Compulsive gambling litigation: casinos and the duty of care

Volume 13, Number 5, 2009
Mary Ann Liebert, Inc.
DOI: 10.1089/glre.2009.13503

CASINOS THROUGHOUT the world have been sued other countries following suit. In the past decade,
for negligence because they breached an al- there has been litigation by self-excluded compul- leged duty of care to patrons. One major duty of sive gamblers in common law jurisdictions such as care issue is self-exclusion of gamblers. Australia, Ontario, the U.S., Great Britain, and Australia as Canada, the U.S., and other countries have required well as code jurisdictions such as Austria, France, or encouraged casinos and other gaming entities to Germany, and Korea. Generally the plaintiffs allege develop procedures to allow gamblers to self-ex- that the casino was negligent in breaching its duty clude themselves mostly because they believe they of care to the self-excluded gambler and that the have a gambling problem. Self-excluded patrons form, which generally releases a casino from liabil- who return to casinos and lose money have often ity through a limitation of liability clause, is unen- sued casinos for breach of duty of care and other forceable because it is against public policy. Some jurisdictions by statute will deny relief to a self-ex- Self-exclusion of gamblers was first instituted in cluded gambler who manages to enter the casino and Manitoba, but the concept became commonplace af- ter Missouri established self-exclusion policies in There have been numerous academic studies that 1996. The Missouri regulatory authorities had con- discuss the purpose and effectiveness of a self-ex- sidered allowing self-excluded gamblers to sue a clusion policy. Most have concluded that the bur- casino if it breached a duty of care by not prevent- den of self-exclusion should be on the gambler alone ing a self-excluded patron from entering a casino.
and that any attempt to shift even part of the bur- They decided against such a policy because of the den to the casino would be unproductive.
overwhelming testimony from gambling treatment This would be the opinion of Carol O’Hare, “Self- professionals that permitting litigation would allow Exclusion—Concept vs. Reality”;1 the National the self-excluded gambler to shift responsibility Council on Problem Gambling, Task Force on Self Exclusion (October 2003); Alex Blaszczynski, The notion of self-exclusion and responsible Robert Ladouceur, and Lia Nower, “Self-exclusion: gambling procedures are now relatively common A Proposed Gateway to Treatment Model”;2 and and widespread and continue to grow with the in- Jamie Cameron, “Problem Gamblers and the Duty troduction of new venues and forms of gambling.
of Care: A Response to Sasso and Kalajdzic.”3 Most, if not all, Canadian jurisdictions have some Other authorities, especially lawyers, often dis- form of responsible gambling measure in place, with agree with the opinion of these problem gamblingprofessionals and believe there should be liability ifthe casino is negligent in failing to self-exclude, e.g.,William V. Sasso and Jasminka Kalajdzic, “Do On- Joseph Kelly, Ph.D., J.D., is professor of business law at Alex Igelman is a Toronto lawyer who practices gaming and The authors wish to thank Prof. Jeff Derevensky of McGill 7(1) INTERNATIONAL GAMBLING STUDIES 59–71, (April 2007).
University for assistance on the article.
11(5) GAMING L. REV. 554–571 (2007).
tario and its Gaming Venues Owe a Duty of Care self-exclude without any proof or measure of to Problem Gamblers?”4 Phillip M. Osanic, “An Ex- his true commitment to change. This creates a amination of the Potential for Finding Government risk for potential abuse of these programs by Liability in the Context of Compulsive Gambling,”5 individuals who are in total denial and see the and Andy A. Rhea, “Voluntary Self Exclusion Lists: casino as the source of their problem rather than How They Work and Potential Problems.”6 taking responsibility for their own actions.
What is often overlooked is that it was compul- Imagine the reinforcement of that denial if the sive gambling experts who strongly rejected allow- self-excluded gambler successfully enters the ing self-excluded gamblers to sue casinos. Missouri, casino, gambles and loses, then received a mon- in 1996, was the first U.S. jurisdiction to adopt self- etary award as the result of a lawsuit in which exclusion. Interestingly, when the idea of self-ex- he blames the casino for not keeping him out.
clusion from excursion gambling boats was first To my knowledge pathological gambling is not considered in Missouri, it was the problem gambling studied much in law school, so it’s not surpris- treatment community who feared self-exclusion ing that there are attorneys willing to make this programs might exacerbate the problem.
argument on behalf of their client, still igno-rantly believing that money will help the gam- [Problem gambling experts] noted that while our intentions were good, the only way peoplecan truly get better is if they take control and In the National Council on Problem Gambling, take on the responsibility for keeping them- “Discussion Paper On Current Voluntary Exclusion selves out of the casinos. It is wrong to put the Practices.”10 The NCPG recommended, inter alia, responsibility in the casino’s hands becausethen the individual never really takes a step in “jurisdictions should carefully document the acknowledging his problem or trying to fix it.
application process. The following issues And this allows him to ultimately blame the should be addressed in the application forms Typical of the comments received concerning self- (a) The application should verify the appli- exclusion would be that of the Texas Council on cant’s understanding of the program’s Problem and Compulsive Gambling at the time Mis- rules, procedures and limitations. It should souri was developing a policy for litigation by self- also verify the applicant’s responsibilities.
(b) The application should include a waiver and release to verify that the applicant is One counselor perhaps verbalized it best by say- entering into the program voluntarily and ing, “Given the personality of many of male relieving the regulatory body and the par- ego-driven compulsive gamblers, I’m afraid ticipating entities (casinos, race tracks, they would see the ban as a challenge to see if other gambling venues) from liability for they could beat the system.” Officials at Casino enforcing the provisions of the program.
de Montreal, in fact, report that some gamblers do just that. Nearly all of the counselors felt that the casino operator from any liability as- the ban would be of little help unless the gam-bler viewed recovering from the gambling ad-diction as his/her own personal responsibility.8 4 10(6) GAMING L. REV. 552 (2006).
5 6(3) GAMING L. REV. 229 (2002).
According to Carol O’Hare of the Nevada Council 6 9(5) GAMING L. REV. 462, 469 (2005).
7 on Problem Gambling (NCPG), it is essential that Carol O’Hare, Self-Exclusion—Concept vs. Reality, supra note1, quoting Kevin Mullally, then Executive Director of the the burden of self-exclusion be placed on the prob- lem gambler alone. She stated in 2004: 8 Letter, Texas Council on Problem and Compulsive Gambling,June 8, 1996 (on file with author).
9 O’Hare, supra note 1, at 191.
If the appropriate forms are signed and the re- 10 National Council on Problem Gambling, Task Force on Self quired information provided, the gambler can Exclusion (Oct. 2003) at III.
Ladouceur, and Lia Nower analyze various self-ex- program. It should be designed to ensure, clusion issues. They clearly conclude that the bur- to the extent legally possible, that no cause den of exclusion should not be on the gambling op- of action can arise because of the volun- First, problem gamblers must clearly under- The NCPG recommended the following issues stand that the self-exclusion agreement be- should be addressed in any self-exclusion policy.
tween the gambler and gaming operator doesnot constitute a formal contract enforceable by 2. Regulatory bodies should require gaming law . . . Rather, it represents an arrangement operators to check against the self-exclu- wherein a venue voluntarily offers, or is ob- sion list anytime it is practical to do so and when the patron is required to produce pos-itive identification. Examples include Individuals identifying themselves as problem gamblers may approach a gaming operator or delegated staff with a request or application to exclude themselves from future entry into a 3. Regulatory bodies should require self-ex- gaming venue for a determined period of time cluders to report violations of their exclu- sion. This will help to avoid the gamblertrying to deflect blame for their relapse on The individual agrees to be removed from the specified gaming venue by the operator or del- bler will have difficulty laying all the blame egated staff should they be identified as in on others if he was required to report each instance of his self-exclusion violation. Italso allows regulators and gaming opera- The individual agrees to have their names re- tors to alert floor and enforcement person- nel to be on the lookout for the violator.
