“The Devil Made Me Bet It” – the Third Circuit Considers Arguments in Bettor’s Case Against Casino

By: Abbey Block

Can a casino be held liable for encouraging its patrons to gamble, particularly when those patrons exhibit signs of problem gambling?

That is the question the Third Circuit Court of Appeals was left to contemplate following oral arguments in the case of Antar v. The Borgata Hotel Casino and Spa, LLC et al., which took place last week.[1] The plaintiff in the case, Sam Antar, alleges that employees of the Defendants’ casino induced him to gamble more than $30 million through a series of more than 100,000 online bets – despite the fact that he exhibited clear signs of a compulsive gambling problem.

Specifically, the Plaintiff alleges that after he was invited to be a “VIP” of the casino, two “VIP Account Managers” engaged in a campaign of “active and aggressive enticement” through which they bombarded him with “near-daily, personal and real-time text messages” intended to “squeeze[] as much money from [the plaintiff]” as possible.  The Plaintiff contends that these employees of the casino were trained, pursuant to New Jersey law, to recognize the signs of problem gambling, but nevertheless, relentlessly offered him financial bonuses, deposit incentives, and credits to induce him to keep gambling.

The Plaintiff’s Complaint asserts two bases upon which he is entitled to recover damages from the casino: first, a violation of the New Jersey Consumer Fraud Act (“CFA”) which prohibits businesses from engaging in unconscionable and deceiving commercial practices; and second, a common law negligence claim– i.e., that the casino breached its duty of care by using its product and engaging in a business practice that it knew or should have known was causing harm to the Plaintiff.

Unfortunately for the Plaintiff, the District Court for District of New Jersey disagreed with his theories of liability and dismissed the case in its entirety on January 31, 2024. The District Court based its dismissal on two principles.

The first focused on the interplay between the CFA and the Casino Control Act (“CCA”). The Court concluded that the Plaintiff’s CFA claim was preempted by the CCA, which strictly regulates the state’s casino industry, and, therefore, was precluded from recovering under the CFA. In reaching this conclusion, the Court explained that the Plaintiff’s claims involved highly technical aspects of gambling, the resolution of which required agency expertise, and fit within the conduct and issues addressed and regulated by the CCA.

Second, the Court dismissed the Plaintiff’s negligence claim, explaining that the Supreme Court of New Jersey had already conclusively decided that casinos do not owe a common law duty of care to their patrons. Thus, notwithstanding society’s recognition that problem gambling is a legitimate medical condition, casinos remain under no obligation to prevent or avoid inducing their patrons to gamble, even when those patrons exhibit compulsive behavior.

Dissatisfied with this result, the Plaintiff appealed the dismissal to the Third Circuit Court of Appeals, which heard oral argument from the parties last week.

During the oral argument the panel of judges appeared highly skeptical of the Plaintiff’s position and bombarded counsel with a host of practical questions regarding issues of causation and the calculation of damages.

Specifically, the Court voiced its concern as to how it could ascertain the precise amount of loss attributable to the Defendants’ allegedly unconscionable business practices – a requisite element of both the CFA and negligence claim. Put simply, how could the Court calculate the amount of money gambled that was attributable to the Defendants’ communications with the Plaintiff, versus the amount of money that the Plaintiff would have gambled and lost even if he had not received the enticements from the Defendants?

Without providing a specific answer, Plaintiff’s counsel argued that the casino’s receipt of grand jury and SEC subpoenas for the Plaintiff’s gambling records should qualify as a  “bright-line” date from which the damages could be calculated. After receiving those subpoenas, he argued, the casino was on notice that the Plaintiff was engaging in problematic gambling behavior and, therefore, should have ceased all communications with him. Although those damages could not be calculated with precision at the current juncture, according to Plaintiff’s counsel they could ultimately be determined through expert review and analysis of the substantial quantities of data collected by the Defendants.

The Court also took issue with the basis of the Plaintiff’s CFA claim, questioning whether the representations made by the Defendants were in fact deceptive and misleading – prerequisites to recovery under the statute. As noted by the Court, the Plaintiff was not misled about what he could receive as benefits and incentives from the casino and, in fact, received exactly what he bargained for.

Plaintiff’s counsel acknowledged that the representations of the casino were neither deceptive nor misleading in the traditional sense, and instead asserted the Plaintiff was misled to “destroy his life,” – an argument that was seemingly and quickly rejected by the Court. Indeed, one of the judges noted that the Plaintiff had failed to provide any dictionary definition, case law, or data to support the argument that the phrase “mislead or deceive” was broad enough to encompass the Plaintiff’s theory of liability.

Defendants’ counsel faced a friendlier bench and capitalized on the perceived uncertainties of the Plaintiff’s case – i.e., the inability to precisely calculate the Plaintiff’s damages; the inability to establish a causal connection between the Defendants’ communications and the Plaintiff’s alleged damages; and the issue of whether Defendants’ representations were truly “misleading or deceptive.”

