Justia Gaming Law Opinion Summaries

Lucky Chances, Inc., Rommel Medina, and Ruell Medina (collectively, Licensees) had their gambling licenses renewed by the California Gambling Control Commission (Commission) with additional conditions. The Commission also imposed a 14-day suspension, stayed it, and ordered a monetary penalty based on findings that Rene Medina, a disqualified person, was materially involved in their gambling operation. The trial court issued a writ of administrative mandamus, ordering the Commission to reconsider the penalty, limiting it to $20,000 per violation.The Licensees appealed, arguing that the imposition of any discipline was unauthorized. The Commission cross-appealed, contending the trial court misinterpreted the relevant regulations and statutes. The Court of Appeal of the State of California, Third Appellate District, reviewed the case.The appellate court concluded that the Commission was authorized to impose additional license conditions based on its findings. However, it determined that the Commission could not use California Code of Regulations, title 4, section 12554, subdivision (d) to impose discipline because the Commission did not find that the Licensees violated any relevant law, regulation, or previously imposed license condition. The court modified the judgment to order the Commission to reconsider the discipline imposed in a manner consistent with its opinion and affirmed the judgment as modified. View "Lucky Chances, Inc. v. Cal. Gambling Control Com." on Justia Law

KalshiEx LLC, a regulated commodities exchange, sought to offer "Congressional Control Contracts" allowing individuals to bet on the outcome of the November 2024 congressional elections. The Commodity Futures Trading Commission (CFTC) prohibited these contracts, arguing they constituted gaming or election gambling, which is illegal in many states. Kalshi challenged this decision under the Administrative Procedure Act, claiming the CFTC's determination was arbitrary and capricious.The U.S. District Court for the District of Columbia ruled in favor of Kalshi, finding that the CFTC erred in categorizing the contracts as gaming or gambling. The court vacated the CFTC's decision, reasoning that the term "gaming" did not apply to election contracts and that the contracts did not involve illegal activity under state law. The CFTC then sought a stay of the district court's judgment while it pursued an appeal.The United States Court of Appeals for the District of Columbia Circuit reviewed the CFTC's emergency motion for a stay pending appeal. The court denied the motion, concluding that the CFTC failed to demonstrate that it or the public would suffer irreparable harm without a stay. The court noted that the CFTC's concerns about potential harms, such as market manipulation and threats to election integrity, were speculative and not substantiated by concrete evidence. The court left open the possibility for the CFTC to renew its stay request if more concrete evidence of irreparable harm emerged during the appeal. The administrative stay was dissolved. View "KalshiEX LLC v. CFTC" on Justia Law

In 2020, a federal grand jury indicted David DeQuattro, an architect, and Cedric Cromwell, Chairman of the Mashpee Wampanoag Tribal Council and President of the Mashpee Wampanoag Gaming Authority. They were charged with various federal offenses, including bribery and extortion, related to Cromwell allegedly soliciting and DeQuattro allegedly providing checks and other items of value to protect a contract between DeQuattro's firm and the Gaming Authority for building a casino on tribal land.The United States District Court for the District of Massachusetts held a jury trial where DeQuattro was convicted of one count of federal-program bribery, and Cromwell was convicted of two counts of federal-program bribery and multiple counts of Hobbs Act extortion. However, the District Court later entered a judgment of acquittal on the Hobbs Act-related counts, determining that the Hobbs Act did not clearly abrogate tribal immunity. Both defendants appealed their § 666 convictions, and the government cross-appealed the judgment of acquittal on the Hobbs Act counts.The United States Court of Appeals for the First Circuit reviewed the case. The court reversed both the § 666 convictions and the judgment of acquittal. The court found that the evidence did not suffice to show that the RGB contract was "business" of the Tribe, as required under § 666, because the Gaming Authority, which entered the contract, was a separate legal entity from the Tribe and received almost all its funding from a third party. The court also reversed the District Court's judgment of acquittal on the Hobbs Act convictions, holding that tribal officials do not enjoy immunity from federal criminal prosecution and that the evidence was sufficient to show Cromwell's intent to engage in a quid pro quo arrangement. The case was remanded for further proceedings consistent with this opinion. View "United States v. Dequattro" on Justia Law

