Stake Faces Collapse Amid Seven Lawsuits

Stake faces collapse: seven lawsuits, influencers sued and a massive decline in crypto deposits!

The rapid global ascent of Stake has been nothing short of extraordinary. From a small crypto-gambling start-up, co-founded by Ed Craven and Bijan Tehrani, Stake evolved into one of the world’s most prominent online gambling brands, processing billions of dollars in cryptocurrency wagers every month. Its marketing campaigns, celebrity endorsements and influencer-driven visibility transformed it into a household name in digital gambling.

Yet the tide is now shifting sharply against the company. The same momentum that propelled its growth is now amplifying its exposure. In 2025 alone, Stake and its associated entities have been named in at least seven separate lawsuits across the United States, several of which now target not only the corporate entity but also its individual founders.

This new phase marks a turning point. The Los Angeles City Attorney’s Office has personally named Craven and Tehrani in a California civil complaint. The Missouri class action extends liability to the company’s celebrity promoters, including Drake and Adin Ross, in what may become a precedent-setting case for influencer accountability in online gambling.

In earlier Malta Media investigations, Stake’s structure and licensing inconsistencies were dissected, exposing its use of sweepstakes models to reach U.S. customers while operating its global platform through Curaçao-based licensing channels. The present lawsuits confirm that the same legal ambiguities now form the basis of a coordinated enforcement wave that could spell the beginning of Stake’s decline.

Personal liability: Craven and Tehrani named as defendants

For the first time, the legal spotlight has moved directly onto Stake’s co-founders. The California complaint, filed in February 2025, alleges that Sweepsteaks Limited (the entity behind Stake US) violated California law by operating an illegal gambling platform disguised as a sweepstakes model. Both Craven and Tehrani are named personally as defendants, alongside major content suppliers such as Evolution AB, Pragmatic Play and Hacksaw Gaming.

According to filings cited by the Los Angeles City Attorney’s Office, the platform enabled users to purchase “Gold Coins” or “Sweeps Coins” that could be converted into cash prizes. Despite being described as “free-to-play,” the games mirrored the look, feel and reward mechanics of conventional online casinos. The complaint describes this model as “a deliberate circumvention of gambling regulations designed to exploit consumer confusion.”

The inclusion of major content providers is noteworthy. By supplying casino titles to the Stake US platform, these studios are alleged to have facilitated gambling activity in jurisdictions where it is expressly prohibited. Although no criminal charges have been filed, the civil exposure for damages and disgorgement could be considerable.

In prior Malta-Media reporting, the opaque nature of supplier-operator relationships was already highlighted, particularly the absence of meaningful due-diligence chains between game studios and unlicensed operators. The California action now reinforces that theme by asserting direct knowledge or willful blindness among the participating suppliers.

Missouri’s class action against influencers

The latest blow came in October 2025, when a Missouri class-action lawsuit targeted Drake and Adin Ross, two of Stake’s most visible brand ambassadors. The lawsuit, filed in the U.S. District Court for the Western District of Missouri, accuses them of promoting an illegal gambling product, misrepresenting the nature of their participation and glamorising an activity that is banned within the state.

The 34-page complaint alleges that “Drake’s role as Stake’s unofficial mascot is quietly corrosive: He is glamorising the platform to millions of impressionable fans, many of whom treat his wild betting habits like gospel.” It further claims that the rapper and the influencer “often do not gamble with their own money despite representing to the public that they do.”

The filing argues that this practice constitutes deceptive and unfair business conduct, designed to entice consumers into losses while masking the fact that the participants’ stakes were funded by Stake itself. The lawsuit seeks damages and equitable disgorgement of profits from the defendants, including Stake, its corporate parent and the celebrity promoters.

Prominent U.S. gaming attorney Daniel Wallach was among the first to publicise the case, describing it as a “turning point” in influencer accountability. The lawsuit’s significance lies not merely in its allegations but in its implications for marketing within the gambling industry.

