Los Angeles sues online casino operator Stake.US for illegal gambling

View profile for Daniel Wallach

U.S. Gaming Law and Sports Betting Attorney

BREAKING: The Los Angeles City Attorney's Office has filed a sweeping civil enforcement action against online sweepstakes casino operator Stake.US, Kick Streaming, Stake’s owners Ed Craven and Bijan Tehrani, Evolution Gaming and 12 others for running and/or aiding & abetting the running of an illegal online gambling enterprise in violation of the California Unfair Competition Law (“UCL”), California Business and Professions Code sections 17200, et seq., and for making false and misleading statements in furtherance of that enterprise in violation of the UCL and the False Advertising Law ("FAL"). The complaint seeks a permanent injunction, restitution (i.e., recovery of all funds lost by Californians), and mandatory civil penalties of up to $2,500 for each UCL and FAL violation (together, up to $5,000 for each violation, or up to $7,500 for each violation perpetrated against a senior citizen or disabled person). Hydee Feldstein Soto -- the first female City Attorney in L.A. history, and the first Latina elected citywide -- now becomes the first governmental official in the entire country to file a civil enforcement action against an online sweepstakes casino operator. And the floodgates may be opening. Here's why. The L.A. City Attorney's Office has brought in a private law firm as its co-counsel -- Susman Godfrey LLP -- the same firm which filed a nationwide class action lawsuit last week against VGW, its founder Laurence Escalante, slots influencer Brian Christopher, and VGW's California vendors. In other words, VGW may be next. This is a really shrewd move because California law generally bars private civil lawsuits to recover gambling losses, but governmental officials can sue on behalf of the people for injunctive relief, restitution, and mandatory civil penalties of up to $2,500 per violation. If Susman Godfrey is doing some of the heavy lifting here, we may begin to see similar lawsuits from other city and county attorneys throughout California (with Susman Godfrey as co-counsel). Maybe Rob Bonta too. A de facto statewide class action, with better damages. The civil penalties alone could easily run in the 9 or 10 figures for a company like Stake. And the case is a slam dunk on the law. I explain why in Forbes (see links in comments): Here is the full list of defendants: - Sweepstakes Ltd. dba Stake.US - Easygo Group Holdings Pty Ltd. - Medium Rate N.V. - Kick Streaming Pty Ltd. - Ed Craven - Bijan Tehrani - Veriff - Veridian (Gibraltar) Limited - Tamaris (Gibraltar) Limited - Evolution AB - Evolution Malta Holding Ltd. - Evolution US LLC - Evolution Malta Ltd. - Bigtime Gaming Pty Ltd. - Red Tiger Gaming Ltd. - Red Tiger International Ltd. - Netent Nolimit City Holding Ltd. - Nolimit City Ltd. - Hacksaw AB - Hacksaw Gaming Ltd. - HGMT Ltd. - HGIM Ltd.

Matthew Stafford

M&A, Capital Markets & Private Finance, Strategy and Management for multi-national corporate and business development.

2mo

Honest question- is this a slam dunk like fantasy a few years ago or poker in states that determined its skill? Social Gaming with VC/tokens; E.g. goldfish Casino Jackpot party Casino. FanDuel and DK were the outsiders looking in; now Flutter commands a massive share of global gaming. If promotion is some sort of hook, then you’re asking for a fiction with groups like: https://speedsociety.com/ that portend to promote; but who buys Windex at a premium? Some of these arguments feel a bit disingenuous bc Sweeps is eating at thier market share. How does one write a rule that allows publishers clearing house, but not “illegal gambling”?

Mike B.

‘The true sign of intelligence is not knowledge but imagination.’ – Albert Einstein

2mo

It is very interesting to see the content providers listed as defendants. We always think of the brand (Stake etc) as the "bad guy" but the content providers also know where they shouldn't be offering their products. If they aren't able to hide behind the brand then I think this will hurt a lot of unregulated websites as good content providers may choose to deliver their content via regulated channels.

The Evolution name jumps out at me. They have partnered with several LEGAL online gaming sites. Will this impact those deals? Licensing could be affected.

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Jeremy M. Kissel

Strategic Partner | Legal Executive | Investing in Innovation, Technology, and Growth

2mo

😮

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Anjana Chakraborty

Co-Founder | Brand Strategist | Visual Design Expert and Social Media Specialist for Sports iGaming, Sweepstakes and Social Casino, Travel, Hospitality and Retail | Sweepstakes Game Management | Ardent Liverpool FC Fan

2mo

This is huge...!

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