In brief
- Drake faces a class-action lawsuit accusing him and Adin Ross of promoting Stake.us, an allegedly illegal gambling site posing as a “social casino.”
- The suit says Stake used digital “Gold Coins” to mask real-money betting and that Drake’s promotions targeted young fans.
- In a potential departure from past celebrity crypto cases, plaintiffs argue Drake knew about the alleged misconduct.
As the proverb goes: As one Drake lawsuit closes, another opens.
This week, as Drake fought to revive his dismissed defamation suit regarding the Kendrick Lamar diss track “Not Like Us”, the Canadian rapper was hit with a class-action lawsuit over his yearslong promotion of Stake, a crypto-fueled online casino.
A class of users of Stake.us, the company’s American subsidiary, have sued Aubrey Graham, better known as Drake—along with internet personality Adin Ross—for promoting the site under “deeply fraudulent pretenses” and directly exposing younger consumers to “significant risks of financial ruin, psychological distress, and gambling addiction.”
The suit, filed in a Missouri county court by Stake.us user Justin Killham earlier this week, also alleges that the “social casino” site is actually an unlicensed online gambling operation that is violating Missouri state laws.
Stake.us promotes itself as a social casino where users can gamble with purchased in-game “Gold Coins” that have no real monetary value. But alongside those digital tokens, the site offers users bundles of “Stake Cash”—a digital currency that can be redeemed at a one-to-one ratio for U.S. dollars, and can also be wagered on its games.
“Despite Defendant’s claim that players are purchasing harmless virtual tokens, the pricing structure and game play reveal that Stake Cash—not Gold Coins—is the real product Stake is selling to entice players into engaging in real-money gambling,” the lawsuit alleges. “The Gold Coins merely serve to deceive regulators and lure players under the guise of ‘safe’ entertainment.”
The lawsuit goes on to assert that Drake’s long-running promotion of Stake—which has netted him millions of dollars a year—has played a significant role in expanding the site’s popularity, particularly with young people.
The rapper has on numerous occasions livestreamed himself wagering huge amounts of money on Stake games, and promotes the site on his widely followed social media accounts. The lawsuit alleges that on many occasions, Drake and Adin Ross were not wagering their own money on such bets, but “house money” provided by Stake, which if not disclosed would be a further violation of Missouri state law.
“[Drake’s] public wagering of enormous sums on Stake.com has created what industry experts call the ‘Drake Effect’—massively boosting the Stake brand’s popularity, especially among younger, impressionable audiences who admire Drake’s glamorous lifestyle,” the filing reads.
Drake has also shared receipts of large Bitcoin-based wagers on sporting events—although he’s often been on the losing end of high-profile Bitcoin bets, including a total of $1 million wagered on last year’s NBA Finals and Stanley Cup Finals.
The legal fight is reminiscent in some respects of lawsuits filed in the wake of FTX’s 2022 collapse, against celebrity promoters of the crypto exchange, including Larry David and Tom Brady. Ultimately, most of those suits were dismissed—but mainly because the celebrities had no knowledge of FTX’s internal fraudulence.
In contrast, most of the allegations made in this week’s Stake lawsuit do not involve secret internal company information unknown to promoters like Drake and Ross.
The suit also comes at a time when existing American gambling laws are being tested by all manner of insurgent newcomers. Experts told Decrypt earlier this week that the advent of sports-focused prediction markets, which are attempting to sidestep gambling regulations, has created numerous issues for authorities and could lead to a proliferation of insider trading.