The Los Angeles City Attorney’s Office has filed a civil lawsuit against Stake.us, its streaming partner Kick, co-founders Ed Craven and Bijan Tehrani, and over a dozen gaming suppliers.

This is the first time a government agency has taken legal action against a sweepstakes casino in the United States, setting a significant precedent for the industry.

The lawsuit, filed in California Superior Court, alleges that the defendants operated an illegal online gambling business, violating California’s Unfair Competition Law and False Advertising Law. Prosecutors are seeking an injunction to shut down Stake.us in California, reimbursement for residents’ losses, and penalties of up to $2,500 per violation—going up to $7,500 if seniors or disabled people are affected. Given the platform’s size, the potential financial consequences could be substantial.

City Attorney Hydee Feldstein Soto, who is the first woman and Latina to serve in this position, is leading the case alongside Susman Godfrey LLP, the same law firm suing another sweepstakes operator, Virtual Gaming World (VGW). Many believe this partnership could lead to more legal actions throughout California.