A federal judge did not decide if Stake.us sweepstakes casino broke the law. Instead, the judge sent the dispute to arbitration. This is a key procedural result for Sweepsteaks Ltd, the parent company. mLast week, the US District Court for the Central District of California accepted Sweepsteaks’ request for arbitration. Now the case pauses while an arbitrator examines the matter.

Boyle Alleges Stake.us Offers Illegal Gambling

California resident Dennis Boyle started this case. He says Stake.us operates illegal online gambling, which goes against state law. Boyle states the site’s sweepstakes model uses “Gold Coins” and “Stake Cash.” He believes these features make it similar to real-money gambling, not just a sweepstakes.

He says he struggles with gambling dependence. Boyle claims the website targets people in California and uses algorithms that, in his view, are not random. Boyle’s lawyers used California’s Unfair Competition Law in their argument. They say Stake.us is missing the needed registration or licenses. They asked for a court order to block the business in the state.

Stake.us is part of Stake.com, a global crypto gambling company. They say that the sweepstakes system is legal. No users must pay to play or win on the site. Boyle first filed the case in Orange County Superior Court. Later, the lawsuit went to federal court. Boyle tried but failed to return it to state court.

Court Sides with Stake on Arbitration Clause

Stake.us said Boyle agreed to settle conflicts by arbitration when he joined and accepted the terms and a broad arbitration clause. This agreement let users choose to opt out, but Boyle did not do this. According to the court, the arbitration clause firmly gives the arbitrator the duty to decide if arbitration is proper, instead of the judge.

Boyle said the arbitration clause was unfair and called the contract illegal, but the court found nothing unfair with the agreement, especially because Boyle could have opted out and there was no force or trick. The judge said Boyle did not prove the contract was procedurally unfair. The court decided Boyle must resolve his claims with Sweepsteaks through arbitration. Now, the case is on hold until binding arbitration ends.

SPGA: “The Law Still Matters”

SPGA, or Social and Promotional Games Association, gave feedback after the court order. They represent social and sweepstakes gaming firms. A SPGA representative said this decision supports the idea that social sweepstakes are not gambling.

The group said these games are free to play, open to US adults, and anyone can play or win prizes without needing to buy in. The statement also said someone can make any claim in a lawsuit, but this ruling reminds people that facts and the law both count.

Boyle’s claims go to private arbitration, but this outcome may guide other cases about sweepstakes sites in the country. Stake.us also faces similar lawsuits in both Alabama and Illinois. NEXT.io contacted Stake for a comment.