Stake UK, the crypto gaming company that sponsors Everton FC, has been hit with a $400m (£346m) lawsuit from a former business partner of its co- founders, alleging they robbed and bullied him out of the business.
According to court documents obtained by the Guardian, Florida resident Christopher Freeman claims he was the mastermind of Primedice, a predecessor company to Stake, which is now valued at more than $1 billion.
Freeman claims he created Primedice with school friend Bijan Tehrani and Ed Craven, who now run Stake.
The company has gone from complete obscurity to one of the fastest growing gaming brands in a few years, benefiting from a partnership with rapper Drake and sponsorship deals with the Ultimate Fighting Championship (UFC) and F1 driver Pietro Fittipaldi.
It also sponsors Watford FC and is one of a glut of gaming companies, many of which do not have a UK presence, that sponsor English and Scottish football.
According to Freeman’s account, which the company strenuously denies, the trio built the company together, but Tehrani and Craven gradually ousted him, using intimidation and illegal tactics.
The main bone of contention concerns the origin of Stake. Freeman says it was his idea to expand Primedice into a more comprehensive crypto-casino.
Tehrani and Craven, he said, claimed to be more interested in starting a traditional online casino, using “fiat” currency. Ultimately, Craven and Tehrani built a crypto casino, which became Stake.
Freeman alleges that the company was built using his ideas, along with Primedice funds that were rightfully his. He’s asking for a full audit of Stake’s assets to see what’s owed to him, which he says could be over $400 million.
A spokesperson for Stake said its claims were “internally inconsistent, intentionally misleading and patently untrue”.
“This file is a desperate attempt to spread false information and extort money that Freeman has no right to,” they added.
“The company has no intention of giving in to this kind of blackmail and is confident that these totally frivolous allegations will be thrown out of court in due course.”
Freeman also alleges that Stake not only knows about, but encourages, the use of virtual private networks (VPNs) by customers who wish to play with Stake but cannot legally do so.
VPNs create a fake location for a computer, allowing users to gamble with crypto in countries where it is not legal to do so. Freeman’s statement refers to the United States. Crypto gambling is also illegal in the UK.
Stake has denied accepting money from bettors circumventing the law with a VPN, saying it “complies with all applicable laws”.
“As with all companies in the industry, Stake encounters unauthorized users attempting to evade geo-blocking through the use of VPNs,” he said.
“The company has strict compliance processes in place beyond simple geo-blocking, including KYC [know your customer] and other anti-money laundering measures.
“For example, customers attempting to use VPNs to evade geoblocks would be prevented from depositing funds in accordance with KYC requirements.”
He also highlighted responsible gambling measures, such as offering customers free blocking software for people who want to stop gambling.
Last month, The Guardian reported that Everton FC had told Stake to stop using the club’s brand in a promotion offering a $10 free bet to anyone who bet $5,000 in a month.
More than 30,000 Everton fans had earlier signed a petition urging the club to end its partnership with the gambling company.