The defense argument also zeroed in on the Plaintiff’s characterization of the Defendants’ alleged conduct and argued that it remained unclear as to what conduct qualified as the negligent act at the issue in the case. Notwithstanding the confusion on this point, the Defense also argued that New Jersey courts have never imposed a duty upon casinos to identify problem gamblers or stop them from gambling.

This case highlights the delicate balance between the courts’ and New Jersey regulators’ interests and authority to regulate the conduct of gaming providers in the state. On the one hand, it seems important for consumers to have an avenue through which they can obtain redress for their injuries, if those injuries are caused by the negligence or unconscionable practices of a business. On the other hand, the regulatory scheme  in New Jersey was created to provide a specialized framework to govern the activities of casinos and their employees. It follows that those in charge of the DGE and the New Jersey Casino Control Commission possess specialized training and experience that make them more qualified to address these types of disputes than judges and attorneys.

It seems likely that the Defendants’ arguments will carry the day, given that New Jersey case law is devoid of jurisprudence requiring casinos to prevent problem gamblers from gambling. Indeed, several courts have reached the opposite conclusion – explicitly declining to impose any such duty.

By way of example, in one case brought against Harrah’s Casino, the court rejected a customer’s argument that the casino should have denied him a line of credit, given that he exhibited signs of  compulsive gambling.[2]  The court explained that imposing such a duty would be antithetical to the relationship between the casino and customer, which was “built on enabling gaming, not withholding it.”[3] Similarly, in another case, the District Court for the District of New Jersey opined that the “great weight of authority supports” the position that “common-law tort principles do not require casinos to rescue compulsive gamblers from themselves.”[4] These cases, and the arguments at the oral argument, further highlight the push and pull between (1) the state’s interest in protecting consumers; and (2) the state’s interest in promoting its economic development through a robust and well-regulated gambling industry.

The Plaintiff’s theory of liability can be (and has been) analogized to “dram shop liability” under which bars and “social hosts” can be sued for certain injuries that result when a patron is overserved.  In essence, both the Plaintiff’s theory of negligence, and dram shop liability, impose a duty upon a commercial establishment in relation to its interactions with patrons, notwithstanding the patron’s free will to engage in potentially harmful conduct. However, there’s one big difference between “dram shop” liability and the Plaintiff’s theory of liability in this case – New Jersey has explicitly authorized dram shop liability under both common law and by statute.[5] As noted above, no analogous statutory or common law duty applies to casino owners and their employees. Indeed, in Hakimoglu v. Trump Taj Mahal Associates, the New Jersey District Court explicitly declined to extend dram shop liability to a casino which served alcohol to a visibly intoxicated patron for the gambling losses the patron suffered while intoxicated.[6]  Simply put, New Jersey has rejected the argument that casinos should be held liable for the gambling losses incurred by their patrons, even when the casino contributed, in some manner, to the patron’s resulting financial injury. This is yet another blow against the Plaintiff’s theory of liability.

It will likely be several weeks, if not months, before we learn the fate of Mr. Antar’s case against the casino. If the Plaintiff prevails, and his case is allowed to proceed, casinos may be forced to reevaluate their marketing practices, particularly with regard to their “VIP” programs and incentives. However, identifying and protecting “compulsive” gamblers (above and beyond the responsible gaming measures already implemented by casinos and gaming providers) is undeniably a challenging task that is dependent upon highly subjective criteria. Indeed, imposing a duty upon casinos to identify and stop compulsive gambling activity has been characterized by courts as akin to imposing a duty on shopping malls and credit card companies to identify and exclude compulsive shoppers.[7]  While protecting consumers is undoubtedly a noble and admirable goal, in practice, it implicates questions of consumer choice, free markets, and excessive government oversight.

Mr. Antar’s losses and behavior are extreme – a “whale” shedding $30 million would raise anybody’s eyebrows. But the extreme losses incurred by Mr. Antar should not be used to dictate policy for the rest of the casino industry – particularly when there is little basis in the state’s jurisprudence to do so.

[1] Case No. 24-1364 (3d Cir. 2024).

[2] Harrah’s Atl. City Op. Co. v. Dangelico, No. A-2158-17T3, 2019 WL 1869008, at *2 (N.J. Super. Ct. App. Div. Apr. 26, 2019).

[3] Id.

[4] Taveras v. Resorts Int’l Hotel, Inc., No. 07-4555, 2008, WL 4372791 (D.N.J. Sept. 19, 2008).

[5] N.J.S.A. 2A:22A-5; Lee v. Kiku Restaurant , 603 A.2d 503 (N.J. 1992).

[6] 876 F.Supp. 625, 632 (D.N.J. 1994).

[7] Taveras,  WL 4372791 at *4.