The widening net of litigation

Based on publicly available filings, these were filed between February and October 2025:

1. California (February 2025) – Lawsuit by Los Angeles City Attorney against Stake US, Ed Craven, Bijan Tehrani and several content providers for illegal gambling and deceptive business practices.
2. Illinois (April 2025) – Civil action alleging violation of state gambling prohibitions through the sweepstakes casino model.
3. Alabama (May 2025) – Class-action claim for deceptive practices and violation of anti-gambling statutes.
4. Massachusetts (May 2025) – Complaint by residents alleging inducement into unlawful gambling activities.
5. South Carolina (August 2025) – Suit by consumers seeking restitution for alleged gambling losses.
6. Minnesota (August 2025) – Parallel consumer protection and unjust enrichment claims.
7. Missouri (October 2025) – Class action against Drake, Adin Ross and Stake for promoting illegal gambling.

Collectively, these lawsuits represent a sweeping legal offensive that no longer focuses solely on the corporate structure. The inclusion of individual directors, celebrity promoters and technology suppliers demonstrates an emerging enforcement model aimed at dismantling the entire ecosystem surrounding unlicensed gambling operations.

The sweepstakes façade

The Stake US model sits at the centre of nearly every legal challenge. The company claims that it operates under a sweepstakes structure rather than as a traditional gambling site. Players purchase “Gold Coins,” which carry no direct cash value, but are awarded “Sweeps Coins” that can be used to play casino games and redeem cash prizes. This distinction is critical because sweepstakes laws in several U.S. states allow promotional games of chance provided that participation is free or incidental to a purchase. Stake US maintains that users can obtain free coins by mail and therefore the system remains compliant.

However, the California lawsuit contends that this is “a legal fiction,” asserting that the overwhelming majority of users make direct purchases and that the games simulate a real-money casino environment. In the complaint’s words, “Stake US offers the full sensory and financial experience of gambling, minus the licence.”

For regulators, this hybrid model represents an enforcement challenge. Yet the growing number of lawsuits suggests that patience is wearing thin. U.S. authorities are no longer viewing sweepstakes casinos as harmless marketing novelties; they are increasingly classifying them as unlicensed gambling operations in disguise.

The supplier dilemma: complicity by design

The California filing’s inclusion of major game-studio suppliers adds an important new dimension to the debate. The complaint alleges that Evolution, Pragmatic and Hacksaw Gaming “supplied software, support and game content with knowledge or reckless disregard that Stake US was operating unlawfully”, ( NetEnt , Red Tiger , Nolimit City® should have been added as well). If upheld, such an argument could have sweeping implications for the entire iGaming sector. For the first time, suppliers might be held accountable not only for their direct contracts but also for the downstream usage of their technology.

This argument mirrors similar discussions already seen in Europe. In your previous Malta-Media investigations, questions were raised about whether studio distribution networks can legitimately distance themselves from illegal operators that use their content. The same principle is now being tested in U.S. courts, where supplier liability may soon form part of a broader compliance obligation.

For the studios, the risk is both legal and reputational. If content produced in regulated environments is found to have powered unlicensed operations, regulators in jurisdictions such as Malta, Gibraltar, the UK or the Isle of Man may seek clarification from licensees about due-diligence procedures and contractual oversight.

The influencers: from marketing assets to legal liabilities

Influencer marketing has been one of Stake’s most effective growth engines. Streamers and celebrities have showcased multimillion-dollar gambling sessions on social media, creating a powerful feedback loop of visibility and credibility. Yet the Missouri case signals that this approach may now carry a serious legal cost.

The lawsuit describes a pattern in which Drake and Adin Ross allegedly misled viewers about their personal stakes, broadcasting large wagers funded directly by the company while representing them as personal risk. Such conduct, if proven, could be deemed fraudulent misrepresentation and unfair commercial practice under state law.

The case also underlines a more profound cultural question. For years, the intersection between gambling and influencer culture has remained under-regulated. Platforms like Twitch , KICK and YouTube have blurred the lines between entertainment and gambling, allowing underage or vulnerable viewers to be exposed to high-risk content.

