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Michael Stephens - Self-Exclusion, Responsible Gambling and the Courts
Mr. Michael Stephens

Self-Exclusion, Responsible Gambling and the Courts:
A Discussion of Self-Exclusion and Prior Judicial Decisions
Concerning Casino Gaming.


Ms. Constance Ladell
Moderator
Self Exclusion, Responsible Gambling And The
Courts: A Discussion of Self-Exclusion and Prior
               Judicial Decisions
          Concerning Casino Gaming
                 January 2013
            K. Michael Stephens and
                Kimberley Knapp
           Hunter Litigation Chambers
                Law Corporation
Overview
Overview: Part I
• Around the world, casino operators
  have been the subject of legal
  proceedings in connection with
  gambling activity (both within the
  self-exclusion context and beyond)
Overview: Part II
• Survey existing body of case law from
  those jurisdictions (Australia, Great
  Britain, the U.S., and Canada), and
  highlight key aspects of those cases
Australia
Australia
• Courts in Australia have generally
  found that casino operators owe no
  duty of care to protect problem
  gamblers against economic losses
Reynolds v. Katoomba RSL All Services
    Club Limited, [2001] NSWCA 234
In rejecting Mr. Reynolds’ claim and dismissing his
appeal, Chief Justice Spigelman stated:
“…Save in an extraordinary case, economic loss occasioned
by gambling should not be accepted to be a form of loss for
which the law permits recovery. I make allowances for an
extraordinary case, without at the present time being able
to conceive of any such case…”
Foroughi v. Star City Pty Limited,
             [2007] FCA 1503
• Dismissed claim by plaintiff for economic losses arising after
  he had self-excluded from casino
• Self-exclusion form contained a provision by which plaintiff
  acknowledged that it was his responsibility not to enter or
  gamble within the casino
• Court held that there was nothing in the Casino Control Act to
  support a private right of action additional to the obligations
  imposed upon casino operators
• The Court also rejected the claims of misleading or deceptive
  and unconscionable conduct under the Trade Practices Act
Kakavas v Crown Limited & Anor,
            [2007] VSC 526
• Gambler sought in damages from Casino
  claiming unconscionable conduct, deceptive
  and misleading conduct, negligence and
  restitution
• Several of plaintiff’s claims did not survive
  motion to strike
Kakavas v Crown Melbourne Limited &
         Ors, [2009] VSC 559
• Court dismissed Mr. Kakavas’ claim
• Decision was affirmed on appeal, but leave
  has been granted for further appeal to the
  High Court of Australia
Great Britain
Great Britain
• Great Britain has produced a leading
  decision in the area of self-exclusion
  litigation
Calvert v. William Hill Credit Ltd.
[2008] EWHC 454 (Ch Div); affirmed on appeal
          [2009] 2 W.L.R. 1065 (CA)
Justice Briggs began by noting that it was the first
time an English court had been required to
consider the question:
 “...whether a bookmaker who has, at the customer's
 request, undertaken to prohibit the customer from
 gambling for a specified period, owes the customer a duty
 to take reasonable care to enforce that prohibition, so as
 to protect the problem gambler from the risk of gambling
 losses during the specified period”
Calvert (continued)
• At trial, plaintiff was found to be a pathological
  gambler
• Justice Briggs rejected the existence of a broad duty
  of care to problem gamblers generally
• Justice Briggs accepted a duty of care to enforce the
  prohibition on gambling that it had given at
  plaintiff’s request
• Nevertheless, he dismissed the action on the ground
  that the breach did not cause plaintiff’s financial
  losses
Calvert (continued)
• Justice Briggs was satisfied that Plaintiff’s gambling
  disorder was so compulsive, and that the other
  gambling opportunities available to him were so
  extensive, that defendant’s negligence contributed
  to his losses only by accelerating what would
  probably have occurred in any event
• The decision of Justice Briggs was affirmed on
