The lawsuit claims the group ran or aided an illegal online gambling enterprise in California. The city is seeking a permanent injunction, restitution for Californians, and civil penalties allowed under state law.
What the Lawsuit Says and Seeks
The complaint alleges the defendants operated or helped operate an unlawful gambling scheme aimed at California residents. Officials say the companies promoted casino-style games as “sweepstakes,” while still functioning like real-money gambling.
The filing targets Stake.US and Kick, plus several suppliers frequently seen in the social casino space, including Evolution, Red Tiger, NetEnt, Nolimit City, Big Time Gaming, Hacksaw, and identity-check providers such as Veriff. (The list includes additional related entities.)
The City Attorney brought the case under California’s Unfair Competition Law (UCL) and False Advertising Law (FAL). Those statutes let government lawyers seek injunctions, restitution, and civil penalties of up to $2,500 per violation.
When violations impact seniors or disabled persons, courts may add up to $2,500 more per violation. For a high-traffic site, those figures can scale quickly into very large totals.
According to industry reporting, the City Attorney has retained Susman Godfrey LLP as co-counsel. That same firm recently filed a nationwide class action against VGW (operator of Chumba and LuckyLand) and several partners.
If confirmed, that pairing signals added firepower and experience in complex, high-stakes consumer cases.
Observers also note this is reportedly the first civil enforcement action by a U.S. government official against an online sweepstakes casino operator. If other city or county attorneys follow, California could see a wave of coordinated actions using similar legal tools.
That would mark a new phase of scrutiny for social and sweepstakes casinos statewide.
Why This Matters for Sweepstakes Casinos
Sweepstakes casinos have grown by marketing free-to-play entry alongside purchasable tokens that unlock more spins or playtime. Critics argue the model mimics real gambling, while operators say it complies with sweepstakes rules and state law.
Courts have not issued a single, definitive ruling that settles the debate across all platforms, and outcomes often turn on facts and contracts.
Still, pressure is building. In recent months, a California federal judge sent a separate Stake.US case to arbitration, avoiding a merits ruling but keeping the company defending on multiple legal fronts.
Meanwhile, class actions and state-level opinions—like Louisiana’s recent stance declaring online sweepstakes casinos illegal—show a broader regulatory shift. This new Los Angeles case pushes that momentum from private lawsuits to public enforcement.
For players in California, the practical impact could include refund claims, changes to access from California IP addresses, or modifications in marketing and payment flows if an injunction issues.
For operators and suppliers, the filing highlights risk not only for front-end brands but also for vendors that provide games, identity checks, streaming, and payments. The message is clear: city attorneys can use UCL and FAL to target entire ecosystems, not just a single site.
For now, the defendants are expected to contest the allegations. Key questions ahead include how the court views the sweepstakes model under California law, whether penalties are assessed per transaction or per ad, and how broadly any injunction might reach.
However it ends, this case will be a bellwether for how California treats social-casino style operations going forward.
