The Los Angeles City Attorney’s Office has initiated a major civil enforcement action against social casino Stake.us, its associated streaming platform Kick, co-founders Ed Craven and Bijan Tehrani, and numerous gaming suppliers.
The lawsuit, filed in California Superior Court, alleges that the companies operate an illegal online gambling enterprise that violates the state’s Unfair Competition Law and False Advertising Law.
The complaint seeks a permanent injunction to cease Stake.us’s operations in California, full restitution of all funds lost by residents, and civil penalties of up to $2,500 for each violation, which could rise to $7,500 for instances involving seniors or disabled persons.
Given the platform’s scale, the potential financial exposure could run into the hundreds of millions, if not billions, of dollars.
The action is being led by City Attorney Hydee Feldstein Soto, who is the first US government official to bring such a case against an online sweepstakes casino.
Prosecutors allege that Stake.us was deliberately designed as a “mirror” of the real-money gambling site Stake.com to circumvent California’s strict anti-gambling laws.
The lawsuit contends that the platform’s dual-currency system—where players purchase “Gold Coins” and receive redeemable “Stake Cash” as a bonus, is a thinly veiled mechanism for illegal real-money gambling disguised as a legal sweepstakes promotion.
This lawsuit represents the most significant legal challenge to the sweepstakes casino model in the US to date and signals a broader crackdown in California.
The City Attorney’s office is partnering with Susman Godfrey LLP, a litigation firm already pursuing a class action against VGW’s Chumba Casino, which may inspire other jurisdictions to follow suit.
The case could set a critical precedent as state lawmakers simultaneously debate Assembly Bill 831, which aims to explicitly prohibit online sweepstakes casino operations.
