The U.S. federal judge has dismissed the attempt of Stake.us to move the Minnesota class-action suit for arbitration and allowed the case to proceed in the court.
The ruling came without declaring the arbitration clause invalid. Instead, the judge mentioned that Stake.us was unable to prove that the plaintiff had indeed agreed to its terms and conditions while registering on the website.
This ruling is momentous because the casino companies have relied on arbitration clauses for a long time. Courts, generally, upheld these requirements, which forced the disputes into arbitration proceedings rather than allowing lawsuits.
Currently, Stake.us is facing several lawsuits for its casino model based on the dual currency. The ruling in Minnesota could make it more difficult for the company since it could lead to a class-action lawsuit in other states as well. If the Stake.us Minnesota case moves forward as a class action lawsuit, the settlement pressure will be different from the individual arbitration risk exposure.
Stake operates in a sector where the departure of Escalante from VGW and the lawsuit filed by the Kentucky attorney general against VGW have already made the industry more visible in the legal sense. Adding a class action that is outside the reach of arbitration in a market where the authorities have shown they can take action on sweepstakes companies creates a completely new legal environment for the industry.
The potential class-action lawsuit could make it harder for Stake.us to avoid settling. Provided that previous lawsuits against companies in the same field ended with settlements and changes in their policies.