Stake’s marketing success relied heavily on this ambiguity. The legal actions now underway could dismantle that advantage, forcing platforms and promoters to adopt stricter compliance standards or face direct liability.

The global compliance paradox

Stake’s founders often presented the company as a symbol of technological innovation and regulatory adaptability. The brand operates under a Curaçao gaming licence, which until recently allowed online casinos to target international users with limited oversight.

However, the 2023-2025 transition from the old Curaçao master-licence system to the new Curacao Gaming Authority (CGA) framework has introduced stricter registration and compliance obligations.

As Malta-Media previously reported, Stake’s structural configuration has long raised questions about the legitimacy of its licensing arrangements, particularly the absence of transparent jurisdictional disclosures for players in restricted regions. These issues are no longer theoretical. The U.S. lawsuits now connect operational opacity with direct consumer harm.

What began as an innovative decentralised model has evolved into a regulatory flashpoint, illustrating how jurisdictional arbitrage can unravel once enforcement agencies coordinate their efforts.

Public policy and addiction concerns

Beyond the legal arguments, the underlying policy issues are increasingly visible. The Missouri complaint explicitly refers to Stake as an “addictive gambling product”, citing its aggressive marketing towards younger audiences and its use of celebrity endorsements to normalise gambling behaviour.

Such allegations elevate the matter from a commercial dispute to a public-health concern. Stake’s critics argue that its design, mechanics and promotional style blur the boundary between entertainment and addiction. The presence of high-value jackpots, celebratory graphics and influencer commentary mimic the dopamine-triggering structures found in social-media engagement algorithms. This convergence between gambling and behavioural design has drawn scrutiny from academics and regulators alike. In effect, Stake is being accused of creating a gamified addiction loop, amplified through influencer reach and real-time cryptocurrency transactions. Whether or not the allegations succeed in court, the reputational harm is likely irreversible.

Financial signals of decline!

Legal troubles are rarely isolated from financial performance. Data published by Dominic Sawyer , Head of Growth at Tequity , using analytics from Tanzanite, shows a steep fall in Stake’s deposit volumes between 20 and 27 October 2025:

• Stake: down 22.5%, from USD 394.4 million to USD 305.5 million
• Stake US: down 82.3%, from USD 81.8 million to USD 14.5 million

These figures, while unverified by the company, paint a troubling picture of rapid contraction. Whether the decline is caused by user hesitation, payment-processor interruptions or jurisdictional access restrictions, the outcome is the same: Stake’s once-relentless growth curve appears to have turned sharply downward.

In previous Malta-Media analyses, it was noted that Stake’s business model depends on high-velocity transaction volume rather than long-term retention. A 20-80% weekly drop could therefore disrupt liquidity, affiliate commissions and bonus structures within a matter of weeks. Such a downturn coinciding with mounting litigation risk raises the question of whether the brand is now entering a self-reinforcing decline – where legal exposure drives public distrust, which in turn reduces deposits and accelerates further instability.

The cumulative impact of seven lawsuits

Individually, each lawsuit might be survivable. Collectively, they represent a systemic threat. The multi-state pattern suggests coordinated legal thinking, possibly inspired by successful class-action strategies against other sectors such as pharmaceuticals and social media. What makes Stake’s situation particularly precarious is its dual dependency: it relies on crypto infrastructure that is sensitive to compliance actions and on celebrity marketing that collapses quickly under public criticism. The more the company is associated with alleged misconduct, the greater the reputational contagion across its partners, affiliates and suppliers.

Stake’s public statements have so far been sparse. Neither Craven nor Tehrani has issued detailed commentary on the lawsuits, while Drake’s representatives have declined to respond to press inquiries. Silence, however, may not be a sustainable strategy. As regulatory momentum grows, failing to engage publicly can be interpreted as tacit acknowledgment of vulnerability.

