Stake.US Battles Charges of Running Illegal Online Casino

After a lawsuit was filed in the state of Alabama against Stake.US for running an illegal online casino site, the operator rebuked the claim. The lawsuit further claims that parties were injured due to losses sustained while using the iGaming site. The lead plaintiffs in the lawsuit are Laura Hall and her minor child, J.C., as well as other Alabama residents who are claiming illegal losses.

Under the promotion efforts of Drake, the popular rapper, Stake.US purports to be nothing more than a "sweepstakes" casino. Sweepstakes casinos allow customers to buy or earn sweeps coins that can be used to participate in iGaming tournaments or sweepstakes drawing for prizes, including cash. Therein lies the problem. The ability to win prizes or cash is by most reasonable definitions, gambling.

However, a Stake.us spokesperson told the ReadWrite.com:

"We reject the allegations made in this claim. Stake.us does not operate an online casino in Alabama. It operates a social casino with free-to-play games in compliance with all relevant local laws and regulations."

The same argument is being made in California and Illinois where similar class-action lawsuits have been filed.

The Basis of Contention

To win these lawsuits, plaintiffs must show two things: Stake.US is running an online casino operation, and residents of the applicable state were deceived and sustained damages.

In the body of the Alabama lawsuit, Stake.US is compared to the old-style Internet cafe gambling facilities that were popular about 10 years ago. These facilities would sell Internet time and or phone minutes, also providing tickets that were connected to a sweepstakes drawing for cash prizes. Participants were motivated to buy more time and minutes for more tickets, effectively gambling money to win cash prizes. These facilities did not pass legal muster and were eventually shut down.

Stake.US is being accused of using a two-tiered system to disguise the gambling component. They are selling virtual coins that can be used to play casino games of chance, and at the same time, they are offering cash prizes connected to the use of the virtual coins.

Note: Stake.US is owned and operated by Sweepsteaks Limited. The company also runs licensed iGaming sites and offers 200+ online casino games from some of the top online casino software developers in the world. The library includes iGaming categories like poker, slots, and table games.

The Drake Connection

Historically, Stake.US has turned to celebrities for promotional help with Drake being one of the operator's most dedicated players. The affiliation began in the early part of 2022 and continues today as the rapper often posts his bets on social media.

On the Stake.US website, customers are asked to “win big alongside Drake.” Lawyers for the plaintiffs are using this advertising moniker, claiming that it proves the operator is offering iGaming services where customers can win real cash.

For Stake.US, the risk is a loss in any of the 3 aforementioned states will result in more similar lawsuits in the future. The sweepstakes casino battle continues.