  appeal solely on the basis of lack of causation
The United States
The United States
• New Jersey and Indiana have been a
  source of litigation involving self-excluded
  and compulsive gamblers
I/M/O Petition of S.D. for Removal from the
  Voluntary Self-Exclusion List, 943 A.2d 188
  (N.J.Super.A.D. 2008), 399 N.J. Super. 107,
           2008 N.J. Super. LEXIS 65
• A gambler who had placed himself on the
   Casino Control Commission’s lifetime self-
   exclusion list petitioned to have himself
   removed from the list after he had learned
   that out-of-state casinos affiliated with the
   state casinos would also exclude him from
   their gaming facilities
I/M/O Petition of S.D. for Removal from the
    Voluntary Self-Exclusion List (continued)
The Court upheld the Commission’s decision to
deny the gambler’s petition for removal, finding
ample basis for the decision in fact, law and public
policy. In doing so, the Court noted:
    In essence, self-exclusion is designed as a means to help
    problem gamblers help themselves; it places responsibility
    squarely on self-excluded persons themselves to refrain
    from prohibited activities, albeit with the assistance and
    cooperation of the casinos. …
Taveras v. Resorts International Hotel,
   Inc., et al, 2008 U.S. Dist. LEXIS 71670
• Plaintiff brought an action against six New Jersey casinos
  alleging, among other things, that the casinos had breached
  their duty of care and contractual obligations to her, that they
  were strictly liable in respect of the “abnormally dangerous
  activity” of gambling, and that they had intentionally inflicted
  emotional distress - after having received notice that she was
  a compulsive gambler
• Court dismissed the action
• The Court declined to find any outrageous or extreme
  conduct necessary for the intentional infliction claim
Merrill v. Trump Indiana, Inc.,
            320 F.3d 729 (7th Cir. 2003)
• A compulsive gambler, alleged that the riverboat casino failed to prevent
  him from gambling after he had asked to be evicted from the casino if he
  entered
• Federal Court of Appeals held that there was no statutory or common law
  duty of care
• The Court concluded that neither the Indiana gaming statute, nor
  regulations, imposed a duty upon the casino to eject a gambler who
  requested to be placed on the casino’s eviction list – at most, it imposed a
  duty upon the casino operator to the State through the Indiana Gaming
  Commission – not to the individual gambler
Stulajter v Harrah’s Indiana Corp.,
    808 N.E.2d 746 (Ind.App. 2004)
• Self-exclusion context
• Court finds gaming statutes and regulations
  did not create a private cause of action
  against casino operator
Ceasars Riverboat Casino, LLC v Kephart,
    903 N.E. 2d 117 (Ind.App. 2009),
        2009 Ind. App. LEXIS 514
• Casino brought an action against a
  compulsive gambler after her cheques
  were not honoured; the gambler
  counterclaimed alleging that the casino
  took advantage of her known pathological
  gambling condition to unjustly enrich itself
• The trial court denied the casino’s motion
  to dismiss the counterclaim
Ceasars Riverboat Casino, LLC v Kephart,943
N.E.2d 1120 (Ind. 2010), 2010 Ind. LEXIS 560
• On appeal to the Supreme Court of Indiana, the majority of
  the court found it unnecessary to decide whether casino
  operators had a common law duty to refrain from attempting
  to entice or contact gamblers that it knew or should have
  known were compulsive gamblers, holding instead that the
  legislature had by implication abrogated any common law
  claim that casino patrons might otherwise have against
  casinos for damages resulting from enticing patrons to
  gamble and lose money at casino establishments
Ceasars (continued)
• “In this case, not only does the statutory scheme
  cover the entire subject of riverboat gambling, but
  the statutory scheme and Kephart’s common law
  claim are so incompatible that they cannot both
  occupy the same space. …”
• “The legislature did not require casinos to identify
  and refuse service to pathological gamblers who
  did not self-identify. Kephart’s claim directly
  conflicts with the legislature’s choice.”
