Federal Judge Orders Stake.us Lawsuit to Arbitration
California Federal Court Refers Sweepstakes Casino Legality Dispute to Arbitration
In a significant legal development, the ongoing lawsuit filed by Dennis Boyle against Stake.us, a sweepstakes casino platform operated by Sweepsteaks Ltd., will proceed through arbitration instead of in a public trial. The decision was made by U.S. District Judge James V. Selna in the United States District Court for the Central District of California.
Boyle initially filed the lawsuit in March, accusing Stake.us of operating an illegal online casino in violation of California's gambling laws. The plaintiff argued that the platform's sweepstakes-based model, reminiscent of illegal sweepstakes cafes, served as a disguise for real-money gambling.
Sweepsteaks Ltd, responding to the lawsuit, pointed to the terms and conditions signed by Boyle when he registered with Stake.us. The agreement stipulates that all legal disputes be resolved through arbitration. Consequently, the company filed a motion to compel arbitration, claiming that the court should defer to this agreement.
Boyle, resisting the arbitration clause, asserted that it shouldn't apply if the company was found operating unlawfully. He suggested the entire user agreement would be void in such a scenario. However, Judge Selna ruled in favor of Sweepsteaks Ltd., stating that as Boyle had agreed to arbitration during registration, the court was obligated to enforce that agreement.
This decision means the case will progress through private arbitration before being addressed in a court of law. The arbitration process will determine whether Stake.us has indeed violated California's gambling laws.
In another related development, a lawsuit was filed in April in Illinois, aiming to recover losses linked to gameplay on the social casino platform Stake.com. This case, filed by Brayden Urdan and supported by the legal team that previously secured a $25 million settlement in a case against High 5 Games, is still ongoing.
This California-based dispute marks an essential case study in the legal interpretation of sweepstakes casino models. As this matter progresses, the outcome may influence the future of online gaming in the United States.
The ongoing dispute between Dennis Boyle and Sweepsteaks Ltd, regarding the legality of Stake.us, a sweepstakes casino, will now be resolved through private arbitration, as per the terms and conditions Boyle agreed to upon registration. With this decision, the future of similar business models in the finance sector, specifically online gaming, could be influenced.
Moreover, another lawsuit, filed in April in Illinois, is seeking to recover losses connected to gameplay on the social casino platform Stake.com, potentially setting a precedent in the interpretation of sweepstakes casino models in the United States.
