Deputy Editor
A Los Angeles attorney has sued Stake.us, a sweepstakes casino provider, on behalf of the people of California, alleging that its site constitutes illegal gambling. Several other parties are named in the suit, including the site’s owners and the popular video game streaming platform Kick, which they also own. The suit claims that Kick effectively acts as a marketing arm for Stake.
Kick emerged as a competitor to the leading streaming service Twitch, before it was discovered that the same people—Bijan Tehrani and Ed Craven—are behind both products. Stake’s flagship site operates worldwide as a cryptocurrency-based casino, Stake.com. Meanwhile, Stake.us is its U.S.-facing, sweepstakes-based counterpart at the heart of the suit.
The lawsuit was filed Aug. 28 in the Superior Court of California. It lists the people of the state of California as the plaintiff.
“Since 2022, Defendants have operated, controlled, promoted, and/or aided and abetted one of the largest and most profitable illegal casinos in California,” the suit alleges.
The suit adds that Stake operates a “predatory, dangerous gambling environment.” It seeks to recover all funds lost by Californians on Stake.us.
Kick Alleged As A Promotional Platform For Illegal Casino
Kick has become a popular streaming platform among poker players and others who want to create types of content frowned upon by alternatives like Twitch and YouTube. That includes some racy streams as well as gambling content. It pursued an aggressive strategy in its early years, offering highly favorable revenue share deals to content creators and pulling away big-name stars from Twitch, like xQc and Amouranth.
Twitch changed its policy regarding gambling content in October 2022.
Ossi “Monarch” Ketola, who gained fame in the poker world recently for an ill-fated heads-up match with Dan Cates, has a prominent streaming channel on Kick. It boasts more than 20,000 subscribers.
The lawsuit alleges that Kick is a loss leader for Stake, serving entirely as a promotional vehicle.
“Kick Streaming promotes the illegal casino to Californians and lures in new players,” the suit says. “Mr. Tehrani and Mr. Craven started Kick to ensure that there would be a venue for livestreaming gambling on Stake to lure in new players.
“There was no ambiguity about Kick’s purpose: Kick was created for the unlawful purpose of streaming illegal gambling.”
Lawsuit Targets Game Providers As Well As Stake, Kick
The future of sweepstakes poker and gambling in California is already in doubt due to an impending bill seeking to ban the business model. Lawsuits similar to this one have also sprung up around the country. However, the inclusion of a streaming service in the L.A. lawsuit is new wrinkle, not yet seen elsewhere. In addition to naming the operator as a defendant, this lawsuit targets some of the game providers used by Stake.
Several of those third-party casino content providers have reportedly discontinued their relationship with Stake.us pre-emptively.
“It turns out that game content suppliers — and not payment processors (as previously thought) — may be the choke point in the sweepstakes casino ecosystem,” said gaming lawyer Daniel Wallach on X. “The regulatory risk regarding licensing suitability and the reputational risk — especially for publicly traded companies — make them the weak links in the chain.”
Wallach’s mention of payment processors is a reference to the Unlawful Internet Gaming Enforcement Act of 2006, which caused the downfall of most offshore poker sites serving the U.S. five years later. Part of that law’s strategy was to criminalize any third-party companies like payment processors and web hosts who facilitated online gambling, even if the gambling companies themselves were operating abroad, out of reach of U.S. laws.
It seems that game providers with a foot in both worlds don’t want to risk losing access to regulated markets in the U.S. and elsewhere if Stake.us were found to be illegal.
Image credit: Nick Youngson/Pix4free (license)