Canada
Canada
•   Legal landscape in Canada is still in
    development
•   A number of cases involving self-excluded
    gamblers are working their way through the
    Canadian courts
•   To date, to our knowledge there has been no
    decision on the full merits of a claim by a self-
    excluded gambler, although some preliminary
    decisions have been issued
Edmonds v Laplante,
          [2005] OJ No 6454 (SCJ)
• Not directly involving self-exclusion or
  compulsive gambling litigation
• Plaintiff alleged, and the Court accepted,
  that the Gaming Corporation owed him a
  duty of care to implement non-negligently
  the policy that it had undertaken in respect
  of “insider-win investigations”
Dennis v Ontario Lottery and Gaming
Corporation, 2010 ONSC 1332, 101 OR (3d) 23,
aff’d 2011 ONSC 7024, 344 DLR (4th) 65 (Div Ct)
 • Self-exclusion case
 • Court considered a motion for certification in
   proposed class proceedings in Ontario
 • The claim alleged negligence, occupiers’ liability
   and breach of contract, and sought damages or
   disgorgement of profits derived by OLGC from
   class members
Dennis (continued)
• Justice Cullity’s discussion of the plaintiff’s claims
  involves a preliminary assessment of whether a
  cause of action has been pleaded. It is not a
  consideration or determination on the merits of the
  case
• On the negligence claim, Justice Cullity held that the
  plaintiff should be permitted to have the duty of care
  tried on the basis of evidence without being “driven
  from the judgment seat” at the preliminary stage
Dennis (continued)
• Justice Cullity allowed the claim in occupier’s
  liability to stand until a trial on the basis of the
  sufficiency of the pleadings
• The decision of Justice Cullity denying
  certification affirmed on appeal to the
  Divisional Court, but leave for further appeal to
  the Ontario Court of Appeal has been granted
Haghdust v British Columbia Lottery
    Corporation, 2013 BCSC 16
• Jackpot entitlement rule self-exclusion
  program
• Plaintiffs applied to have their actions
  consolidated and certified as a class
  proceeding
• The certification was granted by BC
  Supreme Court
Burrell v Metropolitan Entertainment
         Group, 2010 NSSC 476,
          aff’d 2011 NSCA 108
Court summarily dismissed the plaintiff’s
action against the Nova Scotia Gaming
Corporation, the Attorney General and the
casino operator, alleging a duty of care to
ensure appropriate steps were taken to
prevent plaintiff’s gambling
Burrell (continued)
In declining to find a duty of care under
common law, the Court noted the absence
of cases in Canada and the rejection of
such a broad duty in Australia, the United
Kingdom, and the United States
Burrell (continued)
The decision was upheld on appeal to the
Nova Scotia Court of Appeal:
“Mr. Burrell’s losses precede his request for exclusion and the
prohibition notice under the Protection of Property Act. His
claim asserts the existence of the broad duty of care that was
rejected in Calvert, was not considered in Dennis, and is
unsupported by the Australian and American cases. Mr. Burrell
cites no authority that has accepted a duty of care to problem
gamblers who have neither self-excluded nor been lured by
individually targeted promotion.”
• Other cases before courts
HUNTER LITIGATION CHAMBERS
Law Corporation
Suite 2100
1040 West Georgia Street
Vancouver, British Columbia V6E 4H1
Phone:     604-891-2400
Fax: 604-647-4554
Website: http://www.litigationchambers.com
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Michael Stephens - Self-Exclusion, Responsible Gambling and the Courts

  • 2. Mr. Michael Stephens Self-Exclusion, Responsible Gambling and the Courts: A Discussion of Self-Exclusion and Prior Judicial Decisions Concerning Casino Gaming. Ms. Constance Ladell Moderator
  • 3. Self Exclusion, Responsible Gambling And The Courts: A Discussion of Self-Exclusion and Prior Judicial Decisions Concerning Casino Gaming January 2013 K. Michael Stephens and Kimberley Knapp Hunter Litigation Chambers Law Corporation
  • 5. Overview: Part I • Around the world, casino operators have been the subject of legal proceedings in connection with gambling activity (both within the self-exclusion context and beyond)
  • 6. Overview: Part II • Survey existing body of case law from those jurisdictions (Australia, Great Britain, the U.S., and Canada), and highlight key aspects of those cases
  • 8. Australia • Courts in Australia have generally found that casino operators owe no duty of care to protect problem gamblers against economic losses
  • 9. Reynolds v. Katoomba RSL All Services Club Limited, [2001] NSWCA 234 In rejecting Mr. Reynolds’ claim and dismissing his appeal, Chief Justice Spigelman stated: “…Save in an extraordinary case, economic loss occasioned by gambling should not be accepted to be a form of loss for which the law permits recovery. I make allowances for an extraordinary case, without at the present time being able to conceive of any such case…”
  • 10. Foroughi v. Star City Pty Limited, [2007] FCA 1503 • Dismissed claim by plaintiff for economic losses arising after he had self-excluded from casino • Self-exclusion form contained a provision by which plaintiff acknowledged that it was his responsibility not to enter or gamble within the casino • Court held that there was nothing in the Casino Control Act to support a private right of action additional to the obligations imposed upon casino operators • The Court also rejected the claims of misleading or deceptive and unconscionable conduct under the Trade Practices Act
  • 11. Kakavas v Crown Limited & Anor, [2007] VSC 526 • Gambler sought in damages from Casino claiming unconscionable conduct, deceptive and misleading conduct, negligence and restitution • Several of plaintiff’s claims did not survive motion to strike
