaint alleges that Stake.us’s operations are misleading and harmful to consumers.
The legal action is part of a broader crackdown on sweepstakes companies that have been growing across the United States. These operators utilize a dual-currency system that allows players to participate without direct monetary transactions, which they claim exempts them from traditional gambling laws. Despite this, numerous regulatory bodies, commercial gaming establishments, and tribal gaming entities have criticized the model, asserting it parallels illegal gambling activities.
In California, the stakes are even higher. The state has been actively pursuing policies to eliminate sweepstakes operations, a stance made clear in the recent lawsuit against Stake.us. Los Angeles’s complaint highlights the dangers of such platforms, emphasizing the risk of addiction and financial loss. The city alleges that Stake.us promotes itself as a harmless social casino while functioning as an unlicensed gambling platform, accessible around the clock, which increases the risk of problem gambling.
The city claims that Stake.us’s operations deprive Californians of funds that could otherwise go towards essential needs like housing, food, tuition, and healthcare. This argument forms a crucial part of the complaint, as it underscores the broader societal impact of the alleged activities. The city is not only seeking to shut down Stake.us’s operations but also aims to recover all financial losses incurred by players and impose severe penalties to prevent future violations.
In addition to Stake.us, Los Angeles’s legal action extends to several gaming content suppliers, including Evolution, Pragmatic Play, and Hacksaw Gaming. The city accuses these entities of acting as enablers, supplying content that facilitates the alleged illegal activities of Stake.us. This aspect of the lawsuit indicates a more comprehensive approach, targeting the ecosystem that supports and sustains the sweepstakes model.
There is a contrasting viewpoint that merits consideration. Some industry advocates argue that sweepstakes offer a legal alternative to traditional gambling, contending that they provide entertainment without the financial risks typical of conventional casinos. They claim these platforms have robust systems to promote responsible gaming and that the dual-currency system legally circumvents gambling prohibitions. Such proponents suggest that the industry’s critics overlook the enjoyment and social interaction these games offer.
However, opponents dispute this narrative, pointing to the lack of regulatory oversight and potential for exploitation. According to them, the fundamental problem lies in the accessibility and potential for misuse, as players might not fully understand the risks involved. The legal ambiguity surrounding sweepstakes further complicates the matter, creating a grey area that some companies exploit.
The current lawsuit could serve as a precedent-setting case, potentially reshaping the landscape for sweepstakes and similar platforms in the US. The outcome might influence regulatory approaches in other states, prompting a reevaluation of how these entities operate within the legal framework. The case highlights the tension between innovation in gaming and traditional regulatory mindsets, presenting a complex challenge for lawmakers and industry stakeholders.
As the case progresses, stakeholders from various sectors will be closely watching. The gaming industry’s future, especially companies like Stake.us that operate at the intersection of technology and gaming, may hinge on the court’s decision. For players and consumers, the case underscores the importance of understanding the legal and financial implications of engaging with such platforms.
Regardless of the outcome, this lawsuit is indicative of a growing trend among US cities and states to scrutinize and regulate the gaming industry more rigorously. It reflects an increasing awareness of the potential social and economic impacts of unregulated gambling-like activities. For now, the focus remains on Los Angeles and the unfolding legal battle, which could have far-reaching implications for the gaming industry across the nation.
Garry Sputnim is a seasoned journalist and storyteller with over a decade of experience in the trenches of global news. With a keen eye for uncovering stories that resonate, Alex has reported from over 30 countries, bringing light to untold narratives and the human faces behind the headlines. Specializing in investigative journalism, Garry has a knack for technology and social justice issues, weaving compelling narratives that bridge tech and humanity. Outside the newsroom, Garry is an avid rock climber and podcast host, exploring stories of resilience and innovation.
