Stake.us Hit with Class Action Over Gambling Allegations in Illinois

Stake.us, a crypto-backed sweepstakes casino, finds itself embroiled in a new legal challenge within the U.S. District Court for the Northern District of Illinois. The platform is facing accusations of operating an illegal online gambling site, with the lawsuit filed by Illinois resident Brayden Urdan. The core of the complaint revolves around the claim that Stake.us misrepresents a real-money casino as a 'social casino,' thereby violating state gambling laws.

The Controversial Dual-Currency System at Stake.us

Central to the lawsuit is Stake.us's operational model, which involves a two-token economy. Users can purchase Gold Coins, which do not hold any wagering value, while Stake Cash is provided as a 'bonus.' However, it's the Stake Cash that can be used to play games and subsequently converted into real money, a system that the complaint argues functions similarly to traditional gambling. Brayden Urdan, the plaintiff, claims to have lost over $15,000 on the site since 2022, with $10,000 of those losses occurring in the past six months. He argues that the free-play alternatives offered by Stake.us are not only obscure but also impractical. Despite the platform's assertion that no purchase is necessary to obtain Stake Cash, the lawsuit points out that the complex and cumbersome mail-in procedures, along with limited promotional rewards, effectively funnel users towards making real-money deposits. The complaint further alleges that once a user's promotional Stake Cash is depleted, 'the only viable way to continue gambling is to purchase more,' suggesting that the game's structure is designed to encourage continued spending, thereby undermining the legitimacy of the 'sweepstakes' model.

Celebrity Endorsements and Marketing Strategies Under Fire

Stake.us's marketing approach, which includes high-profile endorsements from celebrities like Drake and UFC fighter Israel Adesanya, is also under scrutiny. The lawsuit claims that these endorsements serve to glamorize the platform and obscure the gambling risks by presenting them as entertainment. This strategy, according to the complaint, blurs the distinction between Stake.us and its parent brand, Stake.com, a crypto casino that is banned in many U.S. jurisdictions. The suit further alleges that this marketing tactic targets younger audiences through social media, flashy content, and exaggerated winnings, promoting gambling without adequately disclosing the potential harm involved.

Illinois's Legal Environment and the Implications for Stake.us

The choice of Illinois as the venue for this lawsuit is significant, given the state's favorable legal environment for gambling-related lawsuits. Illinois's Loss Recovery Act allows individuals to claim up to three times their gambling losses if a case is filed within six months, a factor that has led attorney Daniel Wallach to describe Illinois as 'the gambling class action lawsuit capital of the United States.' Wallach also noted that 'very few people who've suffered gambling losses ever sue the gambling operator – much less within six months – this quickly opens the door to a representative class action lawsuit for treble damages.' This legal framework has enabled the law firm Edelson PC, known for securing a $25 million verdict against High 5 Games in Washington, to launch its first lawsuit targeting a sweepstakes casino. According to Wallach, 'They've wisely identified several vulnerabilities in Stake's business model,' particularly the near dollar-for-dollar exchange between real money and Stake Cash. Stake.us is the second major platform to be targeted by Edelson PC, following its victory in Washington state where virtual gaming chips were deemed to have 'something of value.' This precedent could influence upcoming decisions in Illinois and California, where a nearly identical case is underway. While Stake.us has yet to issue a public response, it maintains that it operates within legal sweepstakes parameters, offering no-purchase-necessary options and free-to-play functionality. Source: Daniel Wallach via LinkedIn, linkedin.com, April 2025. By GamesAndCasino