4. Regulators should require gaming opera- tors to remove self-excluders from all mail- The individual understands that a penalty may be imposed for breaches of the self-exclusion 5. The committee believes that arrest for tres- agreement: this may include assent to confis- passing is an effective deterrent for many cation of winnings (e.g. Illinois, USA), arrest for trespass (e.g. Missouri, USA) or fine (e.g.
6. A consensus of the committee believes that The authors also believe it would be impossible for is should be clear to the self-excluder that it is not the responsibility of the casino orthe regulatory agency to prevent them from Absent a statutory requirement to produce valid identification to gain entry to a venue, itis unrealistic for gamblers to expect the gam- Lia Nower, now Director of the Center for Gam- ing staff, armed with photos, to detect any bling Studies at Rutgers University, has suggested gambler in breach of the self-exclusion agree- that the reporting mandate of paragraph 3 has been ment in a crowd, particularly in jurisdictions one of the reasons why the Missouri self-exclusionpolicy has been most successful. It places the bur-den on the self-excluder to report any relapse to the 12 Interview with Lia Nower, Oct. 24, 2007.
In “Self-exclusion: A Proposed Gateway to Treat- 13 7(1) INT’L GAMBLING STUDIES 59, 63 (April 2007).
where self-excluders number in the thousands.
missed because she failed “to plead the predicate This is particularly impractical given the num- criminal act of mail fraud with particularity.”19 ber and frequency of patrons entering venues, Indiana has been the forum for most duty of care the high turnover of casual staff and the gambling litigation cases, with the casino winning changes in individual appearance over time.15 every case without the matter being resolved by thestate supreme court. In Caesars Riverboat Casino Thus, the consensus of experts in compulsive gam- LLC v. Kephart,20 the compulsive gambler coun- bling is that the burden of exclusion is on the player terclaimed when sued for her gambling debts after alone and there should be no liability to a self-ex- her check bounced. She alleged the casino “took ad- cluded gambler absent extraordinary conditions.
vantage of her pathological gambling condition tounjustly enrich itself.”21 The trial court denied Cae-sars’ motion to dismiss her counterclaim.
The appellate court, in reversing the trial court, EXCLUDED GAMBLERS HAVE
cited two reported Indiana compulsive gambling GENERALLY BEEN UNSUCCESSFUL
cases as authority for allowing dismissal of her IN LITIGATION
counterclaim.22 The court also analogized her claimto that of a compulsive shopper where there was no common law duty to refuse to sell goods.23 Fur- Compulsive gamblers have generally been un- thermore, a casino operator, “does not act in a reck- successful when they sue casinos for negligence in less manner by marketing to individuals it knows to not preventing them from returning to gamble. In be compulsive gamblers,” anymore than a depart- the United States, ordinarily, a compulsive gambler ment store would market to a compulsive shopper.24 will not be able to survive summary proceedings to Caesars also cited Taveras as authority for defer- ring compulsive gambling matters to the “highly A recent New Jersey decision, which refused to let a self-excluded gambler set aside a lifetime ex- A strong dissent rejected the department store analogy and concluded the matter was similar to atavern enticing an alcoholic with free food. Thus, In essence, self-exclusion is designed as a there should be a casino duty, especially when Cae- means to help problem gamblers help them- sars knew it was dealing with a pathological gam- selves; it places responsibility squarely on self- bler and “lured her into its casino with complimen- excluded persons themselves to refrain from tary transportation, lodging, food, and drinks, let her prohibited activities, albeit with the assistance gamble away $125,000 in borrowed funds without investigating her creditworthiness, and then soughtto triple its take by suing her for treble damages plus In 2007, Arelia Taveras sued six New Jersey casi- attorney’s fees.”26 The dissent then made a moral nos for $20 million in a 12-count complaint alleg- ing, inter alia, that they breached their duty of careto her after she had identified herself as a compul-sive gambler. She also alleged that defendants were liable pursuant to a Racketeering Influenced and 16 I/M/O Petition of S.D. for Removal from the Voluntary Self- Corrupt Organizations Act (RICO) violation be- Exclusion List, 399 N.J. Super. 107, 943 A.2d 188, 2008 N.J.
Super. LEXIS 65.
cause they “collaborated with each other to inten- 17 Taveras v. Resorts International Hotel, Inc., et al., Case No.
tionally and maliciously entice and lure” her into 1:07-cv-04555-RMB-JS, Complaint, par. 1, 5, 6 (D.N.J.).
“further gaming activities outside the state of New 18 2008 U.S. Dist. LEXIS 71670 at § 14.
19 Jersey in violation of ‘RICO’ statutes.”17 In Sep- tember 2008, her complaint was dismissed primar- ily because the “extraordinary, pervasive, and in- tensive” state gambling regulations “have notably declined to impose the duty upon her which plain- tiff relies here.”18 Her RICO claims were also dis- KELLY AND IGELMAN
Given the apparent size and steadiness of the Those states that have mandatory self-exclusion revenue stream generated by riverboat casinos, provisions for compulsive gamblers will generally it seems clear that both the casinos and the not permit a self-excluded gambler to sue the gam- State of Indiana share a common interest in ing entity if it negligently allows the gambler en- gamblers—pathological or otherwise—losing trance, and the gambler must sign a waiver of lia- as much money as quickly as possible. One bility, e.g., Illinois, Indiana, Louisiana, Michigan, wonders if Indiana’s legislators—and, more Mississippi, Missouri, New Jersey, and New importantly, their constituents—have any York.32 Most recently, the California Gambling qualms about balancing the State’s budget on Control Commission, on March 10, 2006, concluded the backs of gamblers, especially those who there should be no cause of action by a self-excluded are least able to resist and/or afford gambling.
gambler and “the responsibility for following either I would conclude that public policy favors im- the self-exclusion or self-restriction is on the pa- posing a common law duty on Caesars in this There might, however, be liability for intentional misfeasance. One case in the United States involved Finally, the dissent cited a highly questionable sta- a sports figure, Joe McNeely, a Mississippi resident tistic from a law review article by an anti-gambling who sued four Louisiana casinos in federal court in professor as authority for the dubious assertion that: New Orleans, La.34 His attorney had written to two “It is estimated that ‘27 percent to 55 percent of all of the four casinos informing them that his client casino revenues come from just pathological gam- was a compulsive gambler and asked the casinos neither to contact his client nor let him gamble or On April 15, 2009, plaintiff filed a petition for re- obtain credit. Several casinos continued to send him hearing, alleging the decision would be immunizing complimentary items resulting in the gambler los- a tort and “countenancing the intentional infliction of ing about $2 million after notification to the casino harm to a person with a known malady.” Furthermore, of his compulsive gaming. The case subsequently the petition alleges the appellate court mischaracter- was resolved pursuant to a confidential settlement.
ized casino conduct as “mere ‘marketing.’”29After the One related issue is whether a gambler might be petition was denied, plaintiff petitioned to transfer the able to sue successfully a manufacturer of drugs matter to the Indiana Supreme Court.
where the effect of the drug is to increase compul- Other Indiana decisions have also denied relief to sive gambling. In the U.S. there is litigation by gam- a compulsive gambler suing the casino. In Merrill blers against both the manufacturer of pills and casi- v. Trump Indiana, Inc.,30 the plaintiff claimed thecasino failed to exclude him notwithstanding hisname being on the casino eviction list. In affirmingsummary judgment for the casino, the federal court 27 Id. at § 41–42.
