Stake.us faces Illinois lawsuit

Stake.us, a prominent sweepstakes-style online casino, is facing a class action lawsuit in the US District Court for the Northern District of Illinois.

The lawsuit, filed by Illinois resident Brayden Urdan, accuses the platform of operating as an unlicensed online casino under the guise of a ‘social casino’.

This legal action follows a similar lawsuit filed in California and is spearheaded by the same law firm that recently won a $25m (~£19.3m) judgment against High 5 Games in Washington state.

The central claim of the lawsuit is that Stake.us is a ‘virtual clone’ of its real-money counterpart, Stake.com, rebranded to evade U.S. gambling regulations.

According to the complaint, Stake.us uses a dual-currency model involving ‘Gold Coins’ for casual gameplay and ‘Stake Cash’, which can be redeemed for real money. This setup allegedly disguises real-money gambling as harmless entertainment.

“They’ve wisely identified several vulnerabilities in Stake’s business model, most notably the nearly 1:1 correlation between real money spent and ‘Stake Cash’ received,” noted gaming attorney Daniel Wallach, who has been closely following the case.

The lawsuit also highlights Stake.us’s aggressive marketing tactics, including partnerships with high-profile celebrities like Drake and UFC fighter Israel Adesanya. These endorsements allegedly normalise gambling and mislead consumers into believing the platform is safe and risk-free.

Illinois has become a hotspot for gambling-related lawsuits due to its unique Loss Recovery Act. This statute allows individuals to recover gambling losses and even seek treble damages if the original loser does not file suit within six months.

“There’s a good reason why Illinois is the gambling class action lawsuit capital of the United States,” Wallach explained. “It has a very favourable ‘loss-recovery’ statute that allows for the recovery of treble damages.”

This lawsuit adds to growing scrutiny of sweepstakes casinos across the United States. Platforms like Stake.us have faced criticism for exploiting legal loopholes to operate without proper licensing.

The case draws parallels to the High 5 Games lawsuit in Washington, where courts ruled that social casino models breached state gambling laws, resulting in a $25m payout.

As states like Maryland and New York push for stricter regulations on sweepstakes casinos, this case could set a precedent for future litigation. If successful, it may signal a broader crackdown on platforms operating in legal gray areas.