Lawyers told ABC News that gamblers like Hoffman may have little legal recourse against Native American casinos, which sometimes operate beyond the reach of U.S. courts.
B.S. The casino is not out of reach of his state’s longarm statute or federal jurisdiction. There may be a fight over the rule of decision in federal court.
However, I do think that he’s only entitled to $2,500.00. It’s a contract. A gambling contract, sure, but in a place where gambling contracts are legal. When he put his nickel in the slot his expectation and the promise the casino made was that the most he would win was $2,500.00. That’s all he’s entitled to.
I agree that the “malfunction” disclaimer is BS. Total BS. The casino does not get the benefit of faulty equipment. It gets full liability which in this case is $2,500.00.
I’d be inclined to agree, if the disclaimer said “Maximum jackpot of $2,500, even if we’re a bunch of dumbasses who allow our machine to go haywire and tell you otherwise.” Barring that, I see no reason why an ambiguous disclaimer (most would read it merely as a warning that the machine will never register a jackpot above $2,500, not a “contractual” trick to void the jackpot if it does) should trump the machine’s statement as to how much the guy had won. Both statements are in writing, and the latter is more recent and more specific, so what makes the earlier, more general representation any more “contractual” than the later, more specific one?
One thing is clear, though: if the statement turns out to be correct that a state jury isn’t even allowed to reach the question, no one in his right mind should ever gamble on an Indian casino again. It’s in the interests of every other Indian casino in the country to make sure this doesn’t happen. Hell, it’s probably even in Sandia’s interests, if only they and their idiot savant (only without the “savant” part) of an attorney could see past their own noses.
What if the machine had said, “We’re serving your liver for dinner tonight. Please go the kitchen, take off your shirt and lie down on the table?” Contracts are what people agree to and reasonably expect to get.
If the Indians try to avoid jurisdiction and a remedy, they’ll likely be more screwed. They have been soliciting in his state and likely sending buses there to pick up customers. Let alone longarm state jurisdiction, he might have a federal cause of action under RICO if they try to play games (pun unintended).
If I sign a contract to purchase a property that says X, but the papers I sign at closing say Y, Y wins. Why should this be any different? The bit about serving your liver is a red herring, as the jackpot amount was no more or less reasonable than the disclaimer. Conversely, if the disclaimer really did trump all, then any jackpot in excess of $2,500 should be void in toto, as it is conclusive proof that the machine has malfunctioned. In which case, we’re back to my earlier suggestion that all gamblers wear a pin stating their own maximum losses, and see if the casinos agree to be bound by that.
Well, you’re stretching contract law which is agreement, meeting of minds and reasonable expectations of performance.
If I sign a contract to purchase a property that says X, but the papers I sign at closing say Y, Y wins.
Nope. A deed conveys no title until delivered. I can draft a warranty deed giving you title to Y and it would be meaningless until I gave it to you. I can tear it up and draft a new one giving you title to X. There’s no delivery of the $1.6 mil here or there would not be this discussion.
Gamblers agree to their maximum losses when they take their money out of their pocket and put it on the table.
On the malfuntioning machine, the man put his money in and the casino expected to take it. The malfunction is not his fault and the casino implicitly agreed to give the maximum amount it agreed to pay just as it agreed to take the maximum amount he was willing to put in the machine.
I know we’re in the cyber-age but just power do we want to give to machines to make binding contracts?
I can draft a warranty deed giving you title to Y and it would be meaningless until I gave it to you. I can tear it up and draft a new one giving you title to X.
If I signed for Y and you tore that deed up and gave me X, what do you think I would do?
I will have to look at this more carefully, but my first-look reaction is this:
The notice “Malfunction voids all pays and plays” is put there by the slot manufacturer, not the casino. I know this because I program slots for a living.
That said, I don’t know how this affects this particular issue.
McGehee #6, even if X was talking about novation which my previous comment presumed he was not, both parties have to agree. If Buyer and Seller sign a contract for X and seller’s lawyer mixes up his files and takes the closing package for Y to the closing, any time before the closing is completed he can correct his mistake. If he does not, well that’s a very interesting case. Here, we don’t even have a lawyer. We have a machine supposedly rewriting the contract between the parties.
