California Judge Moves Stake.us Lawsuit to Arbitration

lawsuit accusing the sweepstakes-based gaming platform of illegal gambling must proceed through private arbitration, rather than the public court system. The decision effectively halts litigation and shifts the case into a more confidential resolution process.

Arbitration Ordered in California Case Against Stake.us

Judge James Selna of the U.S. District Court for the Central District of California granted a motion from Sweepstakes Limited, the company behind Stake.us, compelling arbitration in a case filed by California resident Dennis Boyle. Boyle, who identifies as a recovering gambling addict, accused Stake.us of operating an illegal online casino under the guise of a promotional sweepstakes platform.

Initially filed in state court in February, the case was later moved to federal court. After oral arguments, Judge Selna sided with Sweepstakes Ltd., concluding that Boyle had agreed to the site’s and conditions—which included a clause mandating arbitration—when he ed for an .

Although Stake.us’s agreement provides an option to opt out of arbitration by notifying the company, Boyle did not do so. The judge ruled that the arbitration clause was neither unconscionable nor hidden, and stated, “The Court can only conclude that there is no procedural unconscionability as Boyle has failed to meet his burden.” The ruling confirms that a single arbitrator will now conduct the proceedings virtually.

Boyle’s Allegations and the Wider Legal Landscape

Boyle’s lawsuit contends that Stake.us uses its digital currencies—Gold Coins and Stake Cash—to simulate real-money gambling. He argues that the platform targets California s and operates in violation of state gaming laws, including California’s Unfair Competition Law. The complaint also accuses the company of using algorithms that allegedly do not generate truly random outcomes.

His legal team sought injunctive relief to shut down the platform’s operations in the state, claiming that Stake.us lacks proper registration and licensing. While this ruling halts court proceedings for now, Boyle’s concerns about illegal gambling practices continue to resonate as similar platforms face growing legal scrutiny.

The Social and Promotional Games Association (SPGA) welcomed the court’s decision. A spokesperson commented, “This ruling affirms what we’ve long said: Social sweepstakes sites are not gambling. They are free-to-play games enjoyed responsibly by millions of American adults, and no purchase is ever necessary to play or have a chance to win prizes. Anyone can file a lawsuit making any claims they like. This ruling is a reminder that facts – and the law – still matter.”

Connected Legal Actions and Implications

Boyle is also pursuing a separate lawsuit against Yellow Social Interactive, the owner of Pulsz, another sweepstakes-style gaming site. That case, which alleges misleading practices and poor responsible gaming standards, is currently paused for 45 days pending developments in the Stake.us arbitration outcome. It is scheduled to resume in June.

Source:

“CA judge sends sweeps case involving Stake.us to arbitration”, sbcamericas.com, May 29, 2025