Stake’s structural weaknesses

Behind the headlines lies a deeper structural problem. Stake’s global network is built on Curaçao-licensed entities, intermediary corporate holdings and offshore marketing affiliates. This framework allows operational agility but also fragments accountability. When lawsuits arise, identifying the responsible legal entity becomes complex, creating procedural delays but not necessarily immunity.

In your earlier Malta-Media report titled “The Dark Side of Stake” (February 2025), it was already noted that ownership chains and operating jurisdictions were deliberately opaque, with several websites redirecting users to distinct subdomains depending on geography. Such architecture, once considered a clever regulatory workaround, now functions as evidence of intent to avoid oversight.

Courts in the United States appear increasingly willing to treat such configurations as unified enterprises, piercing the corporate veil to reach the individuals behind them. The California and Missouri cases both signal that approach by naming Craven and Tehrani personally.

If these actions succeed, they could establish a precedent whereby founders of online gambling firms can no longer shield themselves behind holding structures when their brands are accused of illegal operations.

Potential consequences for the wider industry

The ramifications of Stake’s legal exposure extend beyond the company itself. Game-studio suppliers, affiliate marketers, streaming platforms and payment facilitators are all watching closely. The inclusion of established European suppliers in the California suit challenges the long-standing assumption that content distribution absolves studios of responsibility for downstream use.

If courts rule that suppliers must verify the licensing status of operators, this could reshape commercial relationships across the industry. Studios might be compelled to terminate contracts with unlicensed operators, while affiliates could face new obligations to disclose sponsorship terms and player jurisdictions.

From a compliance standpoint, regulators such as the UK Gambling Commission, the Malta Gaming Authority and the Gibraltar Financial Services Commission may interpret these U.S. proceedings as indicators that due-diligence expectations are rising globally.

Investor sentiment and reputational fallout

Stake’s valuation, once a point of pride for its founders, now stands on uncertain ground. Private-market analysts who track cryptocurrency-based gaming firms have begun to downgrade their internal assessments of Stake’s long-term viability. Some cite concerns that the lawsuits could restrict access to major payment gateways and reduce partner confidence.

The reputational consequences for its suppliers are equally severe. Companies like Evolution and Hacksaw Gaming, both publicly associated with regulated markets, now find their names appearing in U.S. legal filings alleging participation in illegal activity. Even if no wrongdoing is ultimately proven, the optics alone creates discomfort for shareholders and regulators alike.

Affiliate partners are also beginning to distance themselves. Several mid-tier marketing networks have reportedly delisted Stake promotions from their platforms in anticipation of stricter advertising guidelines. The ripple effect could soon reach the content-creator ecosystem that Stake has heavily relied upon for visibility.

Legal experts weigh in

Legal commentators note that the defining feature of the 2025 Stake litigation wave is its breadth and personalisation. Rather than focusing on a single corporate defendant, plaintiffs are distributing liability across individuals, suppliers and promoters.

Gaming-law practitioners in the U.S. have observed that this strategy mirrors earlier cases in which class-action lawyers targeted entire distribution chains, forcing settlements that collectively restructured an industry. While Stake may have sufficient capital to mount a defence, the cumulative cost of parallel litigation across seven states could be financially and operationally draining.

As one observer put it, “Stake’s risk profile is no longer commercial; it’s existential.”

International regulatory implications

Outside the United States, the consequences may extend to jurisdictions that have so far tolerated loose oversight of crypto casinos. Regulators in Malta, Gibraltar and the Isle of Man are already under pressure to demonstrate effective AML and consumer-protection frameworks. The Stake cases may embolden critics who argue that light-touch regimes indirectly enable offshore gambling enterprises.

The Curaçao Gaming Authority (CGA), still in the process of reforming its licensing structure, faces renewed scrutiny over its historic leniency. Should U.S. courts ultimately confirm that Stake operated unlawfully while holding a Curaçao licence, the CGA’s credibility could suffer collateral damage!

