Judge Denies Stake.us Motion to Arbitrate Minnesota Lawsuit

A Minnesota federal judge has denied a motion from Stake.us, an online sweepstakes casino, and their motion for arbitration in a proposed class-action lawsuit. The lawsuit came from allegations that the online sweepstakes casino is operating in the state as an illegal gambling outfit, according to Minnesota Lawyer.

The denial came after the court said that Stake "failed to demonstrate the existence of a valid arbitration agreement." 

The lawsuit, filed by plaintiff Chris Wolters in August 2025, alleged that Stake.us operates a real-money internet casino that allows players to purchase virtual currencies (Gold Coins and Stake Cash) to wager on casino-like games, win Stake Cash, and redeem them for cryptocurrency, which is then converted into USD. 

Wolters lost more than $80,000 between April 2023 and February 2025 and then entered treatment for a gambling addiction. He's seeking the recovery of gambling losses under Minnesota Statutes Section 541.20. 

Court Rejects Stake.us' Arbitration Arguments

Stake.us attempted to pursue arbitration, claiming that Wolters agreed to the company's online terms and conditions during the account registration process. However, the court didn't find that. According to Minnesota Lawyer, "Stake.us had not established the existence of a valid contract because Minnesota law generally treats contracts entered into in violation of statutes prohibiting regulated conduct as void."

“[I]f Stake’s Terms and Conditions are a contract entered into in violation of Minnesota’s gambling statutes, the Court must treat that contract as invalid and nonexistent,” wrote U.S. District Judge John Tunheim. “Wolters has alleged facts demonstrating that Stake’s Terms and Conditions are an illegal gambling operation, and Stake has not yet presented any evidence to the contrary.”

Also, the court found that Stake.us independently failed to prove that Wolters ever agreed to the arbitration provision. 

Lawsuit Will Continue in Federal Court

“We are pleased with the Court’s decision and look forward to litigating this case on behalf of our client and all of the other Minnesotans who have been impacted by Stake.us’ illegal gambling website," the plaintiff's attorney, Vildan A. Teske, said to Minnesota Lawyer. 

Minnesota Lawyer also reached out to Stake.us, but there was no mention of a comment. 

Stake.us has dealt with many lawsuits, namely in Los Angeles, in a suit that was filed against Stake.us, the streaming service Kick, and gaming suppliers.