Stake.us is facing yet another legal battle over its US operation, amid claims that the operator’s sweepstakes casino offering in Alabama is a “sham” offering real money gambling.
A class action lawsuit has been filed against Sweepstakes Ltd., doing business as Stake.US, in Alabama on behalf of the plaintiffs, Laura Hall and her child. It claims that the child suffered harm from their mother losing her wages playing on the site.
The suit alleges that Stake.us is running an illegal gambling operation in Alabama even though the practice is “constitutionally and statutorily prohibited” in the state.
Stake coins
At the heart of the allegations is the dual-currency system of virtual coins used by players on the Stake platform.
Players can play free-to-play games using ‘Gold Coins’. However, when players buy more reserves of the gold coins, they are also awarded ‘Stake Cash’, which, when wagered, can be returned in the form of crypto payouts or cash-equivalent gift cards.
As these can be used or converted to currency, the suit now seeks a judgment that states Stake.US facilitates illegal gambling in Alabama.
It states: “Since Stake requires participants to submit consideration for a chance to win a prize, it is an illegal gambling operation. Stake gaslights its users, including vulnerable populations like minors and people struggling with gambling disorder, by claiming that the operation is a legal sweepstakes and does not involve real money gambling.”
In addition, the lawsuit continues, Stake.us has engaged in “unconscionable, false, misleading, or deceptive acts or practices” by leading the plaintiffs to believe Stake.us was approved and certified by the State of Alabama. On the platforms website, Alabama is not listed as an excluded territory, despite the fact that gambling is prohibited in the state.
Hall, her child, and other class members are seeking damages and declaratory and equitable relief. This includes “all Alabama residents who have paid and lost money or other things of value on Stake.us in the last six months.”
Stake faces court battles across the US
This is the third lawsuit regarding Stake.us’ social casino and sweepstakes that has been filed in recent weeks.
California resident Dennis Boyle is set to take action against the firm over similar allegations. He also claims that Stake.us offers online wagering that is falsely marketed as free gaming and, in doing so, the operator is violating California’s civil code by providing access to unlawful online gambling while also engaging in unfair business practices.
Meanwhile, Brayden Urdan, from Illinois, also claims that the dual-currency system used by Stake.us is a workaround to offer prohibited gaming through its dual-currency system.
The suit also examines consumer protection measures, as it claims Stake.us used similar marketing for its free and paid sites.
High-profile ambassadors
The Alabama suit also refers to the marketing efforts of Stake.us’ sister site Stake, including the use of high-profile ambassadors such as the Canadian rapper Drake.
In February, the star all but confirmed that a viral video of him being pestered by a drone was a marketing campaign for stake.
After the clip went viral, Drake posted on Instagram an image in which he is wearing a Stake-branded shirt alongside the caption: “The Stakes are high, but so am I.”
However, not all of the company’s marketing stunts have been quite as successful.
Earlier this year, the firm departed the UK market after an advertising campaign with the controversial adult film star Bonnie Blue sparked an investigation from the UK Gambling Commission.
Off the back of the investigation, TGP Europe Limited (TGP), which operated the site as part of a white-label arrangement, shut down the site on 11 March.