A patron at Encore Boston Harbor Casino challenged the casino's practice of redeeming slot-machine tickets. When patrons finish using a slot machine, they receive a TITO ticket, which can be redeemed for cash. The casino offers two redemption options: cashier cages, which provide full cash value, and self-serve kiosks (TRUs), which dispense only bills and issue a TRU ticket for any remaining cents. The TRU ticket can be redeemed at the cashier cage or used in another slot machine. The plaintiff argued that this practice was unfair and deceptive, violating Massachusetts regulations and consumer protection laws.The case was initially filed in Massachusetts state court and then removed to federal court. The district court dismissed the plaintiff's unjust enrichment claim, ruling that an adequate legal remedy was available under Chapter 93A. The court later granted summary judgment in favor of the defendants on the remaining claims, including breach of contract, promissory estoppel, conversion, and unfair and deceptive business practices. The court found that the casino's practice did not violate its internal controls or Massachusetts regulations and that the plaintiff failed to show the practice was unfair or deceptive.The United States Court of Appeals for the First Circuit reviewed the case. The court affirmed the district court's dismissal of the unjust enrichment claim, agreeing that Chapter 93A provided an adequate legal remedy. The court also upheld the summary judgment on the remaining claims, concluding that the casino's practice of issuing TRU tickets for cents did not violate regulations or constitute unfair or deceptive practices. The court found no evidence that the practice was immoral, unethical, oppressive, or unscrupulous, and ruled that the plaintiff's common law claims also failed. View "Schuster v. Wynn Resorts Holdings, LLC" on Justia Law

Steve Wynn, a prominent figure in Nevada gaming and politics, filed a defamation lawsuit against The Associated Press (AP) and its reporter, Regina Garcia Cano. The lawsuit stemmed from an article published by AP that reported on allegations of sexual assault against Wynn from the 1970s. The article was based on complaints obtained from the Las Vegas Metropolitan Police Department. Wynn claimed the allegations were false and that AP published the article with actual malice.The Eighth Judicial District Court in Clark County granted AP's special motion to dismiss under Nevada's anti-SLAPP statutes, which are designed to protect free speech and petitioning activities from meritless lawsuits. The district court found that the article was a good faith communication related to an issue of public concern and that Wynn failed to show a probability of prevailing on his defamation claim. Wynn appealed this decision.The Supreme Court of Nevada reviewed the case de novo. The court affirmed the district court's decision, holding that AP met its burden under the first prong of the anti-SLAPP analysis by showing the article was a good faith communication on a matter of public interest. The court also clarified that under the second prong, a public figure plaintiff must provide sufficient evidence for a jury to reasonably infer, by clear and convincing evidence, that the publication was made with actual malice. Wynn failed to meet this burden, as his evidence did not demonstrate that AP published the article with knowledge of its falsity or with reckless disregard for the truth. Consequently, the Supreme Court of Nevada affirmed the district court's order granting the special motion to dismiss. View "Wynn v. The Associated Press" on Justia Law

Sutter’s Place, Inc., which operates Bay 101 Casino, challenged the City of San Jose's annual cardroom regulation fee, arguing it was an unconstitutional tax imposed without voter approval and violated due process. The fee was equally divided between Bay 101 and Casino M8trix, the only two cardrooms in the city. The plaintiff contended that the fee included costs outside the constitutional exception for regulatory charges and that the equal allocation was unfair.The Santa Clara County Superior Court held a bench trial and found the fee valid, covering reasonable regulatory costs and fairly allocated between the cardrooms. The court determined the fee was for regulatory functions, the amount was necessary to cover costs, and the equal allocation was reasonable given the equal number of tables and benefits to both cardrooms. The court also excluded certain expert testimony from the plaintiff and denied a separate due process trial.The California Court of Appeal, Sixth Appellate District, reviewed the case. It upheld the trial court's finding that the equal allocation of the fee was reasonable but reversed the judgment on other grounds. The appellate court found the trial court erred by not specifically determining whether all costs included in the fee fell within the constitutional exception for regulatory charges. The case was remanded for the trial court to identify and exclude any non-permissible costs from the fee and to conduct further proceedings on the due process claim if necessary. The appellate court also reversed the award of costs to the city and directed the trial court to reassess costs after applying the correct legal standards. View "Sutter's Place, Inc. v. City of San Jose" on Justia Law

Stadium Casino RE, LLC ("Stadium") contested the Pennsylvania Gaming Control Board's ("Board") decision to award a Category 4 slot machine license to SC Gaming OpCo, LLC and Ira Lubert (collectively "SC Gaming"). Stadium argued that Lubert's bid was invalid because it was funded by individuals not authorized to participate in the auction, and that the Board should have awarded the right to apply for the license to Stadium as the second-highest bidder or conducted another auction.The Commonwealth Court initially reviewed the case, where Stadium sought declarations that Lubert's bid was invalid and that the Board lacked authority to consider SC Gaming's application. Stadium also sought an injunction to stop the Board from considering SC Gaming's application and requested a mandamus order to allow Stadium to apply for the license or to conduct another auction. The Board and SC Gaming filed preliminary objections, which the Commonwealth Court overruled, ordering them to file answers. Meanwhile, the Board proceeded with SC Gaming's licensing application, allowing Stadium to intervene but denying its discovery requests. The Board ultimately granted SC Gaming's application and issued an adjudication supporting its decision.The Supreme Court of Pennsylvania reviewed the case, focusing on whether the Board exceeded its statutory authority and failed to comply with mandatory directives in the Gaming Act. The Court found that the Board had the authority to conduct the auction and licensing proceedings and that Section 1305.2(c) of the Gaming Act did not impose jurisdictional limitations on the Board's ability to act. The Court held that the Board's procedures and findings, including the determination that SC Gaming was wholly owned by Lubert, were within its discretion and supported by the evidence. Consequently, the Court affirmed the Board's decision to award the license to SC Gaming and dismissed the action pending in the Commonwealth Court as moot. View "Stadium Casino RE, LLC v. Pennsylvania Gaming Control Board" on Justia Law

