It doesn't mean much to me. 'Stakes' are either sticks or posts, bets or wagers and a few other similar descriptions.
I'm hazarding a guess that since the word 'challenge' is used, 'stakes' is being used with its bet or wager meaning. But in that case it's a rather clumsy structure. It would make more sense as, "With the stakes laid (or made) ....etc.
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