California’s iGaming sector is under scrutiny following a lawsuit filed by the City of Los Angeles against Stake.us on August 29, 2025. The case alleges that the sweepstakes-style casino platform operates outside California’s gambling laws, raising questions of compliance and sparking industry-wide reactions.
Key withdrawals
The lawsuit, led by City Attorney Hydee Feldstein Soto, claims Stake.us engages in illegal gambling through its dual currency system of gold coins and sweepstakes coins, while also facing accusations of unfair competition and false advertising. In response, Evolution and Pragmatic Play have withdrawn their content from Stake.us for California users. Pragmatic Play took a further step of announcing a full exit from the US sweepstakes market, highlighting the regulatory pressures shaping business strategy.
Stake.us has denied these allegations, asserting that its operations adhere to current legal frameworks in California. The platform has committed to mounting a court defence, though the absence of two major content providers is already reshaping its services for players in the state.
Regulation
The decision comes as California considers further regulation of sweepstakes casinos. Assembly Bill 831, awaiting a Senate vote, proposes a full prohibition on sweepstakes-style platforms and introduces criminal penalties for suppliers who provide them with game content. If enacted, the bill could mark a significant realignment of the state’s iGaming market and affect providers beyond this case.
However, AB 831 faces opposition from certain tribal nations, including the Kletsel Dehe Wintun Nation and the Big Lagoon Rancheria, who contend the legislation would limit their ability to develop legitimate revenue sources. This opposition underscores the complexity of balancing regulatory enforcement, market activity, and tribal interests within the broader California gaming debate.
