Stake Faces Illegal Gambling Lawsuit in Alabama
A class action lawsuit has been filed in the US District Court for the Northern District of Alabama targeting online gaming operator Stake.US. The legal complaint alleges that the platform is operating as an illegal gambling enterprise in violation of Alabama state law.
LISTEN TO THIS ARTICLE:The plaintiffs in the case include Alabama resident Laura Hall and her minor child, along with other individuals in the state who claim to have suffered harm from using the Stake.US platform. The lawsuit challenges the legality of Stake.US's operations within Alabama, asserting that the website allows residents to access and engage in games such as slots, poker, blackjack, and roulette.
Related: Illinois Lawsuit Claims Stake.US Breaches Gambling LawsAccording to the complaint, these games constitute illegal gambling under Alabama law, which categorically prohibits most forms of betting and games of chance. The lawsuit argues that despite the company's efforts to present its operations as legal sweepstakes, the functionality of the platform mirrors that of traditional online casinos, which are explicitly banned in the state.
Alabama has historically maintained a rigid stance on gambling, with its constitution—adopted in 1901—explicitly forbidding games of chance. Lawmakers have repeatedly attempted to modernize state gambling laws by introducing proposals for a lottery, sports betting, and regulated casinos.
However, no such legislation has succeeded in passing through both chambers of the state legislature within the required 30-day window, preventing any public referendum from taking place. As a result, the state's legal framework around gambling remains largely unchanged, posing significant legal risks for operators like Stake.US.
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Stake.US Faces Strict Foe in Alabama
Stake.US markets itself as a sweepstakes platform rather than a conventional gambling site. The company, like others in the same segment, utilizes a two-tiered system involving virtual coins that users can obtain either through purchase or through free methods such as mail-in requests.
The platform claims this structure separates the element of consideration—one of the defining traits of gambling—from the element of chance. However, the plaintiffs argue that both types of virtual currency function equivalently to casino chips, enabling users to place wagers on casino-style games and win redeemable prizes.
The complaint characterizes Stake.US's business model as an attempt to obscure the platform's gambling mechanics behind the façade of a sweepstakes. It contends that this approach is a well-worn tactic used by past operators to circumvent anti-gambling statutes, particularly during the early 2000s when sweepstakes-based gaming proliferated in legally ambiguous spaces. The lawsuit suggests that such a structure misleads consumers and violates Alabama's strict gambling prohibitions, making the platform liable for operating an illegal gambling enterprise in the state.
This suit follows similar lawsuits filed in California, Illinois and other states, though Alabama's firm constitutional and statutory stance against gambling may provide a more favorable environment for the plaintiffs. In states with more ambiguous or permissive gambling laws, sweepstakes platforms have often navigated enforcement challenges with greater success. However, Alabama's constitutional ban presents a unique and potentially decisive obstacle for Stake.US in defending its business model.
The lawsuit comes amid ongoing debates within Alabama about how to address unregulated or illicit gambling operations. State lawmakers have argued that Alabama must take stronger steps—such as making illegal gambling a felony offense—in order to curb the spread of unlicensed gaming platforms. Others, however, have tried to legalize gambling in order to combat the black market, but without success.
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