A First-of-Its-Kind Government Lawsuit
The Los Angeles City Attorney's office, led by Hydee Feldstein Soto, filed a civil enforcement suit against Stake.us and more than 20 affiliated entities on August 28, 2025 in Los Angeles Superior Court. The lawsuit represents the first direct governmental legal challenge against a sweepstakes casino operator, marking a significant escalation in the enforcement landscape.
The complaint alleges that Stake.us operates an illegal enterprise disguised as a "social casino," describing the platform as a "carbon copy" of the real-money Stake.com site. According to the filing, Stake.us uses the same games, the same user interface, and substantially the same backend infrastructure as its offshore counterpart while marketing itself as a legal alternative under the sweepstakes model.
Defendants and Scope
The lawsuit names an unusually broad set of defendants. In addition to Stake.us itself, the complaint targets game suppliers including Evolution, Hacksaw Gaming, Nolimit City, BigTime Gaming, and Red Tiger. The streaming platform Kick and its founders, Ed Craven and Bijan Tehrani, are also named as defendants, reflecting the role that livestreaming has played in promoting sweepstakes casinos.
This expansive approach mirrors the philosophy behind California's AB 831, which extends liability to the entire ecosystem supporting sweepstakes operations. By naming game suppliers and marketing partners alongside the operator, the City Attorney is attempting to establish that every entity profiting from the platform shares responsibility for its alleged illegality.
Financial Stakes
The lawsuit seeks recovery of all funds lost by California consumers on the Stake.us platform. The filing notes that Stake earned approximately $4.7 billion in gross revenue in 2024 across its global operations. Violations under California's Unfair Competition Law (UCL) carry penalties of up to $2,500 per violation, with penalties tripled for violations affecting seniors, disabled individuals, or veterans.
Given the potential volume of transactions on the platform, the total liability could run into the hundreds of millions of dollars. The per-violation penalty structure means that each individual play session or purchase could constitute a separate violation under the UCL framework.
Industry Implications
The lawsuit has sent shockwaves through the sweepstakes casino industry. Game suppliers named in the complaint now face the prospect of defending themselves in court, which could accelerate the trend of content providers withdrawing from sweepstakes platforms entirely. Evolution and Pragmatic Play had already begun pulling games from California-facing operators before AB 831 took effect.
For other operators, the case establishes a template that attorneys general and city attorneys in other jurisdictions could follow. If the LA City Attorney prevails, it would validate the legal theory that sweepstakes casinos constitute illegal activity under state consumer protection laws, regardless of their dual-currency structure.
What Comes Next
The case is proceeding through the LA Superior Court system. Stake.us has retained defense counsel and is expected to challenge the complaint on multiple grounds, including arguments that its model complies with applicable sweepstakes law. The outcome could take years to resolve, but the filing itself has already shifted the risk calculus for operators, suppliers, and affiliates operating in the sweepstakes space.