Stakeholder (law)

A stakeholder in law, notably gambling law, is a third party who temporarily holds money or property while its owner is still being determined.

For example, two people may bet on the outcome of a future event. They ask a third, disinterested, neutral person – the stakeholder – to hold the money ("stakes") they have wagered ("staked"). After the event occurs, the stakeholder distributes the stakes to one or both of the original (or other) parties according to the outcome of the event and according to the previously decided conditions. Courts sometimes act as stakeholders, holding property while litigation between the possible owners resolves the issue in which one is entitled to the property. Trustees also often act as stakeholders, holding property until beneficiaries come of age, for example. An "escrow agent" is one kind of trustee who is a stakeholder, usually in a situation where part of the purchase price of property is being held until some condition is satisfied. In legal documents, the escrow agent is often referred to as a "mere stakeholder."

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