Justia Gaming Law Opinion Summaries

CEOC, the Chapter 11 debtor, owns and operates casinos. Caesars (CEC) is CEOC's principal owner. CEOC borrowed billions of dollars, issuing notes guaranteed by CEC. As CEOC’s financial position worsened, CEC tried to eliminate its guaranty obligations by selling assets of CEOC to other parties and terminating the guaranties. CEOC's creditors, who had received the guaranties, challenged CEC’s repudiation, seeking approximately $12 billion. CEOC, in its bankruptcy proceeding, asserted claims alleging that CEC caused CEOC to transfer valuable assets to CEC at less than fair value, leaving CEOC saddled with debt (fraudulent transfers) and that the guaranty suits will thwart CEOC’s multi‐billion‐dollar restructuring effort, which depends on a substantial contribution from CEC in settlement of CEOC’s claims, and will let the guaranty plaintiffs take precedence over other creditors. The bankruptcy judge, and a district judge refused CEOC's request to enjoin the guaranty suits until 60 days after a bankruptcy examiner completes his report. The bankruptcy judge’s exercise of jurisdiction over the other suits would have been constitutional, but he thought he lacked statutory authority to enter an injunction under 11 U.S.C. 105(a). The Seventh Circuit vacated, finding that the judges misinterpreted the statute and that issuance of a temporary injunction could facilitate a prompt wind‐up of the bankruptcy. View "Caesars Entm't Operating Co., Inc. v. BOKF, N.A." on Justia Law

The West Virginia Racing Commission suspended the occupational permits of each of seven jockeys for thirty days and imposed a $1,000 fine on each of the jockeys for certain rules governing horse racing. The circuit court reversed and vacated the Commission’s order, finding that there was insufficient evidence to support the Commission’s factual findings. The Supreme Court reversed, holding (1) the fact that the circuit court’s review of the evidence resulted in the circuit court reaching an alternative conclusion based on substantial evidence was not a valid reason to reverse the Commission’s findings; and (2) the Commission’s findings of fact were supported by substantial evidence. View "W. Va. Racing Comm’n v. Reynolds" on Justia Law

This appeal stemmed from a dispute between Pauma and the State over Tribal-State Gaming Compacts. Pauma filed suit against the State based on the court's prior decision in Cachil Dehe Band of Wintun Indians of the Colusa Indian Community v. California (Colusa II). The district court granted summary judgment to Pauma on its misrepresentation claim. The court held that once a court’s judgment interpreting an ambiguous contract provision becomes final, that is and has always been the correct interpretation from its inception. Therefore, the court concluded that Colusa II's interpretation of the Compacts’ license pool provision applies retroactively, such that the State would be deemed to have misrepresented a material fact as to how many gaming licenses were available when negotiating with Pauma to amend its Compact; the district court awarded the proper remedy to Pauma by refunding $36.2 million in overpayments; and the State has waived its sovereign immunity under the Eleventh Amendment. The court agreed with the district court's finding that the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. 2710, is inapplicable in this case and therefore Pauma's argument that the State acted in bad faith is irrelevant. Accordingly, the court affirmed the judgment of the district court. View "Pauma Band of Luiseno Mission Indians v. California" on Justia Law

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

In 1997, Player and his wife established EAR, purportedly to refurbish high-tech machinery . In 2005-2009, EAR defrauded creditors and the couple obtained $17 million in fraudulent transfers from EAR. Before the fraud was detected, they used funds for their personal benefit and spent large amounts at the Horseshoe Casino, Player was known to “walk with chips,” rather than cashing them in, and giving chips to a third party to cash in. Neither is illegal, but are potentially indicative of “structuring” transactions to avoid triggering the $10,000 reporting requirement, a federal crime, 31 U.S.C. 5324. When the fraud was discovered, EAR filed for Chapter 11 bankruptcy. The plan administrator sought to avoid transfers to Horseshoe, alleging that Horseshoe had reasons to believe that Player’s money came from EAR. Horseshoe objected to a motion to compel under 31 C.F.R. 1021.320(e), which governs Suspicious Activity Reports filed by financial institutions, including casinos, to detect money laundering and other violations of the Bank Secrecy Act. The district court ordered an ex parte filing by Horseshoe, which was inaccessible to EAR. The Seventh Circuit affirmed denial of the motion, finding that Horseshoe accepted the transfers without knowledge of the fraud at EAR and could not have uncovered the fraud if it had investigated. View "Brandt v. Horseshoe Hammond, LLC" on Justia Law

