Stake.us Hit with Legal Challenge in Alabama Over Alleged Casino-Like Games

Online sweepstakes platform Stake.us now finds itself in hot water in Alabama, as a class action lawsuit has been brought against its owner, Sweepstakes Limited. The legal action, filed on May 2 in federal court, claims the site provides casino-type games to people in the state under the cover of a sweepstakes model.

Alabama Family Leads Lawsuit Against Stake.us, Alleging Illegal Online Casino Operations

Laura Hall, her underage child J.C., and other plaintiffs are suing Stake. They claim they lost money through Stake’s activities, and thousands more in Alabama might have also lost money. They say Stake.us gets around the state’s strict anti-gambling laws. The company does this by using a system that looks like gambling but calls itself a legal sweepstakes.

The lawsuit focuses on how the platform uses two types of money. Users buy “Gold Coins” to have fun, but these purchases also include “Stake Cash.” People can trade this for cryptocurrencies or gift cards. The plaintiffs argue this turns Stake.us from a harmless game into an unlicensed casino. They say it is similar to the banned “internet café” gambling spots from the early 2000s.

The lawsuit states Stake runs more than 200 online games, including slots, poker, and other casino-style table games. The legal action also claims these offerings break Alabama law, which bans such games and has no state lottery or commercial casinos.

Class Action Says Stake.us Uses Drake’s Fame to Blur Line Between Promotion and Gambling

Making the issue more contentious is Stake’s marketing strategy. The legal complaint points out its high-profile team-up with Canadian rapper Drake, who often shows up in ads urging users to play with him. The plaintiffs say this muddles the distinction between celebrity endorsement and gambling promotion when the company insists it does not enable real betting.

Alabama’s tough stance on gambling makes this case stand out. Unlike states with looser gaming laws, Alabama bans almost all forms of betting, including online casino-style games. The lawsuit claims that Stake.us takes advantage of a legal gray area by not putting Alabama on its list of restricted areas, which lets residents take part in what the plaintiffs say is illegal gambling.

This is the third class action against Stake.us, with cases also going on in California and Illinois. While no court has yet ruled against sweepstakes-based platforms like Stake, the growing number of challenges might mean a change in how US law looks at these operations.

The plaintiffs want compensation and a lasting court order to stop Stake from operating in Alabama.