I don’t gamble much at all, but I don’t gamble at all at Indian Casinos for exactly the reason described in the article. There was a story a while back about a woman getting injured at an Indian Casino and basically getting the HAHAHAHA you can’t sue us treatment. Personally, I avoid places that are trying to screw me. (Casino’s generally) Doubly so, places that are trying to screw me and leave me with little to no recourse.
To what extent is the casino responsible for a machine with faulty software?
Bear in mind that the software has been tested extensively by manufacturer and the Gaming Control Board of the casino’s jurisdiction before it’s approved for use on any casino floor. Also, there’s nothing a casino can do to make software go bad. So, this is a bug that wasn’t tested and wasn’t caught.
So, if the machine’s software really did contain a bug that caused the malfunction, is the casino liable at all? Forget for a moment that this is an Indian casino, in what states would a casino be held responsible?
For good public relations, this casino should pay this man the money. Having worked in an indian casino in Oklahoma, anytime there is a malfunction and the casino pays a person, malfunction or otherwise, the casino is refunded by the vendor.
One million dollars is nothing to these casinos, Cherokee Casino in Tulsa takes in over six million on any given Friday night. One million is peanuts.
In addition since the man was congratulated by employees of the casino they have all but admittted “HE WON” and pictures are always taken by customers that win if not by the staff.
Furthermore, tribes fall under federal, but are regulated by state gaming commissions.
Comment by David Nixon — October 27, 2007 @ 7:49 am
We’re talking about liability as between the customer and the casino. The casino should be liable to the customer for the full amount of the jackpot, or at least the full amount allowed for on the disclaimer, but if it was the manufacturer’s fault, they should be able to collect back the judgment from them. Think product liability – if the product is bad, the customer can sue anyone in the chain of distribution, who can then turn around and sue upstream for indemnity on essentially the same theory: it was the manufacturer’s fault, not the retailer’s or even the wholesaler’s, that the product was bad.
Only if the casino wants to give every penny back to everybody who ever put a penny into that machine. It’s their machine and their notice and any question about its application is going to be construed against them. It’s a stupid notice and it should not have been there in the first place. Giving it effect in the casino’s favor would be legitimizing a racket. Every casino would have an incentive to install a “malfunctioning” machine which never pays out.
Basically what NK said, with one caveat: the disclaimer should be given effect if the gambler caused the malfunction or knowingly exploited it. In all other cases, the loss should rest with the party that was in a better position to prevent the malfunction.
Xrlq, then the there’s no way the loss should rest with the casino, since it was in no way able to foresee or prevent the malfunction.
Casinos are not allowed access to the software inside the slot machines — that’s a Gaming Control Board rule, and as far as I know, it’s true across all jurisdictions. Casinos must rely on the slot manufacturer and governing gaming authority as to fitness of a slot machine for use. They’re not even allowed to perform tests on the machines.
In short, a casino can no more foresee or prevent a firmware malfunction than the player.
nk, your statement:
Every casino would have an incentive to install a “malfunctioning” machine which never pays out.
doesn’t reflect reality. No casino can use a gaming device that hasn’t been approved by its Gaming Control Board. There’s no way a casino can put a deliberately malfunctioning device on the floor — it would lose its gaming license if it tried.
One final word on slots: not all of them are owned by the casino. More and more, casinos have a shared revenue agreement with the manufacturer. The manufacturer installs a machine for free, and in exchange collects a percentage of the win until the machine is taken out of service. Most restricted license sites in Nevada (like bars and such that can have up to 15 slots/video poker machines and no other form of gaming) do that, as well.
IGT was offering shared revenue shortly before I started working there (I worked there 2001-2004, now I work for Bally Technologies).
Xrlq, then the there’s no way the loss should rest with the casino, since it was in no way able to foresee or prevent the malfunction.
It put the machine in, it enticed gamblers to use it, and took their money in accordance with its programmed percentage. If it could not sell a guaranteed “safe” product to a consumer it should not have been selling it in the first place.
No casino can use a gaming device that hasn’t been approved by its Gaming Control Board.
No restaurant can serve a steak that has not been approved by the USDA and no driver can drive a motor vehicle that has not been approved by DOT. That is a threshold question, not a dispositive one. The disposition is reached by looking at relative faults and equities.
