A federal court in California has ordered that a lawsuit against Stake.us, accusing it of running an illegal online casino, be handled through arbitration. The decision stems from the platform’s user agreement, which the plaintiff accepted when registering for the site.
Good to know
- The case involves Stake.us, operated by Sweepsteaks Ltd..
- Arbitration was enforced based on user agreement terms.
- The lawsuit challenges the legality of the sweepstakes casino model in California.
The United States District Court for the Central District of California has referred the case of Boyle v. Sweepsteaks Ltd. to arbitration. The plaintiff, Dennis Boyle, filed the lawsuit in March, claiming that Stake.us functions as an unlawful online casino under California law.
Boyle argued that the platform’s sweepstakes-based model mirrors those used by sweepstakes cafes, which courts have previously ruled illegal. He sought to challenge the operation of Stake.us on the grounds that it violates the state’s gambling laws.
Stake.us Points to User Agreement
Sweepsteaks Ltd, which runs Stake.us, responded by pointing to its terms and conditions. When Boyle signed up on November 29, 2022, he agreed to resolve all legal disputes through arbitration. Based on that agreement, the company filed a motion to compel arbitration, asserting that the court should not hear the case directly.
Boyle pushed back, arguing that the arbitration clause should not apply if the company is engaged in illegal activity. He claimed the entire user agreement would be void if Stake.us were found to be operating unlawfully.
Court Rules Arbitration Must Come First
U.S. District Judge James V. Selna sided with Sweepsteaks Ltd. He ruled that the issue of legality must be decided only after arbitration is completed. The judge emphasized that because the plaintiff had agreed to arbitration at the time of registration, the court was obligated to enforce that agreement first.
The decision means the case will move forward through private arbitration, rather than in open court. Only after that process will there be a chance to evaluate whether Stake.us has violated gambling laws in California.
In related news, a lawsuit filed in April in Illinois seeks to recover losses linked to gameplay on the social casino platform Stake.com. The case, brought by Brayden Urdan, is supported by the legal team that previously secured a $25 million settlement in a case against High 5 Games.
The post Stake.us Lawsuit Sent to Arbitration by Federal Judge appeared first on iGaming.org.