A federal lawsuit filed in South Carolina alleges that some sweepstakes casino apps function as thinly-veiled real money gambling platforms. Stake.us is named as a defendant in the South Carolina case, making it the fourth state where the company faces legal action, according to court records.
Attorney Daniel Wallach broke the news on X, indicating that there are currently 52 civil lawsuits in U.S. courts seeking to prohibit or regulate sweepstakes casinos.
Sweepstakes casino litigation update:
— Daniel Wallach (@WALLACHLEGAL) August 6, 2025
There are now 52 civil lawsuits pending against online sweepstakes casinos.
The latest was filed against https://t.co/yuYFZuEWJO in South Carolina federal court. https://t.co/yuYFZuEWJO is now a defendant in 4 lawsuits.
Excerpts from the… pic.twitter.com/xM8MNKxpYU
At the heart of the legal arguments is whether sweepstakes casinos and the coins they offer constitute casino gaming under state and federal law.
The South Carolina lawsuit is filed by the state attorney’s office against Sweepstakes Limited doing business as Stake.us, according to the legal docket. In part, it reads:
“To obscure the true nature of its operations, [Stake.us] claims it only sells a virtual currency known as ‘Gold Coins,’ which it characterizes as nonredeemable tokens used solely for casual gameplay. According to Defendant, these Gold Coins have no monetary value and cannot be exchanged for cash.”
Regulators and lawmakers in South Carolina and other states have argued that sweepstakes casinos operate in a narrow legal gray area between legality and illegality.
The lawsuit also says that “every purchase of Gold Coins on Stake.us is bundled with a second token, called ‘Stake Cash,’ which is provided as a purportedly free bonus. Unlike Gold Coins, Stake Cash can be wagered on casino-style games and redeemed for real money at a fixed exchange rate of one U.S. Dollar per one Stake Cash—revealing its function as a vehicle for real-money gambling.”
The suit also points out that consumers are being confronted with “confusing ‘playthrough’ requirements that make it more difficult for players seeking to redeem their winnings…”
According to the complaint and Stake.us’s publicly available terms, the platform uses two virtual currencies—Gold Coins and Stake Cash—which can be used to play casino-style games such as slots and table games.
Advocates and regulators in some states have criticized sweepstakes casinos for operating without state gambling regulation and without applying the same advertising and age restrictions required for licensed gambling operators.
Montana, New Jersey, and New York have passed measures that effectively prohibit sweepstakes casinos, according to state regulatory announcements.
Several states, including Louisiana, have issued cease-and-desist letters to Stake.us and other sweepstakes casino operators, according to public records.