28 Id of appeals stressed that there was no duty of care . at § 38–39; John Warren Kindt, “The Insiders” for Gam- bling Lawsuits: Are the Games “Fair” and Will Casinos and pursuant to either Indiana statutory or common law.
Gambling Facilities be Easy Targets for Blueprints for RICO Moreover, courts have occasionally threatened to and Other Causes of Action?, 55 MERCER LAW REV. 529, 545 assess damages against a plaintiff who has sought (Winter 2004).
29 April 15, 2009, Petition at 1.
recovery for gaming losses. In Williams v. Aztar In- 30 320 F.3d 729 (7th Cir. 2003); accord. Brown v. Argosy Gam- diana Gaming Corp.,31 a compulsive gambler ing co. L.P., 384 F.3d 413 (7th Cir. 2004).
31 sought damages on various causes of action, in- 351 F.3d 294 (7th Cir. 2003); see also Stulajter v. Harrah’s Indiana Corp., 808 N.E. 2d 746 (Ind. Ct. App. 2004).
cluding the Racketeer Influenced and Corrupt Or- 32 Peter Collins, Joseph Kelly, Problem Gambling and Self-Ex- ganizations Act (RICO). The plaintiff had alleged clusion: A Report to the South African Responsible Gambling that the promotional materials sent to him by the Trust, 6(6) GAMING L. REV. 517–531 (2002). See generally casino constituted mail fraud, which was the basis Joseph M. Kelly, Enforcement of Casino Gambling Debts, 71AM JUR. P OF F. (3d) 193–320, §27, discussing lack of capac- of his RICO claim to obtain federal jurisdiction. In ity such as intoxication and compulsive gambling as defenses rejecting his appeal, the court of appeals concluded to enforcement of gambling debt complaints.
33 the RICO claim to obtain federal jurisdiction was Initial Statement of Reasons, CGCC-GCA-2006-R-3, Pro- gram for Responsible Gambling, citing Peter Collins and Joseph so frivolous that his lawyers should “show cause” Kelly, supra note 32, at 519, 530.
as to why they should not be sanctioned.
nos. On Feb. 17, 2006, a retired physician, Max heavy publicity surrounding the publication of Wells, filed a lawsuit35 in federal court against a Mayo Clinic study of Mirapex and Requip SmithKline, the manufacturer of Requip and seven in mid-2005, the Casinos were specifically Nevada casinos including Wynn Las Vegas, LLC; aware of the propensity of such drugs to cre- Las Vegas Sands, LLC; Mandalay Corp.; Treasure ate an irresistible gambling compulsion.37 Island Corp.; Harrah’s Las Vegas, Inc.; Hard RockHotel, Inc.; and Bellagio, LLC.
In his demand for damages the plaintiff sought: 1. Judgment against SmithKline under Count Wells, a Parkinson’s patient, sues SmithKline for failing to give adequate, proper and non- deceptive warnings that Requip, one of itsdrugs used to treat Parkinson’s disease, could 2. Judgment against the Casinos for damages, cause its users to develop an irresistible im- pulse to gamble. SmithKline’s failure to giveproper warnings rendered Requip unreason- ably dangerous when used as intended and as authorized by SmithKline. Defendants’ failureto give proper warnings was the causative nexus of Wells’ developing an irresistible gambling compulsion and thereby losing ap-proximately $12.2 million to the Casinos and certain other casinos and online gambling The complaint’s theft count against the casino con- Each Casino appropriated more than $75,000 of Wells’ property, with an intent to deprivehim of that property, and without his effective consent because he was, at that time, suffering from a mental defect or disease, or intoxica-tion, known to the Casinos, which prevented Plus reasonable and necessary attorneys fees.
him from making reasonable dispositions ofhis property. Texas Penal Code, §§ 31.01, By February 2007, Wells had settled his case against 31.03, 31.09. His property, in the form of cash, Hard Rock and all other casinos had been dismissed was appropriated from Wells from various ac- on jurisdictional grounds. Only SmithKline counts in Texas, given in payment of “mark- remained as a defendant. On Feb. 18, 2009, the ers” mailed to him in Texas from Nevada, so court granted defendant’s motion for summary judgment on plaintiff’s product liability failure to Nevada, elements of the offence of theft un- warn claim because “he cannot prevail on his fail- der the Texas Theft Act occurred within Texas.
ure to warn claims without proving general causa- The theft was also accomplished through the use of gifts, promotional materials, telephonecalls and gifts sent or given to Wells in Texasby the Casinos. The Casinos knew that Wellshad Parkinson’s disease, that he was taking 35 C.A. no. A-0/6-CA-126-LY (W.D. Tex. 2006).
36 medication for his illness, and in some in- stances specifically knew that he was taking 38 Wells v. SmithKline, 2009 U.S. Dist. LEXIS 21251 (W.D.
either Mirapex or Requip. As the result of KELLY AND IGELMAN
A different result was reached in Charbonneau v. permits recovery. I make allowances for an ex- Boehringer Ingelheim and Pfizer.39 In Charbon- traordinary case, without at the present time neau, a Mirapex user prevailed on strict liability in being able to conceive of any such case. . . .
defective design, negligent failure to warn of the The Interest sought to be protected is the risks of pathological gambling, and misrepresenta- avoidance of a risk of loss of money through tion that Mirapex was safe. The jury, on July 30, gambling. That risk, when it came to pass, was 2008, awarded $394,300 in compensatory damages, entirely occasioned by the Appellant’s own $85,000 for loss of consortium, and $7.8 million in conduct. It is not an interest, which, in my punitive damages. The jury concluded his wife was 8 percent negligent and Boehringer and Pfizer wereeach 46 percent negligent. On February 17, 2009, The result might be different had the casino gone the case was resolved and the matter dismissed with beyond negligence and in an extraordinary case ac- tually encouraged a compulsive gambler to continue Plaintiffs have generally not succeeded in ob- taining class action relief against casinos. In Poulos In Foroughi v. Star City Pty Limited,44 a federal v. Caesars World, Inc.,41 the federal court of ap- court on Sept. 27, 2007 rejected the claim of a prob- peals affirmed a district court denial of a class ac- lem gambler after he lost money after self-exclud- tion RICO and fraud allegations. If allowed, the ing himself from Star City. After completing a vol- class “would encompass nearly everyone who had untary self-exclusion procedure on May 18, 2004, played video poker or electronic slot machines he claimed to have entered the casino on 65 occa- within the last 15 years.” The plaintiffs had alleged, sions and lost $612,055. On several occasions, he inter alia, that electronic gaming machines “are op- was detected by casino security and escorted from erated by computer programs which determine, in the casino. The self-excluded form stated in rele- advance, the outcome of each particular play.” They also contend that the casinos have perpetuated falseperceptions through the appearance and labeling of (25) “I undertake that I will, during the period the machines, advertising, promotional efforts, and concealment of information known to them that isnot generally available or understandable to the pub- - consider myself a self excluded person; and lic. The case had an unusual procedural history of“nearly ten years of judicial wrangling spanning - recognize that it is my responsibility and I several judges and an over seventy-page civil undertake not to enter or gamble within the docket . . .”42 Once class action status was denied gaming areas at Star City, being the main gam- it would not be feasible for each individual to file separate lawsuits. Poulos may be relied on by Cana-dian authorities in denying class action status.
