A new legal challenge has landed in Alabama. Stake.us, a cryptocurrency sweepstakes platform, now faces a federal lawsuit that could further complicate its operations in the United States. Plaintiffs argue the platform mimics old internet café models that were shut down years ago and say it operates outside legal gambling channels in the state.
Good to know
- Stake.us is already facing lawsuits in California and Illinois.
- The suit compares Stake’s model to shuttered internet cafés once used for gambling.
- Alabama law allows only limited gambling formats like tribal gaming and bingo.
The lawsuit, filed in the U.S. District Court for the Northern District of Alabama, calls for a complete ban on Stake.us in the state. It also seeks financial restitution for users who allegedly lost money on the site. Several Alabama residents are listed as plaintiffs.
At the center of the complaint is the claim that Stake.us operates using the same playbook as past internet cafés. Those businesses once sold items like phone minutes or internet time while offering sweepstakes entries, often used to play slots for cash rewards. Courts across the country eventually shut them down.
According to the lawsuit, Stake.us runs a similar system by offering virtual currencies labeled as Gold Coins and Stake Cash. While Gold Coins have no value, Stake Cash can reportedly be used to play games for real cryptocurrency rewards. Plaintiffs argue these virtual items function like casino chips.
“In short, Defendant is copying the internet café playbook,” the lawsuit claims, “but instead of selling internet time or groceries, Defendant sells Gold Coins, which are then ignored so that players can use the Stake Cash for cryptocurrency gambling.”
One major complaint from the plaintiffs is the way Stake.us handles state restrictions. The suit says Alabama was not listed as a restricted location on the platform, which led users to believe the site was legally accessible there. In reality, Alabama has some of the toughest gambling laws in the country. Outside of a few approved formats—like tribal casinos, bingo, and horse racing—most gambling activity is prohibited.
The lawsuit also points to Stake.us’s use of celebrities. Drake has appeared in promotional content and is mentioned on the site alongside language like “a chance to win big alongside Drake.” Plaintiffs argue that this type of marketing undermines any claim that the platform is not offering gambling.
Stake.us runs under the parent company Sweepstakes Limited and provides over 200 games from popular developers, including slots, poker, and table games.
This case follows growing attention on sweepstakes casinos. In 2023, the American Gaming Association urged regulators to investigate the business model and pushed for legislation to address it. With lawsuits stacking up and public scrutiny increasing, sweepstakes-based casinos like Stake.us are now under more pressure than ever.
The post Alabama Lawsuit Targets Stake.us Over Alleged Unlicensed Gambling appeared first on iGaming.org.