Stake.com deadline nears: Billionaire founder sued by ex partner over marketing of world’s biggest crypto casino

A celebrity party hosted by crypto casino Stake has become a key element in a lawsuit filed by the founders’ former partner who has alleged that he was muscled out of his fair cut.

In September, Stake threw a party in New York to celebrate the release of the film Amsterdam. At the party, A-listers like Drake, Leonardo DiCaprio, Rami Malek and Margot Robbie played poker with Stake-branded chips and were offered Stake swag bags, according to the complaint. It also alleged that celebrity endorsements were a cornerstone of Stake’s marketing strategy, which also targets Americans, despite the nation’s strict anti-gambling laws.

“Stake uses United States-based individuals to attempt to lure players into playing games on Stake.com,” the complaint said.

Edward Craven and Bijan Tehrani are the founders of Stake.com. They and the gaming site’s CEO, Mladen Vuckovic, have been named as defendants in the lawsuit filed by the founders’ former business partner, Christopher Freeman, in a New York court. This week, the deadline for them to respond to the allegations runs out.

Freeman initially sued the three for around $400 million last summer, alleging that they had cut him out of profits from two businesses: Stake and another gambling site called Primedice. Freeman claimed both were his idea and his work helped build them.

In January, Freeman added to his complaint with broader allegations, saying that Stake uses a confusing corporate structure to dodge regulators and that its marketing was targeting consumers in places where gambling is illegal.

Freeman alleged that gamblers in prohibited jurisdictions use virtual private networks to skirt geoblocking in their countries. He claimed that not only is Stake aware of this, but that Craven and Tehrani have actively encouraged the practice.

“Not only is Stake.com availing itself to the markets in the US and New York, but in its effort to penetrate those markets, it is apparently unconcerned with taunting regulators who want to prevent illegal online gambling in the United States,” the updated complaint said.

In an emailed response to DL News, Craven said the complaints against Stake and its founders are “entirely without merit” and that the three defendants do not expect the case to go further.

Much at Stake

Stake has been very profitable and is conservatively valued at $1 billion, the court filing said. The crypto casino’s users can bet using Bitcoin, Dogecoin and Litecoin transactions as well as other digital assets.

Craven, at 27, is one of Australia’s youngest billionaires. He owns one of the country’s most expensive properties, a mansion in the plush Melbourne suburb of Toorak.

US-born Tehrani and Australian Craven told the weekend magazine of The Australian how they met as youngsters through online gaming. Like many gamers in the mid-2000s, they spent hours every week in the online role-playing game RuneScape.

RuneScape is often credited as a kind of a crucible for web3 talent. Tehrani and Craven told The Australian how they not only sold the game’s in-game currency for real money, but also operated a kind of casino within the game’s world.

In 2011, the game’s developers banned them, but not before they had both made about $100,000 each, which Craven told the magazine was enough to help his parents buy a coffee shop business. The experience also taught the duo the skills needed to build and launch the gambling website Primedice in 2013, according to the article.

In his complaint, Freeman told a different story. Freeman said he and Tehrani met as kids, as they grew up in Connecticut and went to the same schools.

He also claimed that Primedice was his brainchild. As a freshman in college, he had wanted to develop something that could rival Satoshi Dice, a simple Bitcoin-based game and he suggested to Tehrani around 2011 that they partner on the project. Tehrani agreed and then brought on Craven as a third partner without consulting Freeman. This was typical of the kind of bullying he’d taken from Tehrani since they were kids, Freeman said in the court filing.

Freeman alleged that Craven and Tehrani worked together to minimise his share in Primedice and then later to cut him off from its profits. The former business partner said that they had muscled him out despite him having contributed more work and expertise than Craven, who Freeman claimed lacked the technical skills to code the site.

However, Freeman didn’t stop there. He also claimed that Stake.com too was his idea first and that it partially leveraged his intellectual property. He accused the other two of lying to him to ensure he was never part of the business. Stake.com also includes a game that directly competes with Primedice, the complaint added.

Craven told DL News that while Freeman “had a degree of involvement in Primedice,” he rejected the notion that Freeman had any involvement in Stake.

“Stake was founded by myself and Bijan Tehrani in 2017 to provide players with the best possible online experience,” Craven continued.

As of 2023, Stake.com features a range of virtual slot-machines, as well as live games like blackjack and poker. Players “bank” – make deposits and withdrawals – in cryptocurrency. Stake launched a site in the UK in 2021, though the UK version accepts only fiat transactions.

Broader allegations

Stake is a domain through which players bet with crypto, but it’s also an intentionally opaque network without any real organisational structure, a set of people, companies and relationships “gathered to enable illegal gambling”, according to the complaint.

Stake’s gambling licence is issued to an entity in Curacao and the company has associated entities in Serbia, Cyprus, Australia and the Isle of Wight.

A major aspect of Stake’s marketing is its splashy celebrity and athlete sponsorships, particularly footballers – including Argentine legend Sergio Augero and English Premier League club Everton FC – and Ultimate Fighting Championship fighters.

Celebrity associations with crypto have come under fire since the collapse of exchange FTX. This does not appear to have slowed down Stake: in January, the crypto casino signed a deal with Alfa Romeo’s F1 team that could see its cars sporting Stake livery.

But Stake’s highest-profile celebrity endorser is probably Canadian rapper Aubrey Drake Graham, better known as Drake.

Drake regularly livestreams his gambling on Stake. An article in the gaming trade press reported that he had bet north of $1 billion in the first six months of his relationship with the casino.

Freeman’s complaint named the artist as a person of interest. This is a term that has no legal meaning, but it does mean, Australian media reported, that the musician could be called as a witness should the case go to trial.

The “Hotline Bling” singer appears to be named in the complaint as his partnership is one example of how Stake’s marketing has allegedly edged into questionable legal territory, such as targeting people in the US.

Craven told DL News that “Stake prides itself on maintaining the highest standards of compliance and on keeping its community safe. We are constantly innovating, testing and challenging ourselves to ensure that your know-your-customer and anti-money laundering checks, as well as safeguards against illegal or problem gambling, remain the best in the industry.”

The defendants have until February 9 to respond to Freeman’s complaint. Freeman’s counsel declined to comment to DL News.