A federal judge in Minnesota presiding over a civil lawsuit recently ruled that the mandatory arbitration clause in Stake.us’s terms of service is void. The ruling not only changes how private arbitration works in the sweepstakes casino industry in Minnesota, but it could also affect arbitration cases across the United States.
On July 2, 2026, U.S. District Judge John R. Tunheim rejected a motion by the attorneys of Stake.us to compel aribration in the lawsuit. Judge Tunheim ruled that Minnesota state law strictly prohibits online gambling operations, so the site’s user terms and conditions may be entirely void.
The plaintiff in the case (Wolters v. Sweepsteaks Limited), filed suit on August 15, 2025. Chris Wolters’ lawyers at Teske Law PLLP challenged Stake’s arbitration clauses to compel the case to proceed in civil court.
The defendant tried to prove the plaintiff had agreed to arbitration by submitting a declaration that accepting the terms was mandatory to create an account on Stake. Judge Tunheim found fault with the contract on several grounds.
The submitted screenshot failed to identify Chris Wolters by name or to prove that he assented to that specific version of the user’s agreement. Standard arbitration clauses are treated as “severable” in Minnesota. That means if part of the contract is thrown out in a lawsuit, the remaining clauses survive.
Judge Tunheim noted that Stake’s agreement explicitly stated its own validity rested on the remainder of the contract. He further ruled that the contract’s language was weak enough that it might require a limited trial to determine whether an agreement ever existed.
That would be a limited ruling, but Judge Tunheim further ruled that even if the contract was not void under other Minnesota laws, its involvement in online gambling could void it.
Minnesota’s legislature failed to pass a sweepstakes casino ban in 2026, but the state government has sent two sets of letters of various seriousness to digital operators in the sweepstakes industry.
The Alcohol and Gambling Enforcement Division (AGE), a branch of the Minnesota Department of Public Safety (DPS), sent letters to 14 digital operators in the “social sweepstakes casino” industry in June 2025.
In November 2025, the office of Attorney General Keith Ellison sent cease-and-desist letters to the same 14 operators. The list of those targeted includes VG LuckyLand, Fortune Coins, and Zula Casino.
Ellison’s letters alleged that the sweepstakes casinos were violating Minnesota’s consumer-protection laws. His letter specifically stated that dual-currency systems’ attempts to “rebrand poker chips as virtual currencies do not change the fact that these online gambling operations are unlawful.
The Minnesota AG gave the operators until December 1, 2025, to exit the Minnesota gaming market. While Keith Ellison’s opinion is not a statute, Judge Tunheim ruled it is pivotal in Wolters v. Sweepsteaks Limited.
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The immediate impact of the ruling is that the case will not proceed to arbitration and instead remains in the federal district court in Minnesota. It has wider implications, though.
The federal district judge’s ruling could affect the sweepstakes casino industry in other US states. While voided arbitration clauses might not apply in states with less regulation, the decision could affect states with strong consumer protection laws.
Given that other platforms may have similar arbitration clauses in their terms of service, the ruling could prompt an industry-wide reevaluation of user consent documentation.