- seek and continue to seek the assistance andadvice of a qualified and recognized problemgambling counselor.” In Australia, court decisions clearly supported a The judge clearly recognized the casino difficulty finding that there was no casino duty to exclude a compulsive gambler. Chris Reynolds had sued agaming establishment, the RSL Club, for $57,000 (60) In 2003/2004, approximately 9.03 million because it had not excluded him from the club ashe had requested and for negligently extending credit to him. In affirming dismissal of his appeal, 40 Westlaw: Order Dismissing Case per Stipulation of Dismissal with Prejudice by all Parties.
41 379 F.3d 654 (9th Cir. 2004).
42 Save in an extraordinary case, economic loss 43 Reynolds v. Katoomba RSL All Services Club Ltd. (2001) cepted to be a form of loss for which the law COMPULSIVE GAMBLING LITIGATION AND DUTY OF CARE
patrons entered the casino. In 2004/2005, ap- examination on this topic was to the same ef- proximately 8.72 million patrons were admit- fect as that of Messrs. Clark and Lorraway.
(136) Mr. Lorraway also gave evidence that (61) In 2003/2004, 490 exclusion orders were the hot list is limited to ten persons so as not issued by Star City, of which 186 were vol- to dilute its effectiveness as a tool in the de- untary exclusion orders. In 2004/2005, Star City issued 504 exclusion orders, of which 163were voluntary exclusion orders.
(137) I accept Star City’s evidence of the ad-equacy of these measures. However, it is nec- (62) In 2004/0025, Star City had in place ap- essary to mention one caveat. This is, that as proximately 4,000 current exclusion orders, of Mr. Lorraway observed in his evidence, the which over 1,000 were voluntary exclusion or- Casino Control Authority in its 2003 report un- der s. 31 of the Casino Control Act was criti-cal of limitations of a system that relies on hu- The judge, citing dicta in Preston v. Star City, (1999, man beings to detect excluded persons.
NSWS 1273) concluded that there was nothing inthe Casino Control Act that suggested “a private In an excellent analysis of Foroughi, Harry Ash- right of action additional to the obligations imposed ton,45 an Australian lawyer, states the case is espe- cially important since it was heard in federal court Even if there were a private action, there would because of the allegation alleging a violation of the Trade Practices Act. As a result of Foroughi, It will not be enough for plaintiffs to merely (101) These requirements are, first, knowledge rely on their self exclusion to establish a duty that a particular person is in the casino, and, to prevent entry to a casino. Indeed it is clear second, knowledge that the person is the sub- that the responsibility falls almost exclusively upon the shoulders of a person who self ex-cludes rather than the casino to prevent them- Furthermore, Foroughi adopted the Reynolds rea- soning that no duty of care was owed by a casinoto a problem gambler. Even assuming a duty, there The result might be different if the casino acted in- would be no breach of any duty of care.
tentionally or recklessly. In Preston v. Star City,46a New South Wales Supreme Court distinguished (133) The gravamen of Mr. Foroughi’s attack Reynolds and refused to dismiss an action by a com- on the adequacy of the systems was that Star pulsive gambler against the casino largely because: City should have put in place a card entry orfacial recognition system or a longer hot list In Reynolds the plaintiff’s addiction to gam- [person of interest placed on a board].
bling was known but nothing was done to as-sist him despite his requests. The allegations (134) The effect of Star City’s evidence was in para 9 go beyond that. Para 9 asserts not that facial recognition technology is not suffi- only knowledge of the weakness, but active ciently accurate or suitable for use in casinos.
encouragement and exploitation of it. That is This evidence is found in the affidavits of Mr.
a consideration absent from Reynolds.
Clark and Mr. Lorraway. Evidence of Ms.
Russell is to the same effect.
(135) The evidence of Mr. Clark and Mr. Lor- 45 Harry Ashton, Australian Compulsive Gambler Fails in Bid raway on the issue of personal identification to Sue Casino–Legal Status Settled?, GAMBLINGCOMPLIANCE.
COM, Oct. 5, 2007, at 4.
measures is that they are unsuitable for use in 46 Preston v. Star City PTY Ltd. (N03), NSWSC 1223 (2005) casinos. Mr. Mackay’s evidence under cross- KELLY AND IGELMAN
The Preston court stressed the casinos supplied Pre- ing the problem of compulsive gambling by Sep- ston with alcohol when the casino knew Preston was In Calvert v. William Hill Credit Ltd., a British Besides Preston, one other case where the plain- court had to decide whether to award a problem tiff has survived summary pleadings is Kakavas v. gambler over £2 million in losses after he had ex- Crown Casino. In Kakavas v. Crown Casino Lim- cluded himself from William Hill. The court, in a ited, the plaintiff, a pathological gambler sought $30 million plus in damages from Crown Casino. Heclaimed, inter alia, that Crown Casino tried to lure 1. This case raises, for the first time in an En- him back by encouraging the plaintiff to get a let- glish court, the question of whether there ter from a psychiatrist that would allow him to re- sume gambling, by giving the plaintiff bags with maker an incur liability in negligence in re- cash containing $30,000 to $50,000, by switching spect of the gambling losses of a customer his drinks from non-alcoholic to alcoholic, and by other “unconscionable conduct.” The court, after stressing there was no common law duty of care, specifically, the question is whether a book- concluded that “these allegations of active and de- maker who has, at the customer’s request, liberate intervention by the casino operator in the knowledge of, and for the exploitation of, the pa- gambling for a specified period, owes the tron’s vulnerability should be allowed to go to trial, customer a duty to take reasonable care to albeit not as claims in negligence.”48 Thus all claims enforce that prohibition, so as to protect the were struck except for the unconscionable count.
problem gambler from the risk of gambling In March 2008, Crown Casino admitted in docu- ments submitted to the court that it gave Kakavas Both sides produced expert psychiatric witnesses as hundreds of thousands of dollars in bags and boxes to the distinction between a problem and a patholog- to spend on baccarat. On March 13, 2008, the former ical gambler. The court also examined in detail the chief officer of Crown had to file his own defense Australian cases of Preston v. Star City, Reynolds v. when Kakavas charged him as being responsible for Katoomba RSL All Services Club Ltd., Foroughi v. luring him back to Crown. In further discovery, Star City, and Kakavas v. Crown Ltd. The court then Crown officials were asked to submit sworn answers concluded, giving detailed reasons, that William Hill whether they were aware “Kakavas was banned and was not liable, notwithstanding this breach of duty if so when they became aware of this.”49 Apparently, and its failure to properly exclude the plaintiff from Crown was fined AUS$115,000 for violating gam- gambling and that Calvert’s losses would not have bling regulations for giving Kakavas chips three times been sustained “but for their negligence.” without payment. The trial ended in August 2009.
