Justia Gaming Law Opinion Summaries

In consolidated appeals, Brighton Ventures 2 LLC and the St. John Life Center ("the Life Center") appealed a circuit court judgment order forfeiting $446,897.19 that was found to have been used as bets or stakes as part of an illegal gambling operation. The City of Brighton ("the City") had an ordinance permitting the establishment of charitable bingo operations within its city limits. In early 2019, an application for a charity-bingo business license was submitted to the City on behalf of Super Highway Bingo ("the casino"); the Life Center was listed as the named charity. In February 2019, the City issued the requested business license, and, in March 2019, the casino officially opened. According to the record, Brighton Ventures was responsible for the day- to-day operations of the casino and, in exchange for its management services, received 85% of the casino's profits. The Life Center, in return, received 15% of the casino's profits. Around the time the casino opened, the Alabama Attorney General's Office began an investigation into "electronic bingo" activity occurring there. "Electronic bingo is illegal in Alabama." An undercover investigator from the Attorney General's office was able to play electronic bingo games at the casino. The State executed multiple search warrants at the casino during which it seized, among other things, over 200 "electronic bingo" machines and large sums of cash. Relevant to these appeals, the State then initiated separate actions, petitioning the circuit court for an in rem civil forfeiture of the $446,897.19. Brighton Ventures and the Life Center denied that the funds seized were "used as bets or stakes in gambling activity" as described in § 13A-12-30(c) and argued that the State had unlawfully seized the funds. They also asserted counterclaims in which they alleged, among other things, that forfeiture of the funds constitutes an "excessive fine" in violation of the Excessive Fines Clause of the Eighth Amendment to the United States Constitution. The Alabama Supreme Court found no error in the circuit court's judgment and affirmed the order ordering the forfeiture. View "Brighton Ventures 2 LLC v. Alabama" on Justia Law

In 2017, the State of Alabama sued, among others, Epic Tech, LLC ("Epic Tech"); K.C. Economic Development, LLC, d/b/a VictoryLand ("KCED"); and Sheriff Andre Brunson, in his official capacity as sheriff of Macon County (referred to collectively as "the Macon County defendants"). At around that same time, the State sued, White Hall Enrichment Advancement Team d/b/a Southern Star Entertainment ("Southern Star") and White Hall (referred to collectively as "the Lowndes County defendants"). In each action, the State sought an order declaring the illegal gambling operations conducted by the defendants to be a public nuisance and related injunctive relief. The State's complaint in each action was also accompanied by a motion seeking the entry of an order preliminarily enjoining the defendants from engaging in illegal gambling operations. In case nos. 1200798 and 1210064, the State appealed Macon Circuit Court and Lowndes Circuit Court orders denying the State's requests for injunctive relief. In case no. 1210122, defendants/counterclaim plaintiffs White Hall Entertainment and the White Hall Town Council (referred to collectively as "White Hall"), cross-appealed the Lowndes Circuit Court's order dismissing their counterclaims against the State. The Alabama Supreme Court consolidated these appeals. In case no. 1200798, the Court reversed the Macon Circuit Court order denying the State's request for preliminary injunctive relief and remanded the matter for that court to enter, within 30 days, a preliminary injunction enjoining the defendants' gambling operations in Macon County; in case no. 1210064, the Court reversed the Lowndes Circuit Court order denying the State's request for permanent injunctive relief and remanded the matter for that court to enter, within 30 days, a permanent injunction enjoining the defendants' gambling operations in Lowndes County; and in case no. 1210122, the Court affirmed the Lowndes Circuit Court's order dismissing White Hall's counterclaims. View "White Hall Entertainment, et al. v. Alabama" on Justia Law

In 2003, the Alabama Legislature and the citizens of Greene County voted to allow nonprofit organizations in that county to operate bingo games for fundraising purposes. Greenetrack, Inc. ("Greenetrack"), which was not a nonprofit organization, almost immediately began offering live and electronic bingo games at its gambling facility. From 2004 to 2008, Greenetrack reaped vast profits under the guise that its whole casino-style bingo operation was constantly being leased and operated by a revolving slate of local nonprofit organizations, whose nominal role earned them a tiny fraction of the bingo proceeds. Eventually, the Alabama Department of Revenue ("the Department") audited Greenetrack, found that its bingo activities were illegal, and concluded that it owed over $76 million in unpaid taxes and interest. Following a decade of litigation, the Alabama Tax Tribunal voided the assessed taxes on the threshold ground that Greenetrack's bingo business (regardless of its legality) was tax-immune under a statute governing Greenetrack's status as a licensed operator of dog races. The Department appealed, and the Alabama Supreme Court reversed, rejecting the statutory analysis offered by the Tax Tribunal and circuit court. Judgment was rendered in favor of the Department. View "Alabama Department of Revenue v. Greenetrack, Inc." on Justia Law

