The lawyers for two online sweepstakes operators, Stake.us and Chumba Casino (VGW), are leveraging a 2025 federal appellate decision to challenge the legitimacy of class-action lawsuits in Maryland, Illinois, and Utah.
Their lawyers argue that a ruling in the U.S. Sixth Circuit Court of Appeals in the Churchill Downs v. Michigan case means a federal regulatory agency has jurisdiction over sweepstakes site laws. If the argument stands, it would mean that state and city laws against dual-currency sweepstakes casinos cannot be enforced. The lawsuits would be dismissed.
The case in question is Churchill Downs v Michigan Gaming Control Board, which was filed in the U.S. District Court for the Western District of Michigan on January 12, 2025.
On February 19, 2025, U.S. District Judge Hala Y. Jarbou issued an injunction against Twinspires, Churchill Downs’ electronic platform. Twinspires lawyers launched an appeal in the Sixth Circuit, which ruled on the case on December 16, 2025.
On January 6, 2026, the appellate court issued its own injunction, stating the federal Interstate Horseracing Act (IHA) rules in the case. This gives the federal Commodity Futures Trading Commission (CFTC) authority to set regulations for electronic platforms — not state authorities.
Operators in several online gambling-related industries have used the argument in lawsuits filed against them, including in New York and Ohio. The lawyers for Chumba Casino and Stake recently adopted the strategy in their own cases.
The legal argument cites the CFTC as a nationwide “gold standard” for regulations on online gambling platforms, so states cannot restrict play on those sites. If the Sixth Circuit’s injunction stands, it could change how states approach the online sweepstakes casino industry.
On April 7, 2025, the class-action law firm Edelson PC filed suit against Stake.us and Chumba Casino. The sites filed a motion to dismiss the case, arguing that the main plaintiff had agreed to their terms of service.
Lawyers for the plaintiff, Brayden Urdan, argued that the sites’ terms of use were poorly constructed and should not be enforced. In August 2025, the court ruled in favor of the plaintiff.
That allowed the case (Urdan v. Sweepsteaks Limited) to proceed, and it remains active in the U.S. District Court for the Northern District of Illinois.
As many as 23 lawsuits were filed against Stake.us and Chumba Casino in Utah. Three waves of suits were filed in October, November, and December 2025 by a coalition of law firms, including Gucovschi Law Firm PLLC, Hedin LLP, and Peters Scofield.
These cases remain active in the U.S. District Court for Utah currently. The courts have handed down no final merit decisions as of yet.
The legal strategy is also being used in a lawsuit filed by the City of Baltimore in March 2026 against VGW, Stake.us, Pulsz Casino, McLuck, High 5 Games, and Fortune Coins.
The suit argues the sites are violating the Consumer Protection Ordinance and thus are evading state taxes while targeting minors with advertising on TikTok and Instagram. The DiCello Levitt law firm, representing the city, argues that platforms operate as unauthorized and illegal gambling rings.
In this case, the logic is that federal law trumps city ordinances, too. So long as the appellate decision in Churchill Downs v Michigan Gaming Control Board stands, the legal argument might hold weight in all three decisions.
The Michigan appellate decision could be appealed to the U.S. Supreme Court, but that is uncertain at present.