  • 12. Kakavas v Crown Melbourne Limited & Ors, [2009] VSC 559 • Court dismissed Mr. Kakavas’ claim • Decision was affirmed on appeal, but leave has been granted for further appeal to the High Court of Australia
  • 14. Great Britain • Great Britain has produced a leading decision in the area of self-exclusion litigation
  • 15. Calvert v. William Hill Credit Ltd. [2008] EWHC 454 (Ch Div); affirmed on appeal [2009] 2 W.L.R. 1065 (CA) Justice Briggs began by noting that it was the first time an English court had been required to consider the question: “...whether a bookmaker who has, at the customer's request, undertaken to prohibit the customer from gambling for a specified period, owes the customer a duty to take reasonable care to enforce that prohibition, so as to protect the problem gambler from the risk of gambling losses during the specified period”
  • 16. Calvert (continued) • At trial, plaintiff was found to be a pathological gambler • Justice Briggs rejected the existence of a broad duty of care to problem gamblers generally • Justice Briggs accepted a duty of care to enforce the prohibition on gambling that it had given at plaintiff’s request • Nevertheless, he dismissed the action on the ground that the breach did not cause plaintiff’s financial losses
  • 17. Calvert (continued) • Justice Briggs was satisfied that Plaintiff’s gambling disorder was so compulsive, and that the other gambling opportunities available to him were so extensive, that defendant’s negligence contributed to his losses only by accelerating what would probably have occurred in any event • The decision of Justice Briggs was affirmed on appeal solely on the basis of lack of causation
  • 19. The United States • New Jersey and Indiana have been a source of litigation involving self-excluded and compulsive gamblers
  • 20. I/M/O Petition of S.D. for Removal from the Voluntary Self-Exclusion List, 943 A.2d 188 (N.J.Super.A.D. 2008), 399 N.J. Super. 107, 2008 N.J. Super. LEXIS 65 • A gambler who had placed himself on the Casino Control Commission’s lifetime self- exclusion list petitioned to have himself removed from the list after he had learned that out-of-state casinos affiliated with the state casinos would also exclude him from their gaming facilities
  • 21. I/M/O Petition of S.D. for Removal from the Voluntary Self-Exclusion List (continued) The Court upheld the Commission’s decision to deny the gambler’s petition for removal, finding ample basis for the decision in fact, law and public policy. In doing so, the Court noted: In essence, self-exclusion is designed as a means to help problem gamblers help themselves; it places responsibility squarely on self-excluded persons themselves to refrain from prohibited activities, albeit with the assistance and cooperation of the casinos. …
  • 22. Taveras v. Resorts International Hotel, Inc., et al, 2008 U.S. Dist. LEXIS 71670 • Plaintiff brought an action against six New Jersey casinos alleging, among other things, that the casinos had breached their duty of care and contractual obligations to her, that they were strictly liable in respect of the “abnormally dangerous activity” of gambling, and that they had intentionally inflicted emotional distress - after having received notice that she was a compulsive gambler • Court dismissed the action • The Court declined to find any outrageous or extreme conduct necessary for the intentional infliction claim
  • 23. Merrill v. Trump Indiana, Inc., 320 F.3d 729 (7th Cir. 2003) • A compulsive gambler, alleged that the riverboat casino failed to prevent him from gambling after he had asked to be evicted from the casino if he entered • Federal Court of Appeals held that there was no statutory or common law duty of care • The Court concluded that neither the Indiana gaming statute, nor regulations, imposed a duty upon the casino to eject a gambler who requested to be placed on the casino’s eviction list – at most, it imposed a duty upon the casino operator to the State through the Indiana Gaming Commission – not to the individual gambler
  • 24. Stulajter v Harrah’s Indiana Corp., 808 N.E.2d 746 (Ind.App. 2004) • Self-exclusion context • Court finds gaming statutes and regulations did not create a private cause of action against casino operator
  • 25. Ceasars Riverboat Casino, LLC v Kephart, 903 N.E. 2d 117 (Ind.App. 2009), 2009 Ind. App. LEXIS 514 • Casino brought an action against a compulsive gambler after her cheques were not honoured; the gambler counterclaimed alleging that the casino took advantage of her known pathological gambling condition to unjustly enrich itself • The trial court denied the casino’s motion to dismiss the counterclaim
  • 26. Ceasars Riverboat Casino, LLC v Kephart,943 N.E.2d 1120 (Ind. 2010), 2010 Ind. LEXIS 560 • On appeal to the Supreme Court of Indiana, the majority of the court found it unnecessary to decide whether casino operators had a common law duty to refrain from attempting to entice or contact gamblers that it knew or should have known were compulsive gamblers, holding instead that the legislature had by implication abrogated any common law claim that casino patrons might otherwise have against casinos for damages resulting from enticing patrons to gamble and lose money at casino establishments
  • 27. Ceasars (continued) • “In this case, not only does the statutory scheme cover the entire subject of riverboat gambling, but the statutory scheme and Kephart’s common law claim are so incompatible that they cannot both occupy the same space. …” • “The legislature did not require casinos to identify and refuse service to pathological gamblers who did not self-identify. Kephart’s claim directly conflicts with the legislature’s choice.”