The case involves Beteiro, LLC, which owns several patents related to facilitating gaming or gambling activities at a remote location. The patents disclose an invention that allows a user to participate in live gaming or gambling activity via a user communication device, even if the user is not in the same location as the gaming venue. Beteiro filed multiple patent infringement cases against various companies, alleging that they infringe certain claims of the patents by providing gambling and event wagering services.The United States District Court for the District of New Jersey dismissed Beteiro's cases for failure to state a claim based on the subject matter ineligibility of the patent claims. The court found that the claims were directed to an abstract idea and did not contain an inventive concept. Beteiro appealed the decision.The United States Court of Appeals for the Federal Circuit affirmed the district court's decision. The court agreed that Beteiro's claims were directed to the abstract idea of exchanging information concerning a bet and allowing or disallowing the bet based on where the user is located. The court also found that the claims did not provide an inventive concept because they achieved the abstract steps using several generic computers. The court concluded that Beteiro's claims amounted to nothing more than the practice of an abstract idea using conventional computer equipment, including GPS on a mobile phone, which are not eligible for patent under current Section 101 jurisprudence. View "BETEIRO, LLC v. DRAFTKINGS INC. " on Justia Law

The case involves two casino operators, PNK (Baton Rouge) Partnership, PNK Development 8 LLC, PNK Development 9 LLC, and Centroplex Centre Convention Hotel, LLC, who incentivize their patrons with rewards, including complimentary hotel stays. The City of Baton Rouge/Parish of East Baton Rouge Department of Finance and Linda Hunt, its director, discovered through an audit that the operators had not remitted state and local taxes associated with these complimentary stays for several years. The City argued that the operators needed to pay these taxes, while the operators presented various arguments as to why they did not. The City filed a lawsuit in state court, which the operators removed to federal court on diversity jurisdiction grounds.The operators' removal of the case to federal court was challenged by the City, which argued that the tax abstention doctrine (TAD) warranted abstention in this case. The United States District Court for the Middle District of Louisiana agreed with the City, finding that all five TAD factors favored abstention: Louisiana's wide regulatory latitude over its taxation structure, the lack of heightened federal court scrutiny required by the operators' due process rights invocation, the potential for the operators to seek an improved competitive position in the federal court system, the greater familiarity of Louisiana courts with the state's tax regime and legislative intent, and the constraints on remedies available in federal court due to the Tax Injunction Act.The United States Court of Appeals for the Fifth Circuit affirmed the District Court's decision. The Appeals Court found that the District Court had correctly applied the TAD and had not abused its discretion in deciding to abstain. The Appeals Court agreed that all five TAD factors favored abstention and that any doubt about the propriety of removal should be resolved in favor of remand. View "City of Baton Rouge v. PNK" on Justia Law

The case involves two casino operators, PNK (Baton Rouge) Partnership, PNK Development 8 LLC, PNK Development 9 LLC, and Centroplex Centre Convention Hotel, LLC, who incentivize their patrons with rewards, including complimentary hotel stays. The City of Baton Rouge/Parish of East Baton Rouge Department of Finance and its director, Linda Hunt, discovered that the operators had not remitted state and local taxes associated with these complimentary stays for several years. The City argued that the operators needed to pay these taxes, while the operators put forth various arguments as to why they did not. The City filed a suit in state court, which the operators removed to federal court on diversity jurisdiction.The operators' cases were initially heard in the United States District Court for the Middle District of Louisiana. The City filed a Motion to Remand, arguing that the tax abstention doctrine (TAD), as put forth in Levin v. Commerce Energy, Inc., warranted abstention. The District Court agreed with the City, stating that all five TAD factors favored abstention: Louisiana's wide regulatory latitude over its taxation structure, the lack of heightened federal court scrutiny required for the operators' due process rights under the Louisiana Constitution, the potential for the operators to seek an improved competitive position in the federal court system, the familiarity of Louisiana courts with the state's tax regime and legislative intent, and the constraints of the Tax Injunction Act on remedies available in federal court.The case was then reviewed by the United States Court of Appeals for the Fifth Circuit. The court affirmed the District Court's decision, agreeing that the TAD applied and that all five factors favored abstention. The court concluded that the District Court's decision to abstain was within its discretion. View "City of Baton Rouge v. Centroplex Centre Convention Hotel, LLC" on Justia Law