The two founders of Stake.com have managed to avoid a $580 million claim against their business by a former business partner after a US court threw out the claim for a lack of jurisdiction.
Last year, the former business partner to Bijan Tehrani and Edward Craven – Christopher Freeman – launched court action in the Southern District of New York claiming he had been shut out of the business and had been misled by the Australian-based entrepreneurs.
An investigation by this masthead in 2021 revealed that Craven and Tehrani were the founders of the wildly popular online cryptocurrency casino Stake.com, and that the group was operated out of Australia despite being registered in the Caribbean island Curacao.
The Stake.com parties had asked for the case to be thrown out because it failed to properly state a claim against them and did not have proper jurisdiction given the business, Stake.com, was not operated out of the US.
Freeman had alleged he was a key member of the precursor to Stake.com, a casino website known as Primedice. Stake.com has no affiliation with the Australian share trading platform Stake.
US District Judge Ronnie Abrams dismissed the case for jurisdictional reasons, but granted leave to Freeman to amend his claim and refile it in the next 30 days. There may also be opportunity for Freeman to file a lawsuit in Australia. Freeman has been contacted for comment.
In dismissing the case, Abrams compared the claim by Freeman to the argument among Facebook’s original owners as depicted in The Social Network.
“Freeman’s complaint – which reads not unlike The Social Network’s account of the creation of Facebook – alleges that Craven and Tehrani stole his idea for developing an expansive online cryptocurrency-based casino, subsequently launched Stake.com, an online cryptocurrency casino now worth more than a billion dollars, and, through a series of corporate transfers, left him without any real partnership stake in the original Primedice venture,” Abrams said.
“Although the complaint’s factual allegations related to the purported theft of Freeman’s work in the launch of Stake.com are themselves detailed, its allegations as to the court’s subject matter jurisdiction are lacking in critical respects.
“Because Freeman is unable to establish complete diversity between the parties, the court lacks subject matter jurisdiction.”
Abrams said that for diversity jurisdiction to exist, there must be “complete diversity” of citizenship between the plaintiff and the defendants, and the amount in controversy must exceed $US75,000 ($112,000).
The Australian Financial Review’s “Rich List” estimated Craven’s wealth to be in excess of $1 billion. It excluded Tehrani from the list as he was, at the time, not an Australian citizen. Stake.com counts superstar Drake as its lead ambassador and is also the lead jersey sponsor of Everton Football Club in the UK.
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