Justia Gaming Law Opinion SummariesArticles Posted in Contracts
Gattineri v. Wynn MA, LLC
The Supreme Judicial Court held that an agreement entered into between Plaintiff Anthony Gattineri and Defendants Wynn MA, LLC and Wynn Resorts, Limited (collectively, Wynn) in San Diego California (the San Diego agreement) was unenforceable for reasons of public policy.Wynn entered into an option contract with FBT Everett Realty, LLC (FBT) to purchase a parcel of property. As Wynn's application for a casino license proceeded, the Massachusetts Gaming Commission discovered that there was a possibility of concealed ownership interests in FBT by a convicted felon with organized crime connections. In response, FBT lowered the purchase price for the parcel. The Commission approved the amended option agreement. Gattineri, a minority owner of FBT, opposed the price reduction and refused to sign the certificate required by the Commission. Gattineri alleged that at the San Diego meeting Wynn had agreed to pay Gattineri an additional $19 million in exchange for Gattineri signing the certificate. After the Commission awarded Wynn a casino license Gattineri brought suit claiming breach of the San Diego agreement because Wynn never paid Gattineri the promised $19 million. The Supreme Judicial Court held (1) the agreement was deliberately concealed from the Commission and inconsistent with the terms approved by the Commission; and (2) enforcement of such a secret agreement constituted a clear violation of public policy. View "Gattineri v. Wynn MA, LLC" on Justia Law
Santa Ynez Band of Chumash etc. v. Lexington Ins. Co.
The Santa Ynez Band of Chumash Mission Indians of the Santa Ynez Reservation California (Chumash) appealed a judgment following the granting of a motion for summary judgment in favor of Lexington Insurance Company (Lexington) in Chumash’s lawsuit against Lexington for denial of insurance coverage. The Second Appellate District affirmed. The court concluded that, among other things, Chumash did not present sufficient evidence to show that the COVID-19 virus caused physical property damage to its casino and resort so as to fall within the property damage coverage provisions of the Lexington insurance policy. The court explained that had the Chumash Casino and Resort sustained property damage, it was required to specify what property was damaged and to submit a claim for the dollar amount of that loss. The absence of such information supports Lexington’s decision to deny coverage. View "Santa Ynez Band of Chumash etc. v. Lexington Ins. Co." on Justia Law
Gattineri v. Wynn MA, LLC
In this case concerning the regulation of gambling licenses in the Commonwealth the First Circuit reversed in part the summary judgment for Defendants and certified questions of law to the Massachusetts Supreme Judicial Court (SJC).An option contract for the purchase of land gave Encore Boston Harbor the option to purchase land from FBT Realty, LLC for $75 million should the Massachusetts Gaming Commission grant Encore a gaming license. The Commission ultimately conditioned the grant of the license on a $35 million purchase price for the sale of the land and signed certification by each member of FBT, except for Plaintiff, that they were sole members of the company. Defendants presented Plaintiff with an offer that would "make him whole" if he signed the certification in a contract. Plaintiff executed the required certification and then brought this action alleging, among other claims, breach of contract. The district court granted summary judgment for Defendants, finding no valid or enforceable contract. The First Circuit reversed in part, holding that genuine issues of material fact existed as to certain claims and that the question of whether the contract was unenforceable as contrary to state law and/or as a violation of public policy must be resolved by the SJC. View "Gattineri v. Wynn MA, LLC" on Justia Law
Gostev v. Skillz Platform, Inc.
