A federal court has decided to move forward with a proposed class-action lawsuit against Stake.us, which is accused of running an illegal online gambling platform in Minnesota. This decision comes after a judge rejected the company's request to compel arbitration.
The lawsuit, initiated by plaintiff Chris Wolters, outlines five claims on behalf of himself and others in Minnesota who find themselves in similar situations. Wolters aims to recover his gambling losses under Minnesota Statutes Section 541.20, while also alleging breaches of the Minnesota Consumer Fraud Act, the Minnesota Deceptive Trade Practices Act, and the Minnesota False Statement in Advertising Law. Additionally, the lawsuit includes a claim for unjust enrichment.
Wolters filed this legal action in August 2025, claiming that Stake.us operated unlawfully in Minnesota by misleading residents about the legality of its services and retaining funds lost by users through gambling activities. He reported losses exceeding $80,000 while using the platform from April 2023 to February 2025 and has since sought treatment for gambling addiction.
The complaint states that Stake.us operates as a real-money online casino, enabling users to buy two types of virtual currencies: Gold Coins and Stake Cash. Players can bet these currencies on casino games, win Stake Cash, and then exchange it for cryptocurrency, which can ultimately be converted into U.S. dollars.
In an attempt to resolve the matter outside of court, Stake.us argued that Wolters had agreed to its online terms and conditions when he registered. These terms include an arbitration clause pertaining to disputes about the agreement’s validity and enforceability.
To bolster its argument, Stake.us provided a declaration from its founder asserting that users must accept the terms before creating an account, along with a screenshot purportedly linked to Wolters’s account.
However, U.S. District Judge John Tunheim concluded that Stake.us failed to prove the existence of a valid arbitration agreement. The court emphasized that Minnesota law typically considers contracts formed in violation of statutes that safeguard the public as void.
The judge pointed out that the complaint claims Stake.us operates illegally under Minnesota law, and the company did not adequately address these allegations in its arbitration request, instead suggesting that the legality of its operations should be assessed later in the process.
Judge Tunheim stated, “If 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.” He noted that Wolters presented facts indicating that Stake’s Terms and Conditions represent an illegal gambling operation, and Stake has yet to provide evidence to dispute this.
Furthermore, the court found that the arbitration clause was contingent on the parties’ acceptance of the terms. It ruled that if the main contract is void under Minnesota law, the arbitration clause cannot be enforced independently.
Additionally, the court determined that Stake.us did not prove that Wolters agreed to the arbitration clause personally. The submitted screenshot did not identify him by name or demonstrate that he accepted the terms, rendering the evidence insufficient to confirm a contract was formed.
Even if the court had dismissed Wolters’s argument regarding the contract’s validity due to alleged illegal gambling, a limited trial would still be necessary to ascertain whether an agreement existed before arbitration could be mandated.
“We are pleased with the Court’s decision and look forward to litigating this case on behalf of our client and all other Minnesotans affected by Stake.us’ illegal operations,” said Wolters’s attorney.