The trial judge concluded “it would fly in the face The judge has indicated he will make a decision by of common sense and be a travesty of justice” if Christmas 2009. Kakavas was also being sued in Aus-tralia for $1.4 million by Atlanta Paradise, a Ba-hamian casino. His lawyers have argued that the Ba- 47 Id. at ¶ 16 (e)(d). The case has settled out of court.
hamian gaming casino knew of his gambling 48 Kakavas v. Crown Limited & Anor [2007] VSC 526 (13 addiction and that Bahamian gaming debts are unen- Dec. 2007). Gambling Addict Lured, Court Told; Crown Ad- mits to Offering Free Money and Private Jet, THE AGE (Mel-bourne, Australia), Sept. 26, 2007. On Sept. 25, 2007, Crown’slawyer attempted to have the case dismissed on grounds the casino has no duty of care. “To use the words of Spiegelman. . . Kakavis and Preston will be hoping that their case will be Great Britain
the ‘extraordinary case’ where a duty will be recognized.” HarryAshton Casino’s Duty of Care to Problem Gamblers: An Aus- British gaming law has been completely over- tralian Case Study. GAMBLINGCOMPLIANCE.COM, June 29, 2007.
hauled by the Gambling Act of 2005. Even before 49 Crown Gets OK to Look at Gambler’s Finances, THE AGE the enactment of the 2005 Act, the government reg- (Melbourne, Australia), Mar. 25, 2009.
50 Casino Chasing Chronic Gambler for $1.4 Million, HERALD ulatory authorities made it clear that licensed gam- ing entities would have to take measures concern- 51 [2008] EWHC 454 (Ch), [2008] All ER (D) 170.
Calvert could sue successfully since he could “prob- € 499,729 when the court concluded Casi- ably have ruined himself anyway by betting with nos Austria was liable for ‘“gross malfeasance and one or more of that bookmaker’s competitors.” Even negligent behavior’ by not doing enough research if the court did award damages, there would be a into their client’s financial resources, and for fail- “very large” reduction because of Calvert’s negli- ing to restrict the actions of a person who had all gence. The appellate court affirmed the trial court the signs of a compulsive gambler. Both [the trial decision largely “because the scope of William and appellate] courts upheld Mr. Hainz’s claim that Hill’s duty of care did not extend to prevent him casinos and betting houses had an obligation to from gambling, and because the quantification of check the financial situations of regular players and his loss cannot ignore other gambling losses which to refuse them entry if there was any suspicion sur- Mr. Calvert would probably have sustained but for their breach of duty. The law not only prescribes the In Germany, the Federal Court of Justice in No- appropriate causal connection, but also the scope of vember 2007 ruled that German casinos must mon- the duty and the scope of the loss which the causal itor slot machines to ensure that self-excluded gam- blers are prevented access. The Federal Court of The appeals court also refused to allow Calvert Justice had ruled in December 2005 that self-ex- to amend his claim to include breach of fiduciary cluded agreements mandated that casinos utilize duty and also opined it would have only reduced “reasonable efforts” to exclude the self-excluded contributory damages by 30 percent had they al- who could seek damages after the December 2005 decision. In the opinion of experts, the November Perhaps if plaintiff alleged breach of the statutory 2007 decision mandated that casinos develop iden- duties imposed under the 2005 Gambling Act and the Gambling Commission’s license conditions and France mandates that self-excluded gamblers be code of practice, plaintiff might have shown breach placed on “national databases of gambling addicts of statutory duty. Causation, however, might still who have volunteered to be registered on banned have been a problem since plaintiff could have uti- persons lists, (since) regulation prohibits casinos to lized numerous other bookmakers. An ingenious keep videos for longer than a month.”58 A French plaintiff could have alleged that all other bookmak- compulsive gambler sued a casino in 2005, but the ers would have been assiduous in complying with case was dismissed because he failed to self-exclude their statutory obligations, and William Hill might have difficulty in refuting that claim.53 Europe and Asia code countries
52 Calvert v. William Hill Credit Ltd., [2008] EWCA Civ. 1427, Netherland casinos have utilized extreme proce- [2008] All ER (D) 155 (Dec.) ¶ 48.
53 dures to identify members who are compulsive gam- I am indebted to Tony Coles, Esq., for this observation.
54 The Big Bluff, GLOBE-MAIL, Apr. 18, 2009.
55 Gambling addict wins a fortune in court ruling againstcasino; compulsive player is compensated by Austrian opera- There, patrons must show their identification tor that failed to help him kick the habit, SUNDAY TELEGRAPH(London), Feb. 22, 2004.
before entering a casino. If the computer re- 56 Austria—A Regulatory Report, GAMBLINGCOMPLIANCE.COM, veals a significant increase in visits or that a person has had 20 visits a month over the past 57 German Casinos Contractually Obliged to Identify All Pa-trons, Says Court, GAMBLINGCOMPLIANCE.COM, November 26, three months, the gambler is approached to see whether he or she would like to sign a 58 Security Technology Used in Casinos, A S INT’L, September “visit limitation contract” or self-exclusion See French Casino Hit by Lawsuit, BBC NEWS, Aug. 5, 2004. The gambler alleged the casino breached its duty of careto him. The case was dismissed partly because he did not self- Switzerland has similar restrictions concerning the exclude himself, seek counseling, or was able to corroborate monitoring of potential problem gamblers.
losses. Casinos Duty of Care to Problem Gamblers, An Aus-tralian Case Study, GAMBLINGCOMPLIANCE.COM, July 4, 2007.
In Austria, a compulsive gambler has been suc- See Ashton, supra note 48. He has dropped his appeal.
cessful in litigation against Casinos Austria.55 He Ͻhttp://www.leparisen.frϾ Nov. 2008.
It may, of course, be possible to utilize face iden- erator or casino. Furthermore, the issue of self-ex- tification and other techniques. Ladouceur, et al., ac- clusion from casinos was the most important is- knowledge “(v)erifying everyone’s identity would sue in all but two of the nine cases. In those two resolve the problem but is contrary to the prevail- cases where there was no self-exclusion by the ing values of North America, Australia, and New gambler, the defendants’ answer stressed that the gamblers failed to utilize the available self-exclu- In Asian code countries, litigation by compulsive gamblers to regain losses is very rare. Usually, lit- The most important case with far reaching con- igation involving a compulsive gambler will be sequences was the Treyes case. Similar to the pre- based on utilizing compulsive gambling as a reason vious three Ontario compulsive gambling cases, why a gambling debt should not be enforced.61 In the facts in Joe Treyes are tragic. In 1992 he was Korea, a compulsive gambler, Chung, sued Kang- diagnosed with Parkinson’s disease and in 1999, won Casino for $23.5 million for three years of gam- he was diagnosed a compulsive gambler. In 2000, bling losses alleging “the government-run casino he signed a self-exclusion form at Woodbine turned a blind eye to him making bets.” When he Racetrack, but three years later he returned to was awarded only $2.2 million in November 2008, Woodbine. Unlike the Dickert, Macaluso, and Di- he decided to appeal because he claimed the sum galakis complaint, the Treyes65 litigation is fur- ther complicated by the alleged connection be-tween the plaintiff taking certain drugs and The plaintiff in Treyes was assisted in his Parkin- Canadian provinces with casinos have all intro- son claim by two Canadian experts: Dr. Mark duced self-exclusion programs (Alberta, British Co- Guttman and Dr. Robert Williams. Dr. Guttman is lumbia, Manitoba, Nova Scotia, Ontario, and Co-Director of the National Parkinson Foundation Saskatchewan). Most litigation has been in Ontario Centre of Excellence at the University of Toronto with pending litigation in Quebec, Newfoundland, and an investigator in Mirapex clinical trials.
