Legal News

Gambling Addiction Case Comes out Trumps for Casino

By Matthew Heller, Editor

In a decision that a dissenting justice called ?particularly disturbing,? the Indiana Supreme Court has ruled that a compulsive gambler cannot sue a casino for enticing her to gamble when it knew of her addiction.

The ruling in Jenny Kephart's case was part of a double jackpot for the gaming industry as the Supreme Court also decided Sept. 30 that a Rising Sun, Ind., casino could exclude a blackjack player from its premises for counting cards.

Kephart, of Goodlettsville, Tenn., lost $125,000 in a single night of gambling in March 2006, using six counter checks provided to her by Caesars Riverboat Casino in Elizabeth, Ind. In seeking damages for emotional and other injuries, she alleged the casino had a common-law duty to protect her from herself.

But a 4-1 majority of the Supreme Court said the Legislature had ?abrogated the common law? by requiring the Indiana Gaming Commission to enact a program under which a gambler may ?make a request to have his or her name placed on a voluntary exclusion list? from casinos. Kephart had not asked to be put on the list.

?The existence of the voluntary exclusion program suggests the legislature intended pathological gamblers to take personal responsibility to prevent and protect themselves against compulsive gambling,? Justice Robert D. Rucker wrote for the majority, and

Kephart?s claim directly conflicts with the legislature?s choice. To allow Kephart?s claim to go forward under the common law would shift primary responsibility from the gambler to casino.

In a dissent, Justice Brent E. Dickson found ?the result in this case is particularly disturbing. The Court today holds that a gambling casino may with impunity entice a person the casino knows to be a pathological gambler by offering free transportation from Tennessee to the Indiana casino, providing her with a free hotel room, food, and alcohol, and then extending her credit to gamble at the casino where she not surprisingly suffers $125,000 in casino gambling losses.?

Compulsive gamblers have generally not fared well with claims against casinos. In 2008, for example, a New Jersey judge dismissed the case of an attorney who lost nearly $1 million at casinos in Atlantic City and Las Vegas.

Caesars originally sued Kephart in January 2007 for payment of the counter checks it had provided to her. She filed a counterclaim alleging the casino knew of her pathological addiction to gambling and took advantage of her condition to enrich itself.

The case was one of first impression in Indiana. A Harrison Circuit Court judge denied Caesars' motion to dismiss her counterclaim but the Indiana Court of Appeals reversed in a 2-1 decision, finding ?[t]here is no common law duty obligating a casino operator to refrain from attempting to entice or contact gamblers that it knows or should know are compulsive gamblers.?

The Supreme Court majority took a different approach. Even assuming casino owners have such a duty, it said, ?we are of the view that the Legislature has abrogated the common law.?

But the opinion ignored the legal principle that ?statutes in derogation of the common law are to be construed narrowly.? ?Nowhere in Indiana's statutory system of gambling regulation,? Dickson said in his dissent, ?is there any provision that expressly or unmistakably abrogates Indiana's common law requiring business operators to exercise reasonable care for the safety of their customers and subjecting them to accountability in damages for failing to do so.?

In the card counting case, moreover, another 4-1 majority found abrogation did not apply to the ?long-standing common law right of private property owners? to exclude a visitor or customer. The gaming commission's rules, Justice Frank Sullivan wrote, ?at the very least do not evince an express intent by the Commission to alter common law exclusion rights.? Donovan v. Grand Victoria Casino.

Justice Dickson, again the dissenter, pointed out the inconsistency:

The Court in Kephart finds that Indiana's statutory scheme of riverboat gambling regulation and the plaintiff's common law claim in that case are ?so incompatible that they cannot both occupy the same space.? If this is so, the same principle should be applied here.

By Matthew Heller
On Point

Full post as published by On Point News on October 03, 2010 (boomark / email).