The State of Alabama appealed a circuit court order that dismissed the State's claims seeking injunctive and declaratory relief "to abate a public nuisance of unlawful gambling," pursuant to section 6-5-120, Ala. Code 1975, against some, but not all, of the defendants. The circuit court certified its order as final pursuant to Rule 54(b), Ala. R. Civ. P. However, we determine that the order was not appropriate for Rule 54(b) certification; therefore, the Alabama Supreme Court dismissed the appeal. View "Alabama v. Epic Tech, Inc., et al." on Justia Law

Two appeals were consolidated for the purposes of this opinion: case no. 1180675 ("the Lowndes County case"), the State appealed the Lowndes Circuit Court's order granting the motions to dismiss filed by Epic Tech, LLC; White Hall Enrichment Advancement Team d/b/a Southern Star Entertainment; White Hall Entertainment; and the White Hall Town Council (collectively, "the Lowndes County defendants"); case no. 1180794 ("the Macon County case"), the State appealed the Macon Circuit Court's order granting the motions to dismiss filed by Epic Tech, LLC, and K.C. Economic Development, LLC, d/b/a VictoryLand Casino ("KCED")(collectively, "the Macon County defendants"). In 2017, the State sued the Lowndes County defendants asserting a public-nuisance claim. In a second amended complaint, the State asserted it was seeking declaratory and injunctive relief to abate a public nuisance of unlawful gambling through continued operation of illegal slot machines and other "unlawful gambling devices." The Lowndes County defendants moved to dismiss, raising, amongst other defenses, that the State failed to join the operators of two Wind Creek casinos. The Lowndes Circuit Court ultimately granted the motion to dismiss, finding it did not have subject-matter jurisdiction to grant the relief the State requested. The State also sued defendants in Macon County Circuit court, again alleging public nuisance from operation of illegal slot machines. Again, the State requested declaratory and injunctive relief. The Macon County court likewise dismissed on grounds it lacked subject-matter jurisdiction.The State argued on appeal to the Alabama Supreme Court that the circuit courts erred in concluding they lacked subject matter jurisdiction over their respective cases. The Supreme Court concurred with the State and reversed the circuit courts. The matters were remanded for further proceedings. View "Alabama v. Epic Tech, LLC, et al." on Justia Law

Jerry Rape appealed the circuit court’s dismissal of his action alleging breach of contract and various tort claims against the Poarch Band of Creek Indians ("the Tribe”), PCI Gaming Authority, Creek Indian Enterprises, LLC, and Creek Casino Montgomery ("Wind Creek Casino" or "Wind Creek") (collectively, "the tribal defendants") and casino employees James Ingram and Lorenzo Teague and fictitiously named defendants. Rape and his wife visited Wind Creek Casino one evening in 2010. Rape placed a five-dollar bet at a slot machine, and managed to win the jackpot totaling $1,377,015.30. The screen displayed a prompt to "call an attendant to verify winnings." Rape alleged that at that point he was approached and congratulated by casino employees and patrons and that one casino employee said to him: "[D]on't let them cheat you out of it." Rape alleged that the machine printed out a ticket containing the winning amount of $1,377,015.30 but that casino representatives took possession of the ticket and refused to return it to him. Rape alleged that he was made to wait into the early morning hours with no information provided to him, even though he saw several individuals entering and leaving the room, presumably to discuss the situation. In his complaint, Rape stated that he "was taken into a small room in the rear of [Wind Creek Casino] by casino and/or tribal officials, where he was told, in a threatening and intimidating manner, that the machine in question 'malfunctioned,' and that [Rape] did not win the jackpot of $1,377,015.30. [Rape] was given a copy of an 'incident report,' and left [Wind Creek Casino] empty-handed approximately 24 hours after winning the jackpot." Rape sued the defendants alleging breach of contract; unjust enrichment; misrepresentation; suppression; civil conspiracy; negligence and/or wantonness; negligent hiring, training, and/or supervision; respondeat superior; and spoliation of evidence. For each claim, Rape requested damages in the amount of the jackpot he had allegedly won. The Alabama Supreme Court affirmed the trial court’s dismissal: “[o]n the one hand, if the dispute here arises from activity determined to be ‘permitted by Federal law’ and thus to be the subject of a congressional delegation of ‘regulatory authority’ to the Tribe, then disputes arising out of the same would . . .likewise be a legitimate adjudicative matter for the Tribe, and the circuit court's dismissal of Rape's claims would have been proper on that basis. But conversely, even if it were to be determined that the gaming at issue were illegal under the provisions of IGRA and therefore not the subject of an ‘express congressional delegation’ of regulatory authority to the Tribe, it would be that very illegality that would also prevent our state courts from providing relief to Rape. . . .Under the unique circumstances of this case, therefore, there is no analytical path to an award of relief for Rape.” View "Rape v. Poarch Band of Creek Indians, et al." on Justia Law

