Caesars Riverboat Casino v. Kephart
In October 2010, the Indiana Supreme Court ruled against a woman who said an area casino preyed on her gambling addiction. Jenny Kephart filed a lawsuit against Caesars Indiana in 2007 after the casino sued her to recover $125,000 that she lost in a single night of gambling in the year before. The casino is now Horseshoe Southern Indiana.
Kephart said the casino enticed her to gamble with free meals and rooms as well as money on credit. The casino even sent a car to drive her from her home in Tennessee to the Indiana casino. Below are the legal briefs from Caesars Riverboat Casino v. Kephart.
Caesars Riverboat Casino v. Kephart - Appellant Brief
Caesars Riverboat Casino v. Kephart - Brief of Apellee
Caesars Riverboat Casino v. Kephart - Appellee's Petition to Transfer
Caesars Riverboat Casino v. Kephart - Appellee's Petition for Rehearing
Caesars Riverboat Casino v. Kephart - Appellee's Petition to Transfer Reply Brief
Caesars Riverboat Casino v. Kephart - Appellant's Brief of Response to Petition to Transfer
Caesars Riverboat Casino v. Kephart - Reply Brief of Appellant
Hoffman v. Sandia Resort & Casino, NM
On October 6, 2010, the U.S. Supreme Court declined to review the New Mexico Court of Appeals decision in Hoffman v. Sandia Resort & Casino. The case involves a New Mexico man who reportedly won $1.6 million dollars at one of the casino's slot machines. However, the Sandia Pueblo tribe, which owns the casino, informed Hoffman that the payout would not be made because the slot machine had malfunctioned. Arguing before courts in New Mexico, the tribe claimed Hoffman had no legal recourse because of the tribe's sovereign immunity. Courts in New Mexico supported the tribe's position and concluded that tribal immunity can only be waived “for purposes of providing a remedy to casino patrons who suffer physical injury to their persons or property." These decisions seem to suggest that there is no legal remedy for casino patrons who have suffered financial injury because of wrongdoing at tribal casinos.
Please read the opinion of the New Mexico Court of Appeals below.
Hoffman vs. Sandia Resort and Casino
Piercey Estate v. Atlantic Lotto Corporation
In the 2008 Canadian Supreme Court Case, Piercey Estate v. Atlantic Lotto Corporation, Inc.
, the plaintiffs argued that video lottery terminals (VLT’s, or video slot machines) are designed to be “inherently deceptive, inherently addictive, and inherently dangerous, when used as intended, without any information or warning.” The plaintiffs’ daughter in this case, Susan Piercey, “lost her life due to the deceptions designed into VLT games, which led to addiction and suicide.” They made the case that the Atlantic Lotto Corporation (ALC) violated the Trade Practices Act, which had originally been put in place to protect consumers from unfair trade practices. The plaintiffs went on to say that “in modern government, government through agencies and corporations are interfering more and more with the consumer and, as such, it makes sense to have the governments responsible for their own actions or actions of its agents.” The justice presiding over this case, however, determined that because the ALC is an agent of the Canadian government, they are not bound by the restrictions of the Trade Practices Act.
Below is the decision of the case and a press release from the attorneys representing the Piercey estate.
Piercey Estate v. Atlantic Lotto Corporation
Press Release - Piercey Estate v. Atlantic Lotto Corporation
Tobacco-Style Lawsuits Against the Predatory Gambling Trade
Professor John Kindt explores the idea of states bringing lawsuits against predatory gambling operators, a strategy that worked over time with the tobacco companies. Kindt writes: "Owing to costs created by new addicted gamblers, bankruptcies, and crime once gambling is legalized, some have argued that gambling establishments should be held liable for the costs they place on society."
The Costs of Addicted Gamblers - Should the States Initiate Mega-Lawsuits Similar to the Tobacco Cases?
Exposing the Truth About the Predatory Gambling Business Through the Judicial System
Professor John Kindt suggests that subpoenaing predatory gambling operators could reveal the truth behind the business, since "the historical record indicates that decriminalized organized gambling activities invariably lead to new addicted gamblers, new bankruptcies, and new crime and corruption."
Subpoenaing Information from the Gambling Industry
A Look at Lawsuits Against the Predatory Gambling Business
In this 2004 Mercer Law Review
article, Professor John Kindt details the extraordinary methods of predatory gambling operators (and their allies) to hide harmful, and potentially illegal, business practices. Kindt states that "insiders" from the industry need to come forward so the public can truly understand what goes on.