Lauren Proctor and Trans-Union National Title Insurance Company brought this action against Whitlark & Whitlark, Inc., d/b/a Rockaways Athletic Club ("Rockaways") and Pizza Man, Forrest Whitlark, Paul Whitlark, Charlie E. Bishop, and Brett Blanks (collectively "Defendants") seeking to recover money Proctor lost while gambling on video poker machines located at Rockaways and Pizza Man over the course of several years, including a time period following the South Carolina Legislature's ban of video poker in 2000. The circuit court granted Proctor's motion for partial summary judgment on her claim under the South Carolina Unfair Trade Practices Act ("UTPA") as to the liability of Defendants. In so ruling, the court found the Legislature had abrogated the doctrine of in pari delicto with regard to losses sustained by illegal gambling for public policy reasons. The Court of Appeals affirmed. After its review, the Supreme Court found that the Legislature enacted specific gambling loss statutes as the exclusive remedy for a gambler seeking recovery of losses sustained by illegal gambling. By this opinion, the Court overruled its decisions that have implicitly authorized recovery beyond these statutes. As a result, the Court held that one engaged in illegal gambling could not recover under UTPA. However, based on the distinct facts of this case, the Court found that Proctor could pursue the portion of her UTPA claim for the losses she alleged that she sustained between 1999 and July 1, 2000, the day on which the ban on video poker became effective. View "Proctor v. Whitlark & Whitlark" on Justia Law

Revel opened an Atlantic City resort-casino, costing $2.4 billion. Revel entered into a 10-year lease with IDEA to run two nightclubs and a beach club. IDEA contributed $16 million of the projected cost of construction in addition to monthly rental payments. The Casino did not turn a profit. Revel filed a “Chapter 22” bankruptcy, seeking permission to sell its assets free of all liens and interests (including leases). The Bankruptcy Court approved and set an auction date. IDEA, concerned that the proposed sale would eliminate the value of its lease notwithstanding its $16 million investment, filed objections. No qualified buyer appeared. The court postponed the auction. A month later, Revel closed the Casino’s doors and barred tenants, IDEA gave notice that it intended to continue operating its beach club and nightclub and expected Revel to honor its obligations to provide uninterrupted utility service. In the meantime Polo agreed to buy the Casino for $90 million. Days before the sale hearing, Revel replied to IDEA’s objections. IDEA appealed an unfavorable order and sought a stay pending appeal, noting that, if the decision were not stayed, its appeal would be moot under 11 U.S.C. 363(m) once the sale closed. The district court denied the motion. The Third Circuit reversed, staying that part of the order that allowed Revel to sell the Casino free of IDEA’s lease. View "In re: Revel AC Inc" on Justia Law

Plaintiffs filed suit against the Gaming Commission and others, alleging that the Commission did not act in accordance with federal law in approving an ordinance and subsequent amendments to that ordinance that permitted the Seneca Nation to operate a class III gaming facility - a casino - on land owned by the Seneca Nation in Buffalo. The court held that the district court correctly dismissed plaintiffs’ complaint in CACGEC III because the DOI and the NIGC’s determination that the Buffalo Parcel is eligible for class III gaming under the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. 2701–2721, was not arbitrary or capricious, an abuse of discretion, or in violation of law; Congress intended the Buffalo Parcel to be subject to tribal jurisdiction, as required for the land to be eligible for gaming under IGRA; and IGRA Section 20’s prohibition of gaming on trust lands acquired after IGRA’s enactment in 1988, 25 U.S.C. 2719(a), does not apply to the Buffalo Parcel. Because the gaming ordinances at issue in the first two lawsuits (CACGEC I and CACGEC II) have been superseded by the most recent amended ordinance, the appeals of CACGEC I and CACGEC II are moot. Accordingly, the court affirmed the judgment of the district court in CACGEC III and dismissed the appeals of CACGEC I and CACGEC II. View "Citizens Against Casino Gambling in Erie Cnty. v. Chaudhuri" on Justia Law

The Coeur d’Alene Tribe (Tribe) petitioned the Idaho Supreme Court for a Writ of Mandamus to compel the Secretary of State to certify Senate Bill 1011 (S.B. 1011) as law. On March 30, 2015, both the Senate and the House of Representatives passed S.B. 1011 with supermajorities. S.B. 1011 had one purpose: to repeal Idaho Code section 54-2512A, a law which allowed wagering on “historical” horse races. The Tribe alleged that the Governor did not return his veto for S.B. 1011 within the five-day deadline under the Idaho Constitution. The Tribe argued that because the veto was untimely, the bill automatically became law and the Secretary of State had a non-discretionary duty to certify it as law. The Supreme Court agreed and granted the Writ. View "Coeur d'Alene Tribe v. Denney" on Justia Law

Plaintiff appealed the district court's dismissal of his second amended complaint against Sony, alleging that Sony violated the Video Privacy Protection Act, 18 U.S.C. 2701, by retaining plaintiff's personally identifiable information beyond the Act's statutory limits, and disclosing his personal information between Sony entities. After carefully examining the legislative history, structure and language of 18 U.S.C. 2710 as a whole, the court agreed with the Sixth and Seventh Circuits, and concluded that the district court properly dismissed plaintiff’s unlawful retention claim for lack of a private right of action. The court also concluded that the district court properly dismissed plaintiff's unlawful disclosure claim because he failed to sufficiently allege that intra-corporate disclosures of consumers’ personal information between Sony entities to sustain the operations of the PlayStation Network violated the Act. Accordingly, the court affirmed the judgment. View "Rodriguez v. Sony Computer Entm't" on Justia Law