Just to be clear. This is gambling. The casinos are not providing a cure for cancer which might have side effects. They are engaged in an activity which contract law under the common law has refused to enforce and which is still largely illegal. A racket which some jurisdictions refuse to punish. They have no equities on their side.
Xrlq, then the there’s no way the loss should rest with the casino, since it was in no way able to foresee or prevent the malfunction.
Huh? By that reasoning, there should be no way a consumer could ever sue a store owner over a product defect, except in the rare instance where the store had caused it. It doesn’t work that way for stores; why the hell should it work for casinos?
Casinos must rely on the slot manufacturer and governing gaming authority as to fitness of a slot machine for use. They’re not even allowed to perform tests on the machines.
And that differentiates them from wholesalers and retailers … err … how, exactly?
In short, a casino can no more foresee or prevent a firmware malfunction than the player.
Hogwash. Of course the casino, as a repeat “player” in the industry, has more knowledge then the average player about the manufacturers of the machines they stock. They’re the ones who decide which machines to stock, for chrissakes. Again, they’re just like retailers – except that for some reason you think they should be shielded from the risks any other retailer accepts as a normal cost of doing business.
Further, even if I were to accept your dubious claim that a casino and an individual gambler are equally at the mercy of the big, bad manufacturers, that still wouldn’t justify your steadfast defense of the casinos’ “heads we win, tails you lose” approach to malfunctions. As you yourself admitted, the machines say “Malfunction voids all pays and plays” but we all know that isn’t true; only malfunctions that favor the player are ever voided. If a malfunction had caused Gary Hoffman to lose a bet he should have won rather than vice-versa, the odds are extremely slim he would have even known to suspect there was a problem, and none that the casino would have given him an opportunity to prove it. For all we know, the machine may have been “malfunctioning” all day long, but no one checked until it registered a jackpot.
One final word on slots: not all of them are owned by the casino. More and more, casinos have a shared revenue agreement with the manufacturer. The manufacturer installs a machine for free, and in exchange collects a percentage of the win until the machine is taken out of service.
Oh goody, just when you think the casinos have perfected their racket, it gets even better! Not only do they have odds overwhelmingly in their favor, they face no risks at all beyond the prospect of a percentage of a lower net winnings. Yet, rather than pay out on a jackpot that could cost them only in terms of reduced profits, they were good enough to stand up for their one armed bandit (gee, why on earth would they call them that?!) manufacturing brethren, who were both responsible for creating the original defect and bore all the real risks associated with it. How touching.
nk: Indian law is psycho, in comparison to normal law..
The tribes are notionally “sovereign nations” (or close enough as makes no difference) on their reservations (which is where the casinos are), and they get away with all kinds of things that would be illegal for anyone else that isn’t a government, as they have sovereign immunity.
(Like just ignore contracts as they see fit – which is one reason the reservations are so awful.
Nobody trusts them to pay, so nobody wants to do work for them, unless they waive immunity in the contract.)
Lawyers told ABC News that gamblers like Hoffman may have little legal recourse against Native American casinos, which sometimes operate beyond the reach of U.S. courts.
B.S. The casino is not out of reach of his state’s longarm statute or federal jurisdiction. There may be a fight over the rule of decision in federal court.
However, I do think that he’s only entitled to $2,500.00. It’s a contract. A gambling contract, sure, but in a place where gambling contracts are legal. When he put his nickel in the slot his expectation and the promise the casino made was that the most he would win was $2,500.00. That’s all he’s entitled to.
I agree that the “malfunction” disclaimer is BS. Total BS. The casino does not get the benefit of faulty equipment. It gets full liability which in this case is $2,500.00.
Comment by nk — October 25, 2007 @ 9:51 pm
I’d be inclined to agree, if the disclaimer said “Maximum jackpot of $2,500, even if we’re a bunch of dumbasses who allow our machine to go haywire and tell you otherwise.” Barring that, I see no reason why an ambiguous disclaimer (most would read it merely as a warning that the machine will never register a jackpot above $2,500, not a “contractual” trick to void the jackpot if it does) should trump the machine’s statement as to how much the guy had won. Both statements are in writing, and the latter is more recent and more specific, so what makes the earlier, more general representation any more “contractual” than the later, more specific one?
