Casinos don't have a common law duty to protect compulsive gamblers from themselves, and aren't required to refrain from trying to entice those people into their establishments, the Indiana Court of Appeals ruled today in a matter of first impression.
In a 2-1 decision in Caesars Riverboat Casino v. Genevieve M. Kephart, No. 31A01-0711-CV-530, the majority decided that a Tennessee woman couldn't recover from a private negligence action against the southern Indiana riverboat casino she'd visited in March 2006. While at the casino that had enticed her with a free hotel room, drinks, and meals, Kephart lost in a single evening $125,000 that she had borrowed from the casino. Six counter checks were returned for insufficient funds and Caesars later sued to recover that money and treble damages. But Kephart filed a counter-claim alleging that Caesars took advantage of her condition as a pathological gambler, and that it shouldn't have offered her the enticements in the first place and was responsible for damaging her quality of life in order to unjustly enrich itself.
This decision reverses a ruling from Harrison Circuit Judge H. Lloyd Whitis, who'd denied Caesars' motion and appeals to dismiss the counter-claim based on its legal sufficiency. Judge Paul Mathias authored the 17-page majority opinion with a concurrence from Judge Carr Darden, while Judge Terry Crone wrote his own 11-page dissent.
The majority analogized this situation to that of a compulsive shopper, noting that department stores have no common law duty to refuse sales or services to someone known to be a compulsive shopper. Judges also found that marketing to potential patrons isn't reckless and that Kephart's own behavior and foreknowledge of possible risks in going to the casino to gamble tipped the balance in the casino's favor.
"While Caesar's actions in allowing her to write six checks totaling $125,000 are extremely concerning and should be examined.... Kephart has a responsibility to protect herself from her own proclivities and not rely on the casino to bear sole responsibility for her actions," the majority wrote. "One may argue that the statutory framework does not provide enough protections for compulsive gamblers, but that argument is more properly addressed to the (Indiana Gaming) Commission or to the General Assembly."
Judge Crone disagreed, writing in his own opinion that a common law duty should be imposed because of the casino's conduct in luring her to the casino with freebies. As it likely knew about her condition, the casino could have easily excluded Kephart from any direct marketing efforts and from the casino itself because of a statutory voluntary exclusion program described in Indiana Code Section 4-35-4-2, the judge determined. But the casino didn't do those things.
"One wonders if Indiana's legislators - and, more importantly, their constituents - have any qualms about balancing the State's budget on the backs of gamblers, especially those who are least able to resist and/or afford gambling," he wrote. "In my view, all three factors militate in favor of imposing a duty on Caesars to refrain from enticing to its casino known pathological gamblers who have not requested that they be removed from the casino's direct marketing list or excluded from the casino. To hold otherwise would be to conclude that there is no level below which a casino (and thus the State of Indiana) may not go in enticing patrons and encouraging their reckless behavior. I believe that Hoosiers would expect more from their government and the businesses that operate here."