Ryan Seacrest Sued for Allegedly Promoting Illegal Gambling

5/3 5:23 PM PT -- A spokesperson for Chumba Casino tells TMZ it "operates its social casino in strict compliance with all applicable laws and regulations.  This lawsuit has no merit and Chumba will vigorously defend its legal right to operate its business."

The rep adds, "Our brand ambassador Ryan Seacrest is not involved in the operation of Chumba’s business, and it is unfortunate that he has been unfairly targeted as part of this suit."

2:25 PM PT -- A source close to the situation tells TMZ this is just a nuisance lawsuit.

Ryan Seacrest is breaking California law by promoting an illegal online casino ... at least according to a new lawsuit.

The "American Idol" and "Wheel of Fortune" host is being sued by a California resident named Aubrey Carillo, who allegedly lost money on an online casino Ryan often promotes on social media.

In the lawsuit, obtained by TMZ, Carillo claims ChumbaCasino.com is operating illegally in California and Ryan is serving as the operation's official celebrity endorser.

Carillo claims Ryan is promoting illegal gambling by posting paid advertisements for Chumba on social media and by appearing in promotional materials on the Chumba Casino website.

As a result, Carillo claims Ryan is contributing to the rise of online gambling addiction among adults and adolescents ... and they say at least one child in their family accessed the website.

The suit claims the online casino has been banned from operating in several states but is still up and running in California.

Carillo is going after Ryan and Virtual Gaming Worlds and asking for an injunction to shut down the website in California and stop Ryan from getting any more money generated by the gambling site.