B.D. v. Blizzard Entertainment
Blizzard Entertainment, Inc. (Blizzard) appealed an order denying its motion to compel arbitration. B.D., a minor, played Blizzard’s online videogame “Overwatch,” and used “real money” to make in-game purchases of “Loot Boxes” - items that offer “randomized chances . . . to obtain desirable or helpful ‘loot’ in the game.” B.D. and his father (together, Plaintiffs) sued Blizzard, alleging the sale of loot boxes with randomized values constituted unlawful gambling, and, thus, violated the California Unfair Competition Law (UCL). Plaintiffs sought only prospective injunctive relief, plus attorney fees and costs. Blizzard moved to compel arbitration based on the dispute resolution policy incorporated into various iterations of the online license agreement that Blizzard presented to users when they signed up for, downloaded, and used Blizzard’s service. The trial court denied the motion, finding a “reasonably prudent user would not have inquiry notice of the agreement” to arbitrate because “there was no conspicuous notice of an arbitration” provision in any of the license agreements. The Court of Appeal disagreed: the operative version of Blizzard’s license agreement was presented to users in an online pop-up window that contained the entire agreement within a scrollable text box. View "B.D. v. Blizzard Entertainment" on Justia Law
Land Holdings I, LLC d/b/a Scarlet Pearl, LLC v. GSI Services, LLC
Land Holdings I, LLC, d/b/a Scarlet Pearl, LLC (“Casino”), sought to expunge a lien filed by GSI Services, LLC (“GSI”). The chancellor denied the Casino’s petition to expunge the lien because GSI performed work at the Casino within ninety days of filing its lien. Finding no error, the Mississippi Supreme Court affirmed the chancellor’s order. View "Land Holdings I, LLC d/b/a Scarlet Pearl, LLC v. GSI Services, LLC" on Justia Law
Citizen Potawatomi Nation v. State of Oklahoma
Oklahoma and the Citizen Potawatomi Nation (the “Nation”) entered into a Tribal-State gaming compact; Part 12 of which contained a dispute-resolution procedure that called for arbitration of disagreements “arising under” the Compact’s provisions. The terms of the Compact indicated either party could, “[n]otwithstanding any provision of law,” “bring an action against the other in a federal district court for the de novo review of any arbitration award.” In Hall Street Associates, LLC. v. Mattel, Inc., 552 U.S. 576, (2008), the Supreme Court held that the Federal Arbitration Act (“FAA”) precluded parties to an arbitration agreement from contracting for de novo review of the legal determinations in an arbitration award. At issue before the Tenth Circuit Court of Appeals was how to treat the Compact’s de novo review provision given the Supreme Court’s decision in Hall Street Associates. The Nation argued the appropriate course was to excise from the Compact the de novo review provision, leaving intact the parties’ binding obligation to engage in arbitration, subject only to limited judicial review under 9 U.S.C. sections 9 and 10. Oklahoma argued the de novo review provision was integral to the parties’ agreement to arbitrate disputes arising under the Compact and, therefore, the Tenth Circuit should sever the entire arbitration provision from the Compact. The Tenth Circuit found the language of the Compact demonstrated that the de novo review provision was a material aspect of the parties’ agreement to arbitrate disputes arising thereunder. Because Hall Street Associates clearly indicated the Compact’s de novo review provision was legally invalid, and because the obligation to arbitrate was contingent on the availability of de novo review, the Tenth Circuit concluded the obligation to arbitrate set out in Compact Part 12 was unenforceable. Thus, the matter was remanded to the district court to enter an order vacating the arbitration award. View "Citizen Potawatomi Nation v. State of Oklahoma" on Justia Law
J&J Ventures Gaming, LLC v. Wild, Inc.
The 2009 Video Gaming Act (230 ILCS 40/1)) legalized the use of video gaming terminals in licensed establishments, including bars, veterans’ organizations, and truck stops, and authorizes the Illinois Gaming Board to supervise all video gaming operations governed by the Act. A video gaming terminal may be placed in a licensed establishment only if the establishment has entered into a written use agreement with the licensed terminal operator. A use agreement may be assigned only from one licensed terminal operator to another. Action, an unlicensed terminal operator, executed “Exclusive Location and Video Gaming Terminal Agreements” with each of 10 establishments, stating that Action and the establishments would obtain licenses. In 2012 the parties amended their agreements by adding clauses, purportedly “necessary in order for the Agreement to comply with the [Act] and the rules and regulations," including clauses providing that Action could assign its rights and acknowledging that the agreement and the amendment “are subject to and contingent upon the [Gaming Board’s] review.” In 2012, the Board denied Action’s license application based on findings that Acton employees were associated with individuals who had been convicted of illegal gambling. Action assigned its rights under the agreements to J&J, a licensed operator. The establishments were not yet licensed. Subsequently, each of the establishments signed separate location agreements with Accel, a licensed operator. J&J and Action sued; the circuit courts ruled that the location agreements were not use agreements, but were valid contracts, and enjoined Accel from operating terminals at the establishments. The appellate court and the Illinois Supreme court held that the circuit courts lacked subject-matter jurisdiction because the Board has exclusive authority over contracts for the placement of video gaming terminals. The comprehensive statutory scheme vests jurisdiction over video gaming operations with the Board; the agreements purport to control placement and operation of video gaming terminals. View "J&J Ventures Gaming, LLC v. Wild, Inc." on Justia Law
Carlsen v. GameStop, Inc.
San Pasqual Band of Mission Indians v. California
This appeal stemmed from a contract dispute between San Pasqual and the State governing San Pasqual's operation of a casino on its land. San Pasqual filed two suits against the State that were consolidated, alleging breach of contract and seeking damages for five years of lost profits. On appeal, San Pasqual challenged the district court's grant of summary judgment to the State. The court agreed with the State that Section 9.4 of the Compact between the State and San Pasqual is unambiguous, applies to this action, and bars San Pasqual’s damages claim. Accordingly, the court affirmed the judgment. View "San Pasqual Band of Mission Indians v. California" on Justia Law