The city of Los Angeles has launched a legal complaint against Stake.us, alleging that its sweepstakes products are illegal gambling in disguise. The city has likewise launched complaints against several content suppliers, accusing them of enabling illegal operations.
LA Says Stake.us Offered Illegal Gambling
Stake.us, which is the US-facing social casino subsidiary of the global crypto iGaming brand Stake.com, has found itself under fire amid America’s continued crackdown on sweepstakes operators.
Sweepstakes leverage a dual-currency system that allows customers to play for free and therefore claim that their products do not constitute gambling. Unfortunately for the industry, regulators, commercial gaming stakeholders and tribal entities alike have spurned the sweeps model, slamming it as illegal gambling. As a result, the biggest sweepstakes companies have found it increasingly difficult to navigate the US space, with some opting to exit certain states.
California, in particular, has sought to usher in a complete ban on sweepstakes. In the meantime, in its complaint against Stake.us, Los Angeles has critiqued the operator for presenting itself as “America’s Social Casino” while offering dangerous, unlicensed gambling.
The complaint alleged that Stake.us has been misleading local players, jeopardizing their financial and mental health, and exposing them to problem gambling risk. The city furthermore emphasized that Stake.us’ online nature makes it easily accessible 24/7, making it even more dangerous.
The complaint further asserted that Stake.us’s unlicensed gaming operations are depriving Californians of money that they could otherwise use for rents, food, tuition, medication, etc.
Providers Also Under Fire
Los Angeles’s complaint seeks to force Stake.us to shut down. In addition to that, the city hopes to force the sweepstakes operator to refund all player losses.
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.
Complaint excerpt
Stake.us isn’t the only company to find itself in hot water. LA has directed some of its ire toward casino content suppliers, such as Evolution, Pragmatic Play, and Hacksaw Gaming, alleging that they are accomplices who have been enabling and supporting illegal gambling.