Stake Faces Lawsuit in California Over Alleged Illegal Online Gambling

Australian-headquartered casino brand Stake is being sued in California for allegedly operating an illegal gambling website.

The plaintiff, Dennis Boyle, is suing Sweepsteaks Limited, claiming Stake.us constitutes an illegal gambling website. The case alleges that Stake.us is in breach of California civil code, given that it provides unlawful online gambling and engages in unfair business practices. 

Allegations Center on Stake Virtual Currency and Playthrough Rules

The lawsuit was remanded and escalated from state court to federal court. The case centers around Stake’s social casino and sweepstakes product. Boyle alleges that the company provides real-money online wagering under the guise of free gaming. 

Sweepstakes and social casinos effectively use a dual-currency system. In the case of Stake, digital currencies such as Stake Cash and Gold Coins are alleged proxies for real-money wagering as they are used to play promotional games and sweepstakes. 

Boyle’s complaint states: “Because social casinos operate as if they are not subject to gambling regulations, they do not comply with the regulations that govern the operation of slot machines or other gambling.”  

“A user playing promotional games with Stake Cash is gambling in the purest sense – they are wagering something of value (Stake Cash) on a random event with the hope and intent of winning more Stake Cash than wagered,” the complaint continues. 

It also alleges that Stake’s play-through requirement, tied to Stake Cash, constitutes unfair business practices. Stake’s welcome bonuses and promotional giveaways are subject to a 300% playthrough wagering requirement before any winnings can be redeemed. 

Boyle’s individual claims do not exceed $75,000 in the claim, but the plaintiff is seeking injunctive relief with the shuttering of the site. 

This is not the first lawsuit brought by California resident Boyle. The former gambling addict also has an ongoing case with Yellow Social Interactive, centered around sweepstakes brand Pulsz. 

Boyle also seeks injunctive relief, accusing Pulsz of running operations that constitute an online casino without a license. 

Sweepstakes Casinos Face Rising Scrutiny Nationwide

Online sweepstakes casinos and sports events contracts are under intense regulatory scrutiny across the United States.

Mississippi’s proposed legislation to ban sweepstakes casinos recently died at the Committee level. The Magnolia State Senate was the first chamber in the United States to pass a bill prohibiting sweepstakes casinos. Representatives then amended the wording in early March to include sports betting language. 

Ultimately, the Senate rejected the amended legislation due to the language change. 

The Mississippi Senate became the first chamber in the U.S. to pass a bill banning sweepstakes casinos. In early March, the House of Representatives amended the bill to include language on online sports betting.

After the deadline for conference committee reports, the bill took its place in the legislative graveyard. 

Legislation to regulate or prohibit online sweepstakes casinos is still pending in Arkansas, Florida, Maryland, New Jersey, and New York. As often happens with United States law, if one state sets an example, others may follow in quick succession. 

The post Stake Faces Lawsuit in California Over Alleged Illegal Online Gambling appeared first on CasinoBeats.

 Australian-headquartered casino brand Stake is being sued in California for allegedly operating an illegal gambling website. The plaintiff, Dennis Boyle, is suing Sweepsteaks Limited, claiming Stake.us constitutes an illegal gambling website. The case alleges that Stake.us is in breach of California civil code, given that it provides unlawful online gambling and engages in unfair business
The post Stake Faces Lawsuit in California Over Alleged Illegal Online Gambling appeared first on CasinoBeats.