and Nova Scotia. There have been four very high Guttman had opined since at least 2004 that there profile cases by compulsive gamblers primarily might be a connection between anti-Parkinson drugs against the Ontario Lottery and Gaming Corpora- and an uncontrollable gambling urge. Dr. Robert tion’s (OLGC) (now OLG), but also including other Williams, a Professor at the School of Health Sci- ences, University of Lethbridge, and Node Coordi-nator, Alberta Gaming Research Institute, in 2007 “had just received the largest grant ever to study Self-exclusion lists include over 12,500 profiles gambling. And it will focus on a new racino in On- of problem gamblers. Security guards at gaming fa- cilities are quoted as saying, “it’s an impossibletask,” and that some have “even written to superi-ors complaining the current system is failing and that it’s impossible to remember all the faces.”63 By Robert Ladoucier, Caroline Sylvain, and Patrick Gosselin, Self -Exclusion Program: A Longitudinal Evaluation Study, 23 2007, OLGC had settled nine cases purportedly for a combined $1.5 million ($166,000 average) in con- 61 Enforcement of International Gambling Debts, 87AM. JUR.
PROOF OF FACTS (3d), 1–124 (2006).
62 Gambler Sues Casino for Lost $23 mln dr Fortune: Report, The major publicized cases, Lisa Dickert, v. OLGC, Macaluso v. OLGC, Digalakis, Treyes v. 63 Gamblers’ Self-ban System Built on Quicksand?, CBC, June OLGC, et al., and five other non-publicized cases64 were lawsuits filed by compulsive gam- For discussion of the Dickert, Macaluso, and Digalakis liti- gation, see Alex Igelman, Joseph Kelly, Status of Canadian blers against the OGLC, gaming operators, or casi- Compulsive Gambling Litigation, 9(2) GAMING L. REV.
nos. Because gaming operations and casinos in Ontario are government controlled, the govern- Joseph Treyes v. Ontario Lottery Gaming Corp., 2007 WL 2039590 (Ont. S.C. J.), 2007 Carswell Ont. 4458.
ment or some branch or subdivision thereof will 66 Ͻ be a defendant in any claim naming a gaming op- COMPULSIVE GAMBLING LITIGATION AND DUTY OF CARE
It should be noted the Treyes decision of July 11, took “operational” steps to implement the 2007, involved a determination whether or not the lawyers for the compulsive gambler should beawarded a “premium for their professional services (j) Whether the implementations, if any, of in this action. The premium sought is 14.5 percent the OLGC’s policy was reasonable in the of Mr. Treyes’ damages.”67 The main action had been settled pursuant to a confidential settlement“following a one-day mediation.”68 iv. Joe’s Economic Loss, Causation & Re- The Court determined there were the following (k) Whether Joe attended the OLGC’s fa- bled, lost and the quantum of all hiscash losses [sic]? (l) Whether Joe’s depression, after diag- fault did not lie with Joe, regardless ofthe stereotypes associated with PG or (m) Whether Joe was contributorily negli- gent in connection with the gamblinglosses? (c) Whether Parkinson’s disease played a and the financial, psychological, mar-ital, and sometimes suicidal conse- The order also states, “Pathological gambling is heavily laden with stereotypes, the most notoriousof which is the notion that a gambler is the author of his or her misfortune and displays a lack of Treyes claimed to have lost $100,000 cash in playing slot machines at gaming facilities in Wood- Mr. Treyes’ attracted the attention of the CBC and the National Post both of whom reportedon the details of Mr. Treyes’ claim. On one (g) Whether there was a special relationship occasion, Mr. Treyes asked a National Post re- porter for a $5.00 loan so that he could get (i) If there was a policy to combat PG, and Treyes v. OLGC, 2007 WL 2039590, at ¶ 1.
there was a proximate relationship between KELLY AND IGELMAN
contained in the record, confirmed this di- 2000. In this agreement OLGC contracted to use its best efforts to deny Mr. Treyes entry to Institute at the University of Lethbridge.
all of OLGC’s gaming venues in the province of Ontario. Contrary to the agreement Mr.
Parkinson’s disease in his report dated Treyes was permitted access to Woodbine and eases are almost the mirror image of each claimed in the Statement of Claim dated May other. I will mention one other expert, Mr.
Sol Boxenbaum, a well-respected, inde-pendent anti-gambling consumer advo- cate. He is an expert on the issue of the The OLGC took the position that Mr. Treyes’ claim was totally lacking in merit. It main- tained that there was no precedent for a court imposing a duty of care on a gaming venue to find and exclude individuals who identify fidavits filed on behalf of Mr. Treyes in support of this motion. He stated that inall of his years as a consumer advocate in The judge was impressed by the trial tactics of the plaintiff’s lawyers (Hassan Fancy and Monica Chakravarti), and its expert witnesses.
It should be noted that the judge in the Treyes de- 10. Mr. (Hassan) Fancy and his colleagues cision had referred to Sol Boxenbaum as a “well- respected, independent” expert. Boxenbaum, in De- cember 2006 was “interested in recruiting someone prove Mr. Treyes’ claim. I agree with the from the Toronto area, who has asked for self- exclusion but has been allowed back into the venues operated by the OLGC. He’s offering someone the constraining subjective interpretations, re- opportunity to sue Ontario Lottery and Gaming. You will find his email address and telephone number in our Quebec section.”76 Boxenbaum also was a par- demonstrated the state of Mr. Treyes’ life ticipant in class action litigation against Loto-Que- bec and in the federal electronic gaming machines Parkinson’s disease. He was an electrical complaint filed by Chesley Crosbie, a Newfound- for over a decade. He was married and had Dicta in Treyes’ conclusion may have resulted in creating conclusions that will be utilized by lawyers Parkinson’s was initially made, his family for self-excluded gamblers. This may be the result of three factors arising from Treyes. First, the judge concluded casinos have a duty of care to a self-ex- cluded gambler. Second, Treyes accepted a new ev- identiary standard “demonstrative advocacy.” 11. Mr. Fancy and his colleagues extensively researched Mr. Treyes’ pre-pathological were identified. In 1999, he was diagnosed 76 Ontario, CANADA’S GAMBLING WATCH NETWORK NEWSLET- neurologist, Dr. Guttman, whose report is TER, (8) Dec. 4, 2006 (e-mailed newsletter).
Third, the judge indicated that Parkinson’s disease including appellate courts, follow Edmonds? was a factor that was relevant to casino liability.
