California’s Sweeps Showdown Goes Hollywood

More shots were fired in the continuing California sweeps saga last week ahead of the long Labor Day holiday, and while this latest lawsuit joins a bevy of similar suits filed by both California and other states and state attorneys general, as well as a veritable raft of cease and desist complaints, this one stands out from the pack for a couple of different reasons.

Not the least of which is that, unlike the vast majority of these lawsuits, this one named a veritable who's who of gaming supply vendors and other assorted enablers, including the streaming service Kick.

While the actual sweeps casino at the heart of the matter is Stake, it was the addition of multi-billion-dollar publicly traded casino software providers like Evolution, Pragmatic Play, and NetEnt, as well as Kick, that consumed all of the oxygen in the resulting media firestorm.

Stake, and its owner in the US at least, Sweepsteaks Ltd, (clever bit that) have fought off just these types of lawsuits throughout most of 2025, and in fact beat back a similar case in California, brought by Dennis Boyle last September due to an arbitration clause, The gist of these complaints being that Stake capitalizes on the promise of free social gaming to run a sweeps casino through the use of a dual currency system of Gold coins and Sweep coins.

While Stake has made tactical retreats in many other states over the past several years, including but certainly not limited to, Connecticut, New Jersey, New York, Michigan, Nevada and Pennsylvania, it has been loath to pull the plug in California even as California Assembly Bill 831, which aims to outlaw sweeps and the dual currency system, has made quick strides in the California legislature.

It perhaps felt that the arbitration agreement that stood them so well last summer might shield them again. While this poor journalist won’t pretend to pontificate on legal matters like procedural unconscionability and substantial unconscionability, it would appear that this lawsuit brought by the LA City Attorney Hydee Feldstein Soto intends to make an end run past this arbitration agreement by filing on behalf of the People of California.

Case law would seem to indicate that this approach may, in fact, allow Ms. Soto to avoid the traps of arbitration, as the People of California collectively are not private citizens bound by a mediation agreement.

Perhaps sensing her advantage, she certainly didn’t stop with the novel legal concepts, but also asked the court to pierce the legal veil of Sweepsteaks LTD, which runs Stake.us in America, and hold corporate owners Ed Craven and Bijan Tehrani personally responsible for the claims made against their company, as the alter ego of the corporation.

It’s certainly an interesting legal argument, and not one typically seen in a case like this, due to the preponderance of evidence required, but perhaps Ms. Soto has a hole card all her own, or intends to use the bludgeon of Discovery to convince Mr. Tehrani and Craven to reconsider how badly they value the California market.

In typical Los Angeles fashion, and perhaps knowing that she would have the attention of most of the gambling world on her, she also chose to name and shame not only Kick, which, in all fairness, did begin life as a shill to Stake.us gambling, but has grown into a hundred million users a month forum with a valuation between $1 and $2 billion dollars.

And if you are swinging for the fences, you might as well throw in some other multi-billion dollar companies that actually trade on the NYSE, like Evolution, with a current market cap north of $17 billion, or Pragmatic Play, which, while privately owned, still has a billion-dollar-plus valuation. And that's the thing about LA publicity, it's just that much brighter than other places.

So bright in fact that Pragmatic Play pulled back from licensing any content to any sweeps operator in the US over the weekend, and both Hacksaw gaming and Evolution have pulled back at least from the State of California, and given Evolution’s ongoing investigations in the UK, as well as its new West Coast problems, it wouldn’t be surprising to see a further consolidation of offerings to much more regulated and licensed markets.

They would certainly be remiss at least not to closely follow the progress of AB 831, which will probably get its Senate vote in the coming weeks. And it doesn’t rely on novel legal concepts or the hot glare of publicity to make its point. It clearly lays out that any media affiliate, gaming content provider, payment processor or even platform provider or financial institution that knowingly either directly or indirectly supports the operation of a sweepstakes game will face a penalty of up to $25,000 per violation as well as up a year in jail.