A federal judge in Minnesota rejected Stake.us’s bid to send a proposed class action to arbitration, clearing the way for the dispute to continue in court. U.S. District Judge John Tunheim held that the company had not shown there was a valid, enforceable arbitration agreement with plaintiff Chris Wolters.
In the July 1 order, the court gave two independent reasons for denying the motion. Stake failed to prove that Wolters had agreed to any contract, and it also failed to establish that the underlying terms and conditions were valid under Minnesota law.
Tunheim said Minnesota law treats contracts formed in violation of statutes that prohibit regulated conduct as void. He wrote that if Stake’s terms and conditions were a contract entered into in violation of Minnesota’s gambling statutes, the court had to treat that contract as “invalid and nonexistent.” Because the arbitration clause was tied to the validity of the broader terms and conditions, the judge said it could not be severed and enforced on its own.
Stake had argued that Wolters was bound by arbitration because he accepted the site’s online terms during account registration. The company relied mainly on a declaration from its founder and an internal screenshot that it said related to Wolters’s account, but the court found the image did not identify Wolters by name or otherwise show that he personally assented.
Wolters filed the proposed class action in August 2025. His complaint alleged that Stake.us operated a real-money internet casino in which users bought digital tokens, wagered them on casino-style games, and redeemed winnings for cryptocurrency that could be converted into U.S. dollars.
The complaint said the platform featured games including virtual scratch-off tickets and live blackjack. It also alleged that players could not participate without wagering Stake Cash or Gold Coins, that Stake Cash was redeemable for cryptocurrency at an implied 1-to-1 ratio with the dollar, and that the site marketed itself as a social casino while representing that no purchase was needed and no real-money gambling was offered.
Wolters also alleged that he used the platform from April 2023 to February 2025, lost more than $80,000 and entered recovery for a gambling addiction. He sought to recover those losses under Minnesota Statutes Section 541.20 and brought five causes of action, including claims under the Minnesota Consumer Fraud Act, the Minnesota Deceptive Trade Practices Act, the Minnesota False Statement in Advertising Law and unjust enrichment.
His complaint further alleged that Minnesota public policy limits gambling to lawful gambling such as bingo, raffles, paddlewheels, tipboards and pull-tabs conducted under Chapter 349 and Minnesota Gambling Control Board rules. It said a state gambling licence is required, that Stake did not have one, and that the company could not obtain one because it is not a non-profit organisation.
The complaint also said receiving and recording bets is a gross misdemeanor under Minn. Stat. § 609.76, subd. 1(7), and that Stake’s games were gambling devices set up for the purpose of gambling under Minn. Stat. § 609.76, subd. 1(4). Judge Tunheim wrote that Wolters had alleged facts showing Stake’s terms and conditions were an illegal gambling operation and that Stake had not yet presented evidence to the contrary.
Wolters’s lawyer, Vildan A. Teske, said he was pleased with the ruling and looked forward to litigating the case on behalf of Wolters and other Minnesotans affected by Stake.us. The court said arbitration could not be compelled at that stage and that a limited trial on contract formation would be required.
