Popular sweepstakes casino operator Stake.us is facing a lawsuit in Alabama, which alleges that the site misled users into thinking it was available within the state as a legal platform.
The suit, initiated by a few Alabama residents, calls for Stake.us to be banned from the state and pay back financial losses incurred by the plaintiffs.
This suit challenges the legality of Stake.us’ sweepstakes model, comparing it to internet cafes, whose operations were a way to avoid gambling laws over 20 years ago.
“These operations – often located in suburban strip malls – ‘promoted’ the sale of products such as Internet time or long-distance telephone minutes by offering ‘free’ sweepstakes entries to customers. When customers purchased the product, they received a corresponding number of ‘sweepstakes’ points for each dollar spent. Customers then used those sweepstakes points to play ‘casino-style’ slot machine games for cash prizes,” the suit states.
However, there are some differences between Stake.us and Internet cafes.
With Internet cafes, customers were required to make a purchase to obtain sweepstakes points which would be used to gamble. In contrast, users cannot purchase “Stake Cash”, the main virtual currency used as free promotional entries to play games for a chance to win cash prizes.
Based on the official platform, users have several ways to obtain free Stake Cash, including the following:
The methods listed do not require a purchase, which is a difference that separates Stake.us from internet cafes of the past.
In addition to this comparison, the suit also claims that Stake is unregulated.
The suit states, “Although the casino gaming industry is one of the most regulated businesses in the United States, online gaming websites like Stake.us are unlicensed and unregulated.”
Sweepstakes laws, unlike real money casinos, require that free entry is provided to each user. In Stake.us’ case, this includes the welcome bonus, daily login bonus, and other promotions.
Additionally, the Stake.us site states that it adheres to security protocols like SSL encryption to protect user data during financial transactions.
The sweepstakes gaming site also gives users access to responsible gaming tools, including limits on gaming sessions and the opportunity to take a temporary or permanent break from the platform.
Despite these measures, Alabama’s state anti-gambling policy still adds legal challenges to Stake.us operations within the state.
The suit says that “gambling is constitutionally and statutorily prohibited in Alabama.” Online casinos with games like slots, blackjack, roulette, and poker are illegal. “Alabama has a fundamental and deep-rooted public policy against gambling” is a key phrase also mentioned.
Alabama was not listed as an excluded location at Stake.us in the suit.
This is the third lawsuit Stake.us has faced this year, with others coming in California and Illinois.
