A federal judge has ruled that a proposed class action lawsuit against Stake, Kick, and rapper Drake cannot continue in court at this time. Instead, the dispute will move to arbitration, after the court determined that the plaintiffs had agreed to resolve legal disputes through Stake's Terms and Conditions when using the platform.
According to a court order filed on July 30, U.S. District Judge Leonie M. Brinkema granted Stake's request to compel arbitration and officially stayed the legal proceedings. The judge also denied Stake's motion to dismiss the lawsuit as unnecessary because the case is now being handled through arbitration. The remaining motions have been put on hold until the arbitration process is completed.
The lawsuit was filed in the U.S. District Court for the Eastern District of Virginia, Alexandria Division, where a group of plaintiffs sought to bring a class action on behalf of other users who claim they were harmed while using Stake's online platform.
In their complaint, the plaintiffs alleged that Stake misled customers by presenting its platform as a free social gaming experience while allegedly allowing users to participate in real-money gambling through its virtual currency system.
According to the lawsuit, Stake advertises that it "does not offer real money gambling," that "no purchase or payment is necessary to participate or play [Stake] games," and that it provides "the ultimate social, safe and free gaming experience." However, the plaintiffs argue those statements are misleading because users purchase Gold Coins, which are bundled with Stake Cash, a digital currency that can reportedly be redeemed at a one-to-one value for U.S. dollars.
The lawsuit claims this system effectively allows real-money wagering despite being presented as a virtual gaming platform. The plaintiffs sought damages and other legal remedies, arguing that consumers were not properly informed about how the platform operates.
Several high-profile names were included as defendants in the lawsuit, including online gambling platform Stake, streaming platform Kick, Canadian rapper Drake, and internet personality Adin Ross, all of whom have been associated with promoting Stake through sponsorships and livestreams.
The judge's decision focused on the arbitration clause contained in Stake's user agreement. After reviewing the case, the court concluded that the plaintiffs had accepted those terms when using the platform and were therefore required to settle their dispute through private arbitration rather than through a public court trial.
As a result, the lawsuit has been removed from the court's active docket while arbitration moves forward. This does not mean the plaintiffs' claims have been dismissed. Instead, they will now be heard in a private arbitration process, where an arbitrator will determine how the dispute should be resolved.
Stake operates an online gaming platform offering casino-style games such as slot machines, table games, scratch cards, and live dealer games. The outcome of the arbitration could determine whether the plaintiffs' claims proceed further or whether the dispute is resolved outside the traditional court system.