What steps could the OLGC take to meet its First, the judge in dicta referred to “a recent and duty of care? For the time being, at least one comprehensive article that the plaintiffs included as question has probably been answered by Ed- an exhibit on this motion: William V. Sasso and Jas- monds: Do Ontario and its gaming venues owe minka Kalajdzic, Do Ontario and its Gaming a duty of care to problem gamblers? Under the Venues Owe a Duty of Care to Problem Gamblers? current state of the law, the answer would ap- (2006) 10 Gaming Law Review at 552.”77 The judge heavily relied on this article in concluding gamingoperators had a duty of care to compulsive gam- The content and conclusions of this article are blers. This dicta in Treyes might have opened the likely to have influenced [earlier] the confi- door to damage claims against a gaming operator by every self-excluded gambler. In fact his lawyer,Hassan Fancy, publicly solicited for self-excluded The conclusion that the casino owed Treyes a duty gamblers to sue casinos and has the following ad- of care flies in the face of every other case from a vertisement on Sol Boxenbaum’s Web site78 as of common law jurisdiction. Any indicia of a duty of care may be further eliminated by the revised self-exclusion form that clearly stresses that the obli- gation for exclusion is on the gambler alone. Per-haps the most bizarre conclusion by the Treyes case You can receive legal help to recover your was that: “Pathologic gambling is heavily laden losses from slots if you can say yes to all (3) with stereotypes, the most notorious of which is the notion that a gambler is the author of his or hermisfortune and displays a lack of willpower [Or- a) You were treated for problem gambling; This would eliminate the entire concept of indi- b) You signed OLGC’s ‘Self-Exclusion’ The second result of Treyes is the emergence of a remarkably new doctrine which is a new legal dis- c) You were still provided entry to OLGC’s cipline called Demonstrative Advocacy (D.A.
slot facilities and suffered losses.
Model81) The Web site of Fancy Barristers explains“our secret.” The D.A. Model requires the visual definition Treyes’ dicta clearly implied the duty of care issue of key textual evidence. This is done by inte- was settled as a result of the article by William V.
grating the textual evidence with the true vi- Sasso and Jasminka Kalajdzic, “Do Ontario and its sual conditions of that evidence to constrain Gaming Venues Owe a Duty of Care to Problem subjective interpretations of the textual evi- In relying on Sasso and Kalajdzic, Treyes states: The article addresses many, if not all, of the The textual evidence summarizes “stereotypical” issues that arise in cases such as this one in- and judgmental words such as “problem gambler,” cluding the Voluntary Self Exclusion Program “which must be shattered to allow receipt of the undertaken by the OLGC, and the duty of care truth arising from the textual evidence. . . .” of gaming venues. The authors conclude atpage 570: 77 Id. at ¶ 12–13; see decision on p. 48–49.
78 The ramifications of [Edmonds v. Laplante (15 ϽϾ.
March 2005, Toronto 02/CV226280 (Ont.
80 Treyes v. OLGC, , 2007 WL 2039590, at ¶ 12–13.
S.C.J.)] remain to be seen. Will other courts, 81 ϽϾ.
Furthermore subjective interpretation of stereo- ers’ cards in my possession or undertake to de- types “protract litigation because all counsel read the identical textual evidence but still hold com-pletely different and often contradictory perspec- I acknowledge and agree that OLGC, the pri- vate operators of OLGC gaming facilities, and It is suggested that this interpretation of the use their respective agents and employees have no of Demonstrative Advocacy would virtually elimi- responsibility or obligation to keep or prevent nate centuries of common law. Textual evidence me from entering an OLGC gaming facility, might have limited use on occasion but it is no sub- to remove me should I enter, or to stop me stitution for cross-examination, and evaluation of the expertise and veracity of live witnesses by thetrier of fact. It may be a resurrection of the Sophists I confirm that this form constitutes written no- who have long warned that advocacy might make tice under the Trespass to Property Act that the weaker argument seem to be the stronger.
my entry onto an OLGC gaming facility is not Third, Treyes seems to hold the defendant gam- permitted, and that I may be arrested and ing operators responsible for the acts resulting from charged for trespass without further notice or Treyes’ Parkinson’s disease. This argument was at- warning should I enter an Ontario gaming fa- tempted unsuccessfully in Wells v. Smith Kline and Wynn Las Vegas, (footnote 101 (see p. 52)) wherea Parkinson’s patient sued the drug manufacturer In consideration for being placed on the List, I agree to release and not to sue the Province The major issue that was only tangentially ad- of Ontario, the OLGC, all private operators of dressed in Treyes is whether the casino should be OLGC gaming facilities and their respective liable in case it is negligent in failing to keep out agents and employees, from and for any claims self-excluded gamblers. This issue may have been or causes of action that I have or may have resolved by the new self-exclusion form.
arising out of any act or omission relating to The revised Ontario casino “self-exclusion list the processing, implementation or enforce- and release” application unlike the one sited in ment of this request to be placed on the List, including the forwarding of the contents of this Request to be Placed on the Self-Exclusion List request to any OLGC gaming facility, private operator of such facilities, or their agents oremployees, or for any financial loss, physical I request to be placed on the Ontario Lottery injury or emotional distress or breach of con- and Gaming Corporation’s (“OLGC”) list of fidentiality that may occur as a result. self-excluded persons (the “List”). I acknowl-edge that it is solely my responsibility to re- I have read this Request to be Placed on the frain from visiting an OLGC gaming facility Self-Exclusion List and Release and under- and gambling in the future . . . , and that it is stand all of its terms. I sign voluntarily and my responsibility and decision whether or not with full knowledge of its consequences and I understand that, as a result of being placed While there is no required time period of exclusion, on the List, OLGC and the commercial casi- an individual desiring to end self-exclusion must nos will, within a reasonable time period, re- submit a written request which will not be consid- move me from their mailing lists. I understand, ered for six months. The individual must then com- however, that I may receive marketing mate- plete a reinstatement form and then wait an addi- rials to the extent mailings have already beeninitiated and cannot be stopped. I understandthat I will become ineligible to participate in 82 Adopted Jan. 5, 2005; two pages of explanatory information any players’ programs, and promotional offers.
are attached to the self-exclusion form, including information I confirm that I have either returned all play- COMPULSIVE GAMBLING LITIGATION AND DUTY OF CARE
tional 30 days.83 There is also a mandatory re-entry A class action suit was also filed on behalf of Ger- meeting requirement for self-excluded gamblers ard Schick against Boehringer Ingelheim and Pfizer who wish to have their names removed from the ex- on May 5, 2005.91 The complaint alleges defendants clusion list. The OLG is also developing facial were negligent and that there was a significant risk recognition technology that will make it easier to of adverse impacts by distributing Mirapex, which “has long been associated with compulsive/obses- The earlier form, utilized in Treyes, stated the sive behavior, including compulsive/obsessive gam- OLGC and casino operators would use “best efforts bling, and has been identified as a cause for these to deny you entry”; that the OLGC and operators behaviours in users.”92 The complaint further al- “accept no responsibility” in the event that you fail leged: “Soon after beginning to take Mirapex, Ger- to comply with the ban; and that the self-excluded ard Schick developed a compulsive, obsessive gam- gambler would “release and forever discharge the bling addiction. He gambled indiscriminately and OLGC and casinos from any liability.” The revised relentlessly.”93 The complaint seeks general dam- form is much clearer as to the exculpatory language.