  • 29. Canada • Legal landscape in Canada is still in development • A number of cases involving self-excluded gamblers are working their way through the Canadian courts • To date, to our knowledge there has been no decision on the full merits of a claim by a self- excluded gambler, although some preliminary decisions have been issued
  • 30. Edmonds v Laplante, [2005] OJ No 6454 (SCJ) • Not directly involving self-exclusion or compulsive gambling litigation • Plaintiff alleged, and the Court accepted, that the Gaming Corporation owed him a duty of care to implement non-negligently the policy that it had undertaken in respect of “insider-win investigations”
  • 31. Dennis v Ontario Lottery and Gaming Corporation, 2010 ONSC 1332, 101 OR (3d) 23, aff’d 2011 ONSC 7024, 344 DLR (4th) 65 (Div Ct) • Self-exclusion case • Court considered a motion for certification in proposed class proceedings in Ontario • The claim alleged negligence, occupiers’ liability and breach of contract, and sought damages or disgorgement of profits derived by OLGC from class members
  • 32. Dennis (continued) • Justice Cullity’s discussion of the plaintiff’s claims involves a preliminary assessment of whether a cause of action has been pleaded. It is not a consideration or determination on the merits of the case • On the negligence claim, Justice Cullity held that the plaintiff should be permitted to have the duty of care tried on the basis of evidence without being “driven from the judgment seat” at the preliminary stage
  • 33. Dennis (continued) • Justice Cullity allowed the claim in occupier’s liability to stand until a trial on the basis of the sufficiency of the pleadings • The decision of Justice Cullity denying certification affirmed on appeal to the Divisional Court, but leave for further appeal to the Ontario Court of Appeal has been granted
  • 34. Haghdust v British Columbia Lottery Corporation, 2013 BCSC 16 • Jackpot entitlement rule self-exclusion program • Plaintiffs applied to have their actions consolidated and certified as a class proceeding • The certification was granted by BC Supreme Court
  • 35. Burrell v Metropolitan Entertainment Group, 2010 NSSC 476, aff’d 2011 NSCA 108 Court summarily dismissed the plaintiff’s action against the Nova Scotia Gaming Corporation, the Attorney General and the casino operator, alleging a duty of care to ensure appropriate steps were taken to prevent plaintiff’s gambling
  • 36. Burrell (continued) In declining to find a duty of care under common law, the Court noted the absence of cases in Canada and the rejection of such a broad duty in Australia, the United Kingdom, and the United States
  • 37. Burrell (continued) The decision was upheld on appeal to the Nova Scotia Court of Appeal: “Mr. Burrell’s losses precede his request for exclusion and the prohibition notice under the Protection of Property Act. His claim asserts the existence of the broad duty of care that was rejected in Calvert, was not considered in Dennis, and is unsupported by the Australian and American cases. Mr. Burrell cites no authority that has accepted a duty of care to problem gamblers who have neither self-excluded nor been lured by individually targeted promotion.”
  • 38. • Other cases before courts
  • 39. HUNTER LITIGATION CHAMBERS Law Corporation Suite 2100 1040 West Georgia Street Vancouver, British Columbia V6E 4H1 Phone: 604-891-2400 Fax: 604-647-4554 Website: http://www.litigationchambers.com
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