Stake.us Finds Legal Trouble in Illinois

As the lines continue to be blurred between "social casino" and "real-money casinos," pressure on state regulators to protect residents is mounting. In the state of Illinois, this very question has been brought to light because of a class action lawsuit filed against the social online gaming operator Stake.us.

It's noteworthy that Stake.us has common ownership with a real cash iGaming site call, that's right, Stake.com

The lawsuit was filed in Illinois federal court by a large group of Illinois residents who are seeking $25 million in collective damages. The damages relate to cash losses that the plaintiffs claim were caused by the hidden nature of the social or sweepstakes casino defendant, that being Stake.us.

The law firm for the plantiffs in this case will be the same law firm that just won a $25.0 million class action lawsuit against stake.us in the state of Washington. It's worth noting that the social casino owner is also facing a similar lawsuit in the state of California.

In the Illinois class action lawsuit, the plaintiffs are seeking to have Stake.us closed down and a return of all of their "gambling" losses.

How Does Stake.us Operate?

To win this lawsuit, the plaintiffs will need to show that Stake.us is actually running a real money gambling site that is being dress up to look like a social or sweepstakes casino.

The lead plaintiff in the case is Brayden Urdan, who among tens of thousands of other of other residents claim to have lost money unknowingly. According to gaming attorney Daniel Wallach, the lawsuit alleges:

“Defendant Stake.us is a virtual clone of Stake.com, rebranded to mislead regulators and consumers into believing it offers harmless gameplay instead of an unlawful gambling.”

The Stake.us social or sweepstakes casino site works as follows:

Customers are permitted to purchase "gold coin." The gold coins have no monetary value and can only be used to play casino games. If a player wins, they only receive more gold coins that can be used for continued play.

When customers buy gold coins, they also get a few "stake coins." Therein lies the problem. Stake coins function like virtual currency. If a player gambles or participates in a Stakes sweepstakes drawing, they can win more Stake coins. In the end, Stakes coins can be redeemed for prizes that include real cash.

The plaintiffs are claiming that getting Stake coins with the purchase of gold coin is a marketing ploy to draw the attention of real money online casino gamblers. The more gold coins they buy, the more Stake coins they receive. By receiving Stake coins, they can gamble for cash prizes while laying claim to participating in social gambling only.

It's difficult to imagine that the plaintiffs were all niave about the reality of Stake.us serving as a real money casino. However, unlicensed real money casinos are illegal in Illinois as is the use of virtual currency. The lawsuit looks like gamblers trying to get their losses back from a casino that has been operating illegally.

The social gaming community will be watching closely.