Stake.us hit with Alabama lawsuit over alleged illegal online gambling
A class action lawsuit has been filed in federal court in Alabama, accusing the popular sweepstakes casino site Stake.us of running an illegal online casino.
The lawsuit was filed on May 2 in the US District Court for the Northern District of Alabama. It names Laura Hall and her minor child, J.C., as plaintiffs, along with other Alabama residents who say they were affected in the same way.
NEW: A class action lawsuit has been filed in Alabama federal court vs. sweepstakes casino giant https://t.co/yuYFZuEWJO for operating an illegal online casino. Stake has also been sued in CA and IL, but Alabama’s gambling laws are notoriously strict. Is Drake next? pic.twitter.com/3PRNDRAjLi
— Daniel Wallach (@WALLACHLEGAL) May 4, 2025
According to the complaint, Stake.us has been misleading users by promoting its site as a legal “sweepstakes” platform. In reality, the lawsuit claims the site is offering unlicensed casino-style games like slots, poker, blackjack, and roulette, which are all banned under Alabama law.
This is the third class action lawsuit filed against Stake.us in recent months, with similar cases already underway in California and Illinois.
Stake.us is technically legal in Alabama, even though traditional online casinos aren’t legal in the state. That’s because Alabama is one of the states that permits sweepstakes casinos, which are treated differently under the law. Unlike regular online gambling, sweepstakes casinos aren’t officially considered to be offering gambling.
Stake.us operations in Alabama compared to ‘internet cafe gambling’However, Next.io reports that the complaint challenges the notion, stating: “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.’
“That is an old gimmick that was once popular among criminals in the early 2000s.”
The lawsuit compares Stake’s business model to the old “internet café” gambling parlors that were shut down across the US more than ten years ago.
The places, usually found in strip malls, sold things like internet time or phone minutes. But along with those purchases, customers would get sweepstakes entries they could use to play slot-style games for a chance to win cash, essentially functioning like unregulated casinos.
The lawsuit claims: “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 complaint says that Stake.us runs under the company name Sweepsteaks Limited and offers more than 200 games from well-known providers. These include popular options like slots, poker, and various table games.
Drake partnershipThe brand promotes its appeal through big-name celebrity partnerships, with rapper Drake being one of the most well-known. The pair teamed up in March 2022, and the Canadian artist often posts his bets with fans on social media.
On the website, users are invited to “win big alongside Drake,” which the lawsuit says conflicts with Stake’s claim that it doesn’t actually offer gambling.
The lawsuit brings up the issue of Stake’s dual-currency system.
Users buy “Gold Coins” to play games just for fun, with no monetary value. But along with those purchases, they also get “Stake Cash,” a virtual currency that can be traded for cryptocurrency or gift cards.
The lawsuit argues that this supposedly “free” Stake Cash actually acts as a stand-in for real money and plays a key role in what it claims is an illegal gambling setup.
ReadWrite has reached out to Stake.us for comment.
Featured image: Stake / Canva
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