The makers of Monopoly are suing the man behind a satirical version called Ghettopoly in which "playas" compete to build crack houses.
Hasbro are seeking unspecified damages from Mr David Chang, alleging he violated the company's trademarks and caused "irreparable injury" to their reputation.
It also wants Pennsylvania-based Mr Chang to stop producing and selling Ghettopoly.
"The Ghettopoly knockoff has generated a firestorm of controversy for its highly offensive, racist content," said the legal action.
Ghettopoly's game-pieces include a gun and marijuana leaf, while its logo is a caricature of a black man holding a submachine-gun and bottle of liquor.
The game angered minority leaders this month after it began selling at Urban Outfitters stores.
Commenting on the lawsuit, Mr Chang (28) said: "I just can't believe they are doing that." He added he intends to fight the lawsuit.
AP
