Another lawsuit against a sweepstakes operator is headed to arbitration after a recent court decision in California.
U.S. Central California District Court Judge James Selna granted Sweepsteaks Limited’s motion to compel arbitration after Dennis Boyle, a California resident and former gambling addict, filed a suit against the company, claiming it was providing an illegal gambling website through Stake.us.
The suit, originally filed in February, was remanded moving the case from state court to federal court. Selna later granted the motion to compel arbitration after oral arguments.
Sweepsteaks argued that Boyle agreed to “arbitrate any dispute” with the company when he created his Stake.us account and agreed to the platform’s terms and conditions.
Stake.us’ terms and conditions include an opt-out provision for arbitration, which requires sending a notice to Sweepsteaks. The owner of Stake.us argued that Boyle did not provide any notice, therefore confirming his agreement to adhere to its terms and conditions.
The arbitration agreement waives the right for the issue to proceed in a court of law or have claims heard by a jury. The arbitration will be conducted virtually by a single arbitrator.
This is not the first time a sweepstakes case has been sent to arbitration rather than litigated in the courts. A California case against Fliff sweepstake sportsbook was sent to arbitration last year.
Plaintiff’s case against Pulsz remains on hold
Boyle also has a pending suit against the owner of social casino Pulsz.
Prior to filing his claim against Stake.us, Boyle sued Yellow Social Interactive in Orange County alleging the Pulsz owner of operating an offshore criminal enterprise. The suit claims Pulsz tricks users into engaging with the platform by using euphemisms including “social gaming” and “sweepstakes.” Boyle argued that digital currencies offered by Pulsz are a pretext for real-money gambling and that the platform doesn’t randomize results for its social casinos.
The case also raised concerns about Pulsz’s responsible gaming standards as the platform informs users not to seek problem gambling treatment unless their symptoms have “sufficient severity” and have “been evident for at least 12 months.”
Given the common subject matter across both the Stake.us and the Pulsz lawsuit, both Boyle and Yellow Social Ineractive requested a 45-day stay in the case to see what the result would be in the Stake.us venture. The judge granted the stay and the case is scheduled to pick back up in June.
It is unclear how the motion to compel arbitration in the Stake.us case will impact the future of the Pulsz case.
Multiple legal proceedings for Stake.us
The online gambling platform is also facing a lawsuit in Alabama.
The class action suit was filed by an Alabama mother, Laura Hall, and her minor child claiming the child suffered harm due to his mother losing her wages while wagering with Stake.us. Hall and her child allege Stake.us of running an illegal gambling operation in Alabama—a state where gambling is “constitutionally and statutorily prohibited.”
Stake.us is also being sued in Illinois by Brayden Urdan, who alleges the platform of running a copy of its real-money casino brand, Stake.com, as a free-to-play site.
Urdan claims Stake.us unjustly enriched itself by offering a workaround to offer prohibited gaming through its dual-currency system.
Both of these cases are awaiting responses from Stake.us regarding the intial complaint.