ages of $3 million per plaintiff and $50 million in Predictably, the Treyes dicta inspired a prolifera- punitive damages. According to one of plaintiff’s tion of anti-gambling litigants. In June 2008, Has- lawyers, the litigation is still at an early stage.94 san Fancy and others filed a $3.5 billion class ac-tion lawsuit on behalf of 10,428 self-excluded problem gamblers who lost money gambling after The most significant lawsuit is the class action signing self-exclusion forms between Dec. 1, 1999, litigation in Quebec initiated on May 18, 2001,95 and Feb. 10, 2005, when the new form was intro- by Jean Brochu against Loto-Quebec. Brochu, a lawyer, had embezzled $50,000 from his employer On March 27, 2009, plaintiffs filed an amended and he blamed the VLT’s for his addiction. Un- statement of claim.85 Class A members, as repre- like other litigants, Brochu received about sented by Peter Dennis, requested general damages $150,000 “in provincial court funding.”96 On May of $1 billion, special damages of $1 billion, dam- 6, 2002, the Quebec Court authorized a $700 mil- ages for breach of contract of $2 billion, and puni- lion class action (money damages of $578 million tive damages of $1 billion. Plaintiff’s complaint al- and $119 million exemplary). The suit may in- leged: “(a) Approximately 48% of the total revenue clude “any person who, since June 1993, (until generated each year at the Gambling Venues wouldbe derived from problem gamblers engaging in theGambling Activities”86 and that “the operation ofthe Gambling Venues was an inherently dangerous 83 Self-Exclusion fact sheet OLGC July, 2004. At the Self-Ex- activity for its customers, requiring the OLGC to clusion Conference in Toronto, (“Perspectives on Self-Exclu- take special precautions to prevent injury to such sion,” October 23–24, 2007) compulsive gamblers and experts opined that a compulsive gambler might not sign any form ifit was for a time period longer than 6 months.
The gravamen of the complaint was that OLGC 84 The Big Bluff, supra note 54; Problem Gambler Suing OLC realized the extent of problem gambling and under- for $3.5 Billion, Toronto Star, Apr. 8, 2009.
85 took a duty to enforce a self-exclusion policy by en- tering “into a binding contract”88 with the problem gambler to deny entry to the self-excluded person.
The OLGC breached its duty by relying solely on 89 Id. at ¶ 45, ¶ 49(c).
90 Id. at ¶ 48(d).
“memory based enforcement”89 by employees and failed to utilize measures such as ‘“carding’ using photo-identification and other approaches and tech- nologies reasonably available to the OLGC, some Telephone interview with Darcy R. Merkur of Thomson ,Rogers, plaintiff’s law firm, July 6, 2009.
of which were already in use to identify, monitor, deny entry to and/or exclude ‘cheaters,’ customers 96 Ͻhttp://www.canadianlawyermag.comϾ, Feb. 2002, at 12; engaging in behaviours capable of overcoming the Fonds d’aide aux recours collectifs. Additional funding wasallowed for the payment of expert testimony; telephone in- ‘House Edge’ and under-age customers from the terview with Roger Garneau, attorney for Brochu, Jan. 20, Gambling Venues and for other purposes.”90 KELLY AND IGELMAN
May 30, 2007) became a compulsive gambler by the province . . . ensure casinos have proper using video lottery terminals that were put at their policies in place, including a regularly updated disposal and kept in clubs, bars and other public “comprehensive training program” to help staff identify apparent problem gamblers. . . .
After considerable discovery, the trial com- The report stresses casinos have a “duty” to menced on September 15, 2008. The plaintiff has stop people who appear to be addicted to gam- also filed detailed expert witness reports.98 The plaintiff’s law firm will also be utilizing the exper-tise of two retired judges.99 Loto-Quebec has im- It also found casino policy at the time of Bur- pleaded two manufacturers of gaming equipment as rell’s complaint “relied primarily on self-iden- defendants, claiming it was their responsibility to tification,” in which players identify them- install various warning devices.100 The plaintiff is selves as problem gamblers. They can then not seeking recovery of gambling losses. Loto-Que- make a written request to be refused access to bec has generally denied the allegations in the Brochu complaint, stressing that is has taken ade-quate preventive measures.101 As of April 2009, It did not deal, in a meaningful way, with staff plaintiff finished its presentation and the defendants identifying an individual exhibiting behavior will now present evidence. The proceeding may last The report also stated there were only 8 cases where Newfoundland and Nova Scotia
staff concerns resulted in exclusion of problem gam-blers and 181 cases mostly of self-exclusion.
On April 20, 2007, Ches Crosbie Barristers filed Burrell claimed the casino breached a duty by a Statement of Claim on behalf of the Estate of Su- failing to identify him as a problem gambler. His san Piercey against the Atlantic Lottery Corporation earlier complaint against the provincial Alcohol and Gaming Division was dismissed in 2004.103 12 . . . VLT’s are inherently deceptive, inher- CONCLUSION
ently addictive and inherently dangerous whenused as intended.
A casino operator should use a form similar to the revised self-exclusion form of the OLG, which 18. Like loaded dice, VLT’s combine ran- cheat the player. The virtual reels are pro- Judgment, ¶ 1; On Feb. 21, 2003, the Quebec Court of Ap- peal rejected Loto-Quebec’s attempt to contest the $119 mil- lion sought as exemplary damages. On Mar. 14, 2007, the court set May 30, 2007 as the cut-off date for compulsive gamblersto become part of the class.
98 See Rapport Professionne by Jean-Charles Chebat, Ph.D., When the class action complaint was dismissed on filed with the court on Mar. 16, 2007, and Evaluation de L’In- grounds of sovereign immunity, Crosbie filed a new formation Donnee par le Gouvernment du Quebec, aux Util- complaint in March 2009 alleging a violation of the isateurs des Appareils de Lotterie Video by Jean Leblond,Ph.D., filed Mar. 22, 2007.
Canadian Charter of Rights and Freedoms.
99 Viva Consulting Family Life, Inc., Ͻhttp://www.vivacon- In Nova Scotia, Paul Burrell, who claimed he lostϾ.
$500,000 at Casino Nova Scotia, presently has a 100 WMS Gaming Inc. and Video Lottery Consultants Inc.
civil action before the Supreme Court of Nova Sco- (which is a subsidiary of International Game Technology);Spielo Manufacturing Inc, (New Brunswick) intervened as a tia. His case may be assisted by an ombudsman’s 13 page final report which found casino staff “rarely 101 Answer of Loto-Quebec, Feb. 2, 2007.
102 removed people who appear to be addicted to gam- 103 N.S. takes steps to deal with problem gamblers at casinos; bling, as required by law.” The report recom- Gaming Province accepts ombudsman’s recommendations, TELEGRAPH-JOURNAL (New Brunswick), August 1, 2007.
has made it more difficult for a self-excluded gam- More troubling is the utilization of “Demonstrative bler to sue the gaming operator. The exculpatory Advocacy” which basically concludes that docu- language is clearer and the “best efforts” obligation mentary files may be preferable to an evidentiary by the operator has been eliminated. The form could hearing of witnesses. Finally, Treyes may open liti- be improved by the use of italics and requiring the gation floodgates to any gambler who can allege the patron to initial the exculpatory language. It might pill made me do it. Yet all other common law juris- also be advantageous to follow the recommendation dictions have concluded the self-exclusion form of Dr. Lia Nower whereby the self-excluded gam- shields the operator except for intentional misfea- bler would have to inform the gaming operator of sance. Thus it may be time to litigate since the alter- native of mediating every one of the future lawsuits Nonetheless, the Treyes decision has created diffi- brought by Fancy Barristers may result in almost un- culty in that it basically relieves the compulsive gam- limited payments to the self-excluded. It is possible bler from responsibility. Treyes also suggested the that the Treyes dicta will be utilized not only by com- operators have a duty of care and that the original ex- pulsive gamblers in other Canadian provinces or ter- culpatory “release” of liability may be unenforceable.
ritories, but also in other countries.


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