The city accuses the operator and several suppliers of operating illegal gambling.
US.- The City of Los Angeles has lodged a civil enforcement lawsuit against Stake US, its parent companies and several igaming suppliers. Filed at a California superior court, the lawsuit could become a landmark case in US authorities’ stance against so-called sweepstakes casino offerings.
Los Angeles’ attorney general accuses Stake of operating an illegal gambling scheme presented as “America’s Social Casino.” They say it offers over 1,900 games 24/7, including slots, table games and live dealer games, a typical sweepstake casino dual currency system through Gold Coins exchangeable for Sweepstakes Coins redeemable for real cash.
The city alleges that Stake’s platform intentionally misrepresents itself, attracting players from broad demographics and exposing them to risks equal to those of real-money casinos. The lawsuit describes Stake’s platform as “pernicious and addictive”.
Los Angeles’ aim in Stake lawsuit
The city lawyers want the court to order Stake to cease operations, and they also seek the refund of all player losses and the imposition of civil penalties against Stake and its partners.
While several US states have now passed or are in the process of passing legislation to ban sweepstake casinos, the lawsuit is one of the toughest measures yet and it shows a shift towards taking action against suppliers as well as operators. The city’s lawsuit argues that suppliers’ content fuels an illegal gambling ecosystem.
California’s AB 831 bill, which is still pending, would explicitly place a legal liability on providers that distribute content to sweepstakes casinos.
With the social casino model increasingly under scrutiny in other US jurisdictions, it’s possible that other city’s and states could follow LA with legal action of their own.
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