California vs Stake.us: sweepstakes civil suit is lodged

Hydee Feldstein Soto has filed a civil suit on behalf of the People of the State of California vs Stake.us. 

California represents a grey market for sweepstakes with operator’s like Stake.us and VGW offering the product in the region despite the robust debates taking place over their status. 

AB 831 is a proposed bill that would outlaw sweepstakes, while this legal filing has taken aim at those already involved in the practice. 

Alongside Stake.us, a number of other parties are listed defendants, including senior Stake.us individuals and suppliers like Veriff, Evolution, Big Time Gaming, Red Tiger, Nolimit City, Hacksaw and HGIM – although VGW is not named in this suit, it may be next on the list.

The complaint is made on the grounds of alleged breaches of California’s Unfair Competition Law and False Advertising Law. 

The filing quotes founder and named defendant, Bijan Tehrani as saying that Stake.com has “the highest [betting volume] in the world out of any casino, land-based or online.”

It suggests that the creation of Stake.us and positioning of the brand as a social casino was a ruse, executed due to the difficulties of accessing the highly regulated – or often prohibitive – US market. 

This assertion is at least partially grounded in the premise that Stake.us designs its games to “look and feel” like a traditional casino, while at the same time not advertising itself as such in order to achieve compliance. 

Stake, in accordance with the structure of many sweepstakes in the US, offers ‘Gold Coins’ in lieu of real money.  

These have no inherent real money value and cannot be converted as such, but conversely ‘Stake Cash,’ which is given free with the purchase of some Gold Coin ‘bundles,’ can be used as credits to play otherwise free games and then be converted into genuine currency. 

Good to know: A similar case was brought against earlier in the year in the Boyle vs Sweepsteaks Limited case but the California judge refused to rule against Stake.us

The other defendants are suggested in this case to have played roles furthering the enterprise “with the common goal of facilitating and promoting gambling at the Stake.us casino by Californians.” 

There has long been talk that cases like these were likely to be brought eventually, and Stake.us has already previously pulled out of New Jersey, Delaware and West Viriginia among others. 

In California, the debate has heavily involved the state’s Tribes, who previously have been united in their opposition to sweepstakes style operations. 

Recently, three Tribes have appealed to the Californian Senate Appropriations Committee encouraging it to reject the bill to ban.  

There are fears that the bill will introduce unwarranted economic restrictions that may damage the revenue streams of smaller Tribal communities with less established gaming operations. 

Rory Calland

Visit Profile

Players trust our reporting due to our commitment to unbiased and professional evaluations of the iGaming sector. We track hundreds of platforms and industry updates daily to ensure our news feed and leaderboards reflect the most recent market shifts. With nearly two decades of experience within iGaming, our team provides a wealth of expert knowledge. This long-standing expertise enables us to deliver thorough, reliable news and guidance to our readers.