Market sentiment: early indicators of retreat

The Tanzanite data shared by Dominic Sawyer is perhaps the clearest sign of Stake’s weakening market position. A one-week decline of over 22% for Stake and 82% for Stake US suggests a sharp contraction either in user activity or transaction processing.

In financial markets, such volatility typically precedes deeper structural adjustments. For Stake, this could mean liquidity shortages, affiliate-payment delays and reduced marketing budgets. If these trends persist, Stake could face the very scenario it once believed itself immune from – a liquidity squeeze driven by reputational risk.

Lessons for regulators and industry participants

The Stake saga encapsulates many of the unresolved issues in modern online gambling: jurisdictional arbitrage, influencer marketing, supplier responsibility and consumer protection in digital environments.

For regulators, it demonstrates the need for coordinated enforcement across borders. For operators, it serves as a cautionary tale about the illusion of regulatory immunity. For influencers and affiliates, it signals a new era of personal liability.

Each lawsuit against Stake is not merely a legal challenge but also a policy statement: that the era of unchecked crypto-gambling expansion may be ending.

Final thoughts and conclusion

Stake’s trajectory now appears to be bending decisively downward. What began as an innovation story in crypto gaming has become a cautionary example of overreach and legal exposure. With seven lawsuits across the United States, personal liability for its founders and public scrutiny of its celebrity endorsers, Stake is no longer simply a disruptive brand – it is a legal case study in corporate vulnerability.

The decline in deposit volumes reported by Tanzanite adds a quantitative dimension to this narrative, hinting that consumer confidence is eroding faster than the company can repair its image. Suppliers named in the California lawsuit must now reckon with potential secondary exposure, while influencers like Drake and Adin Ross face the uncomfortable prospect of direct liability.

As your earlier Malta-Media articles on Stake, influencer marketing and Curaçao licensing reform have shown, structural weaknesses eventually manifest in enforcement. The current wave of litigation may therefore represent not a temporary crisis but the beginning of a structural collapse.

Stake’s future will depend on its ability to negotiate settlements, restructure operations and obtain credible licences in jurisdictions willing to oversee crypto-based gambling. Whether that transformation occurs before regulators or consumers withdraw entirely remains uncertain.

For now, however, the signs are unmistakable. Stake’s empire, built on speed, influence and spectacle, is losing its footing. And if current legal and financial trends persist, the question may no longer be whether Stake can survive – but how much longer it can remain standing at all.

FAQs

What is happening to Stake in 2025?
Stake is facing seven major lawsuits across multiple U.S. states, involving allegations of illegal gambling, deceptive practices, and influencer misconduct.

Who founded Stake?
Stake was co-founded by Ed Craven and Bijan Tehrani, who are now personally named as defendants in several U.S. lawsuits.

Why are Stake’s founders being sued?
They are accused of operating an illegal gambling platform disguised as a sweepstakes model, violating state gambling laws.

Which celebrities are involved in the lawsuits?
Drake and Adin Ross, two of Stake’s most visible brand ambassadors, are being sued in Missouri for promoting illegal gambling activities.

What are the main allegations against Stake?
Lawsuits allege deceptive marketing, unlawful gambling operations, and misuse of influencers to attract players.

What is the sweepstakes model used by Stake US?
Stake US claims to operate under a sweepstakes structure using “Gold Coins” and “Sweeps Coins,” but regulators argue it mimics real-money gambling.

Which game suppliers are mentioned in the lawsuits?
Studios like Evolution, Pragmatic Play, and Hacksaw Gaming are accused of enabling unlawful gambling through content supply.

How have Stake’s crypto deposits been affected?
According to analytics data, Stake’s deposits dropped by over 22%, and Stake US saw an 82% fall in one week in October 2025.

What could be the impact of these lawsuits on the iGaming industry?
The cases could set new legal precedents for influencer accountability, supplier responsibility, and stricter compliance enforcement.

What might happen next for Stake?
If courts rule against Stake and its founders, the company could face massive fines, loss of market access, and irreversible reputational damage.