Macon County Greyhound Park, Inc., d/b/a Victoryland ("MCGP"), appealed trial court orders denying its motions to compel arbitration in the actions filed against it by plaintiffs Marie Hoffman, Sandra R. Howard, and Dianne Slayton. In 2008, Hoffman hit a $110,000 jackpot on an electronic bingo machine at Victoryland. A technician cleared the machine and told her the jackpot had been caused by a malfunction in the machine. She kept playing, hit another $110,000 jackpot, only to be told again that the jackpot was due to machine error. Hoffman sued. Howard did not win any jackpots when she visited “Quincy’s 777.” She noted that MCGP employees escorted the Birmingham mayor to specific electronic-bingo machines, and that he hit several jackpots while patronizing “Quincy’s 777.” In Slayton’s suit, she alleged she won a $50,000 jackpot playing an electronic bingo machine, but shortly after MCGP employees inspected her identity documents (her Social Security Card and other identification), the machine was found to have malfunctioned. In each of these three cases, MCGP filed motions to compel binding arbitration and to dismiss the proceedings, arguing that each case involved a contract involving interstate commerce that included a written arbitration agreement. Because the "contracts" containing the arbitration provisions in these cases were based on gambling consideration, they were based solely on criminal conduct, and were therefore void. Consequently, the provisions of those "contracts," including the arbitration provisions, were void and unenforceable. Therefore, the Supreme Court concluded the trial court properly denied the motions to compel arbitration and to dismiss these cases. View "Macon County Greyhound Park, Inc. v. Hoffman" on Justia Law

The State appealed a Circuit Court's judgment denying its petition for forfeiture of certain electronic-gambling devices and records of Greenetrack, Inc., naming as respondents 825 Electronic Gambling Devices, Greenetrack, Inc., Bally Gaming, Inc., Cadillac Jack, Inc., and International Game Technology, Inc. ("IGT"). “In Alabama v. $223,405.86,” the Supreme Court emphasized, and reaffirmed by virtue of this opinion: “There is no longer any room for uncertainty, nor justification for continuing dispute, as to the meaning of [the term 'bingo']. And certainly the need for any further expenditure of judicial resources, including the resources of this Court, to examine this issue is at an end. All that is left is for the law of this State to be enforced." The circuit court's judgment was reversed, and a judgment rendered in favor of the State so that the seized equipment and records were forfeited to the State. View "Alabama v. 825 Electronic Gambling Devices et al." on Justia Law

The State of Alabama appealed circuit court orders dismissing the State's petition for forfeiture of certain electronic-gambling devices and related records and currency located at VictoryLand casino (appeal no. 1141044). In 2013, the Alabama Supreme Court issued a writ of mandamus ordering Circuit Judge Tom Young, Jr. to issue a search warrant "as to certain allegedly illegal gambling devices and related items" at the VictoryLand casino in Shorter. During the search, the State seized 1,615 gambling machines, $263,105.81 in currency, and related servers, terminals, and other equipment. Shortly thereafter, the State filed the forfeiture petitions at issue here. The Supreme Court, in response to a petition by the State, issued a writ of mandamus disqualifying Judge Young from presiding over the forfeiture proceeding. All the other eligible judges in the Fifth Judicial Circuit voluntarily recused themselves. Montgomery Circuit Judge William Shashy was appointed to preside over the case. Judge Shashy conducted a four-day bench trial. The State argued the machines seized were illegal gambling devices. Witnesses for KC Economic Development, LLC (KCED) testified that the intent of the voters who in 2003 ratified Macon County's "bingo amendment" was to legalize the very types of devices that had been seized. Nine months later, Judge Shashy entered an order dismissing the forfeiture action on equal-protection grounds, on the basis that the State tolerated at other locations in Alabama the operation of casinos that used the same type machines at issue in this forfeiture case. The order did not address the issue of the legality of the machines. KCED filed a postjudgment motion requesting that the trial court specifically find that the intent of the voters in approving Amendment No. 744 was to authorize the use in Macon County of electronic-gambling machines like those allegedly available at other locations in the State. KCED additionally requested that the trial court order that all the seized property be returned. The State disagreed that it had selectively enforced Alabama's gambling laws and contended that the equal-protection rationale was legally untenable. After a hearing, Judge Shashy issued an order that provided the findings of fact sought by KCED, and repeated his finding from his earlier order that the State was "cherry picking which facilities should remain open or closed" and thus was "not enforcing the law equally." Judge Shashy then entered a conditional order for return of the seized property. The State appealed. The Supreme Court concluded that the devices at issue here were not "bingo" machines, and therefore the "bingo amendment" as grounds for return of the machines was invalid. The Court reversed both circuit court orders and rendered a judgment for the State in appeal no. 1141044. The Court dismissed KCED's cross-appeal in appeal no. 1150027. View "KC Economic Development, LLC v. Alabama" on Justia Law