The Los Angeles City Attorney's Office has officially filed a civil enforcement lawsuit against the online lottery casino platform Stake.us and its 21 partners. This is the first legal action taken by the U.S. government against lottery casino operators.
The Los Angeles City Attorney accuses Stake.us, its affiliated platform Kick, and co-founders Ed Craven and Bijan Tehrani of operating illegal online gambling
The lawsuit seeks a permanent injunction, compensation for losses to California players, and a civil penalty of up to $7,500 for each violation
Several third-party game providers are also listed as defendants, accused of assisting in fraudulent activities
This case is considered the first enforcement case against a lottery casino in the United States and may set the tone for broader actions in California
The lawsuit is filed by the California Superior Court, covering Stake.us, Kick, its two founders, and more than a dozen internationally renowned game developers. The charges are based on California's Unfair Competition Law (UCL) and False Advertising Law (FAL), targeting their alleged operation of illegal online gambling businesses.
The prosecution requests the court to issue a permanent injunction to stop Stake.us's services in California, demands the return of funds lost by California players, and imposes a maximum fine of $2,500 per violation. If involving elderly or disabled individuals, the fine limit rises to $7,500. Given the large scale of the Stake platform, potential fines could reach hundreds of millions or even billions of dollars.
This case is led by Los Angeles City Attorney Hydee Feldstein Soto, the first woman and Latina to hold this position and the first U.S. government official to file a civil enforcement lawsuit against a lottery casino. Her office, in collaboration with Susman Godfrey LLP, is advancing the lawsuit, which has previously represented plaintiffs in nationwide class actions against Chumba Casino and Luckyland Slots operators Virtual Gaming World (VGW). Industry insiders believe this collaboration signals a new round of legal battles in California.
The complaint states that Stake.us is essentially a "mirror version" of Stake.com (an international casino and sports betting site blocked in most U.S. regions). Its interface, slot machines, table games, and promotional mechanisms are almost identical. Players purchase "Gold Coins" which have no cash value but receive additional "Sweep Coins" that can be exchanged for gift cards or cryptocurrencies, which the prosecution deems a "dual currency system" that masks the reality of cash gambling.
In addition to Stake.us and Kick, Evolution, NetEnt, Red Tiger, Big Time Gaming, Hacksaw Gaming, and other game providers are also named for allegedly providing technical and content support. The Kick platform is also accused of promoting related gambling content to users in California, expanding the impact of the case.
California has long been vigilant against lottery casinos. Regulatory authorities say these platforms are identical to the "internet lottery cafes" banned over a decade ago. At that time, stores bundled lottery tickets with phone or internet time, allowing players to participate in slot machine gambling, ultimately deemed illegal by the courts. Since 2015, California has explicitly banned lottery cafes, but their online successors continue to operate in a gray area. The current state legislature is considering Bill 831, aimed at extending the ban to online lottery casinos.
However, industry representatives like VGW and the "Social Gaming Leadership Alliance" publicly oppose, insisting that the platforms offer a free game mode that meets consumer protection standards. But regulators believe their nature is no different from traditional gambling.
This lawsuit is significant not only because it involves multiple entities and high amounts but also may serve as a reference for future enforcement. Under California law, private players cannot sue to recover gambling losses alone; only government attorneys can represent the public in such lawsuits. Through collaboration with Susman Godfrey, Feldstein Soto may open new avenues for other California local prosecutors to handle similar cases.
It is currently unclear whether this case will evolve into a statewide unified enforcement strategy. But undoubtedly, for Stake.us, Kick, and the broader lottery casino industry, this lawsuit has become the most severe legal challenge to date.
