Justia Gaming Law Opinion Summaries

This action raised several challenges to recently enacted legislation and administrative rules related to gambling in the state. Plaintiffs filed an amended complaint against several state entities challenging the constitutionality of video lottery terminals and H.B. 1, the act that authorized them, and legislative actions that related to Ohio’s four casinos, particularly H.B. 277 and H.B. 519. Lastly, Plaintiffs claimed that Ohio Const. art. XV, 6, H.B.1, H.B. 277, and H.B. 519 violate equal protection by granting a monopoly to the gaming operators whom the state approved. The trial court granted the state’s motion to dismiss the action for lack of standing and for failure to state claim, concluding that none of the plaintiffs had standing. The court of appeals affirmed. The Supreme Court affirmed in part and reversed in part, holding (1) Plaintiffs failed to establish that they had organizational standing or standing based on their status as individuals experiencing the negative effects of gambling, parents and a teacher of public-school students, and contributors to the commercial-activity tax; and (2) one plaintiff, however, sufficiently alleged standing to survive Defendants’ motion to dismiss his equal protection claim. Remanded. View "State ex rel. Walgate v. Kasich" on Justia Law

Plaintiffs, seven entities who are collectively attempting to develop a casino-resort complex in the Catskills, filed suit under the Sherman Act, 15 U.S.C. 1, 2, alleging that defendants entered into an anti-competitive scheme to obstruct plaintiffs' resort development. At issue is whether plaintiffs have alleged a plausible relevant geographic market for their casino-related products and services. In this case, plaintiffs define the relevant market as the Racing/Gaming Market in the Catskills Region. The court held that plaintiffs’ pleadings fail to define a plausible relevant geographic or product market for antitrust purposes, and that the district court properly dismissed their Sherman Act claims. Accordingly, the court affirmed the judgment. View "Concord Assoc., L.P. v. Entertainment Properties Trust" on Justia Law

Bettor Racing sought judicial review of NIGC finding that Bettor Racing had committed three violations of the Federal Indian Gaming Regulatory Act, 25 U.S.C. 2711(a), and NIGC's issuance of a Notice and Civil-Fine Assessment. The court concluded that the facts support NIGC’s finding that Bettor Racing (1) operated without an NIGC-approved management contract, (2) operated under two unapproved modifications, and (3) held the sole proprietary interest in the gaming operations. Therefore, the district court did not err in upholding the charged violations. The court also concluded that the district court did not err in finding the $5 million fine both reasonable and constitutional. Finally, the court rejected Bettor Racing's contention that NIGC violated its right to due process when the agency dismissed the case on summary judgment without a hearing because NIGC relied on undisputed facts in reaching its conclusion. Accordingly, the court affirmed the judgment. View "Bettor Racing, Inc. v. National Indian Gaming Comm." on Justia Law

Two mothers and their sons alleged that Internet gambling websites owe them the money that the men lost in gambling. An Illinois statute imposes criminal penalties on anyone who “knowingly establishes, maintains, or operates an Internet site that permits a person to play a game of chance or skill for money or other thing of value by means of the Internet or to make a wager upon the result of any [such] game,” 720 ILCS 5/28-1(a)(12) and “any person who knowingly permits any premises or property owned or occupied by him or under his control to be used as a gambling place.” It provides that “any person who by gambling shall lose to any other person, any sum of money or thing of value, amounting to the sum of $50 or more ... may sue for and recover ... in a civil action against the winner thereof.” The Seventh Circuit affirmed dismissal. The sons, who used the websites, failed to sue within six months of their losses. The government shut down the sites in 2011. The mothers, who never gambled on the sites, have timely claims, but the defendants are not the winners of any game that their sons played, but are the sites that hosted the gambling. View "Fahrner v. Tiltware, LLC" on Justia Law

The Debtors own the Atlantic City Trump Taj Mahal casino. The union represents 1,136 employees. The 2011 collective bargaining agreement was to remain in effect through September 14, 2014 and continue in full force and effect from year to year thereafter, unless either party served 60 days written notice of its intention to terminate, modify, or amend. In March 2014, the Debtors gave notice of their “intention to terminate, modify or amend” and sought to begin negotiations. The Union initially declined. On August 20 the parties met. The Debtors emphasized their critical financial situation. No agreement was reached. The Debtors filed for Chapter 11 bankruptcy. On September 11, the Debtors asked the Union to extend the term of the CBA. The Union refused. The CBA expired. On September 17, the Debtors sent the Union a proposal with supporting documentation. After meetings, the Debtors successfully moved, under section 1113, to reject the CBA and implement the terms of the Debtors’ last proposal, asserting that rejection of the CBA was necessary to the reorganization.While 11 U.S.C. 1103 allows a debtor to terminate a CBA under certain circumstances, the National Labor Relations Act prohibits an employer from unilaterally changing CBA terms even after its expiration; key terms of an expired CBA continue to govern until the parties reach a new agreement or bargain to impasse. The Third Circuit affirmed, finding section 1113 does not distinguish between the terms of an unexpired CBA and terms that continue to govern after the CBA expires. View "In re: Trump Entm't Resorts" on Justia Law

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