A new class action lawsuit has been filed against Stake.us in Alabama federal court, claiming the platform is running an illegal online gambling operation in violation of the state’s anti-gambling laws.
The lawsuit, filed on May 2 in the US District Court for the Northern District of Alabama, names plaintiffs Laura Hall and her minor child, J.C., as well as other Alabama residents.
According to the suit, the plaintiffs allege that Stake.us has been deceptively marketing its website as a legal sweepstakes casino platform but is actually providing unlicensed, casino-style games.
Despite offering blackjack, poker, and slots, Stake.us is able to operate in Alabama because it’s not a traditional online casino. Alabama is among the dozens of U.S. states that permit sweepstakes operators.
Alabama Lawsuit Marks Third Class Action Lawsuit Filed Against Stake.us
Sweepstakes platforms use their own form of virtual currency such as Gold Coins and Sweeps Coins. This is referred to as the dual currency system. Players are then able to redeem their virtual coins to win real cash or prizes.
However, lawmakers and regulators believe the dual-currency system should constitute gambling.
“Stake attempts to separate the element of consideration from chance by offering a two-tiered system of virtual coins, both of which function like casino chips, while calling the whole affair a ‘sweepstakes,’” the lawsuit claims.
In addition, the lawsuit compares Stake’s business model to the now-defunct “internet café” gambling establishments that were shut down across the U.S. more than a decade ago.
“Stake will ask the Court to disbelieve its own eyes and conclude that Stake.us is not really a gambling operation, but instead offers legal ‘sweepstakes,’” the complaint states. “That is an old gimmick that was once popular among criminals in the early 2000s.”
This case marks the third class action suit filed against Stake.us in recent months, with similar complaints pending in California and Illinois.