"The Insiders" for Gambling Lawsuits
Dissenting judge asserts casino “duty of care”
“It seems clear that both the casinos and the State of Indiana share a common interest in gamblers – pathological or otherwise—losing as much money as quickly as possible. One wonders if Indiana’s legislators—and more importantly, their constituents—have any qualms about balancing the State’s budget on the backs of gamblers, especially those who are least able to resist and/or afford gambling. I would conclude that public policy favors imposing a common law duty on Caesars in this case.” Wrote Judge Crone of Indiana.
The casino does have a duty to its customer, a known pathological gambler, Crone argued. “To hold otherwise would be to conclude that there is no level below which a casino (and thus the State of Indiana) may not go in enticing patrons and encouraging their reckless behavior. I believe that Hoosiers would expect more from their government and the businesses that operate here.”
Casino marketing models generally include evaluating how much each customer has available to lose. With that in hand, they develop corresponding enticements such as free rooms, food, and copious amounts of alcohol, to encourage “valuable” customers to lose everything they have, and then some. So far, the industry has evaded the legal issue of “duty of care.” This legal concept allows us to seek damages from others who harm us when a reasonable and prudent person should know the harm they are causing. Clearly, enticing gambling addicts and seeking to extract all of a person’s resources from them should violate the duty of care. However, casinos have and will continue to expend extraordinary resources to prevent anyone from collecting damages and setting a legal precedent that gambling business has any such duty. When government becomes a partner with gambling, it fails to protect its citizens from harm, and, as this judge’s opinion, encourage harm.
Indiana Court of Appeals, Judge Crone, dissenting.
Caesars Riverboat Casino Vs. Genevieve M. Gephart
Indiana Judge Crone dissent
Duty of care from the casino side
Though written from a gambling industry bias, Kelly and Igelman (2009) examine some of the intriguing cases involving “duty of care.” Perhaps with the exception of undisclosed out-of-court settlements, casinos and other gambling businesses have largely avoided the setting of legal precedents that could be used in lawsuits by people whose lives have been ruined by gambling’s products. Their article explores “self-exclusion,” contending the entire weight of responsibility for enforcing such exclusions belongs with the gambler and little or none with the provider of gambling products. In many cases, gamblers who have excluded themselves continue to receive enticements from casinos. When those gamblers “relapse,” the gambling businesses continue to take their money, but if the excluded gambler wins large, the casinos refuse to pay, based on the exclusion agreement. (Author Joseph M Kelly is co-editor of the Gambling Law Review and Economics
journal that published the article. The other co-editor is I. Nelson Rose, perhaps the nation’s leading legal advocate for gambling interests. Kelly is the former consultant to Antigua, an advocate for Internet gambling. The review’s co-author, Alex Igelman, is an attorney whose LinkedIn profile notes he is special consultant to the Stonarch Group, one of America’s largest horse racing operations, and one expanding into other gambling interests.)
Kelly and Igelman Casinos and the Duty of Care
Poulos v. Caesars World: A Battle over Corrupt Business Practices
This article details the court case Poulos v. Caesars World, where Caesars World, a casino corporation, was sued for "a course of fraudulent and misleading acts and omissions intended to induce people to play their video poker and electronic slot machines based on a false belief concerning how those machines actually operate, as well as the extent to which there is actually an opportunity to win on any given play". This legal battle of the business practices of Caesars World casinos shows the extent to which players can be swindled into losing large sums of money on games that are deigned for them to lose.
Poulos v. Caesars World, Inc.
KY Supreme Court rules in Instant Racing case
In a unanimous opinion, the Kentucky Supreme Court ruled Thursday that the Kentucky Horse Racing Commission has the legal authority to regulate wagers on previously run horse races presented on electronic gambling machines, called "instant racing machines" — but that the legality of the wagers themselves has yet to be established. These machines are similar to slots in a regular casino, but are often found at race tracks. The court said the case must go back to Franklin Circuit Court, where it originated, to determine whether this is a legal form of gambling. Below is a copy of the majority opinion in the case.
KY Opinion Affirming and Reversing Instant Racing Machines
In addition, below is a copy of the oral arguments in the case. Both pieces are great to read if you want to learn more about Instant Racing Machines.
KY Instant Racing Machine Oral Argument