The Los Angeles City Attorney has filed a lawsuit against sweepstakes operator Stake.us, streaming platform Kick, and game developers Evolution and Hacksaw Gaming, alleging that Stake.us ran an illegal gambling operation with support from the other parties.
By naming not only the operator but also its streaming partner and game providers, the Stake.us lawsuit signals an aggressive new enforcement strategy. It suggests prosecutors may increasingly hold both platforms and technology providers accountable, which may challenge partnerships moving forward.
One of the unprecedented aspects of the Los Angeles lawsuit is that prosecutors are extending their claims beyond operators. This shift places publicly traded gaming developers in unfamiliar territory, where they must defend not just their games but also their role in enabling sweepstakes casinos.
For companies like Evolution, valued at approximately €18 billion, a renewed spotlight from U.S. prosecutors could weigh heavily on investor confidence. Hacksaw is at about €2 billion, still in the early stages as a publicly traded firm, so they may be even more vulnerable to this lawsuit. Both Evolution and Hacksaw offer games to several sweepstakes casinos, including other longstanding operators like High 5 Casino.
The case suggests that suppliers could now be held directly accountable, rather than being treated as neutral technology providers. If Stake.us loses this case, game developers could become less willing to provide services to these operators.
The inclusion of Kick, one of the rapidly growing streaming platforms, is another unique aspect of this lawsuit. By targeting a distribution and marketing partner, prosecutors are widening their net to go at the sweepstakes industry.
As an exclusive partner to Stake.us, Kick has been integral in promoting the brand through sponsored content creators doing live streams of casino-related content.
If this lawsuit is successful, this could set a similar precedent where companies like Kick are no longer treated as neutral platforms but as active participants in platforms that may be deemed unlawful by state authorities. This is becoming increasingly more common, as the VGW lawsuit in California is also targeting a social media influencer who works with the platform.
Beyond the courtroom, the Stake.us lawsuit could influence how lawmakers and regulators approach the sweepstakes casino industry within California. The state has already advanced AB 831 with a gut and amend strategy, which changes the details of the bill to fast-track it through the process.
Similar lawsuits in California have been filed against major operators like VGW (owner of Chumba Casino and Global Poker) and Sunflower Ltd., which runs Crown Coins Casino.
These actions reflect a broader trend of state prosecutors pushing back against sweepstakes models, alleging that the dual currencies and prize redemptions are a workaround for unlicensed online gambling.
California is the largest market for sweepstakes casinos, accounting for a significant portion of overall revenue, making this legal battle at the forefront of the industry.
Aside from California, there are other lawsuits against sweepstakes casinos across the country. Pulsz and Thrillzz were forced to exit the Arizona market following a cease-and-desist order. Similar legal action was taken in Ohio, where a class action lawsuit was filed against prominent sweepstakes casino Crown Coins.
It’s a time when the sweepstakes industry is facing more legal pressure than ever before. The Stake.us lawsuit amongst other legal actions across the nation are reshaping the sweepstakes casino industry, which may lead to increased regulation or outright bans.