One thing is clear, though: if the statement turns out to be correct that a state jury isn’t even allowed to reach the question, no one in his right mind should ever gamble on an Indian casino again. It’s in the interests of every other Indian casino in the country to make sure this doesn’t happen. Hell, it’s probably even in Sandia’s interests, if only they and their idiot savant (only without the “savant” part) of an attorney could see past their own noses.
Comment by Xrlq — October 25, 2007 @ 10:28 pm
What if the machine had said, “We’re serving your liver for dinner tonight. Please go the kitchen, take off your shirt and lie down on the table?” Contracts are what people agree to and reasonably expect to get.
If the Indians try to avoid jurisdiction and a remedy, they’ll likely be more screwed. They have been soliciting in his state and likely sending buses there to pick up customers. Let alone longarm state jurisdiction, he might have a federal cause of action under RICO if they try to play games (pun unintended).
Comment by nk — October 25, 2007 @ 10:48 pm
If I sign a contract to purchase a property that says X, but the papers I sign at closing say Y, Y wins. Why should this be any different? The bit about serving your liver is a red herring, as the jackpot amount was no more or less reasonable than the disclaimer. Conversely, if the disclaimer really did trump all, then any jackpot in excess of $2,500 should be void in toto, as it is conclusive proof that the machine has malfunctioned. In which case, we’re back to my earlier suggestion that all gamblers wear a pin stating their own maximum losses, and see if the casinos agree to be bound by that.
Comment by Xrlq — October 25, 2007 @ 11:09 pm
Well, you’re stretching contract law which is agreement, meeting of minds and reasonable expectations of performance.
If I sign a contract to purchase a property that says X, but the papers I sign at closing say Y, Y wins.
Nope. A deed conveys no title until delivered. I can draft a warranty deed giving you title to Y and it would be meaningless until I gave it to you. I can tear it up and draft a new one giving you title to X. There’s no delivery of the $1.6 mil here or there would not be this discussion.
Gamblers agree to their maximum losses when they take their money out of their pocket and put it on the table.
On the malfuntioning machine, the man put his money in and the casino expected to take it. The malfunction is not his fault and the casino implicitly agreed to give the maximum amount it agreed to pay just as it agreed to take the maximum amount he was willing to put in the machine.
I know we’re in the cyber-age but just power do we want to give to machines to make binding contracts?
Comment by nk — October 26, 2007 @ 12:00 am
I can draft a warranty deed giving you title to Y and it would be meaningless until I gave it to you. I can tear it up and draft a new one giving you title to X.
If I signed for Y and you tore that deed up and gave me X, what do you think I would do?
Comment by McGehee — October 26, 2007 @ 8:52 am
I will have to look at this more carefully, but my first-look reaction is this:
The notice “Malfunction voids all pays and plays” is put there by the slot manufacturer, not the casino. I know this because I program slots for a living.
That said, I don’t know how this affects this particular issue.
Comment by Steverino — October 26, 2007 @ 11:10 am
Looking more closely at the story, I’d say that it’s IGT’s fault, and not the casino’s. The error wasn’t the result of poor maintenance by Sandia.
IGT’s blaming an outside program, but I’m skeptical of that.
Just my two cents….
Comment by Steverino — October 26, 2007 @ 11:34 am
McGehee #6, even if X was talking about novation which my previous comment presumed he was not, both parties have to agree. If Buyer and Seller sign a contract for X and seller’s lawyer mixes up his files and takes the closing package for Y to the closing, any time before the closing is completed he can correct his mistake. If he does not, well that’s a very interesting case. Here, we don’t even have a lawyer. We have a machine supposedly rewriting the contract between the parties.
Comment by nk — October 26, 2007 @ 12:40 pm
I don’t gamble much at all, but I don’t gamble at all at Indian Casinos for exactly the reason described in the article. There was a story a while back about a woman getting injured at an Indian Casino and basically getting the HAHAHAHA you can’t sue us treatment. Personally, I avoid places that are trying to screw me. (Casino’s generally) Doubly so, places that are trying to screw me and leave me with little to no recourse.
Comment by Joel B. — October 26, 2007 @ 10:45 pm
Question for the legal minds out there:
To what extent is the casino responsible for a machine with faulty software?
Bear in mind that the software has been tested extensively by manufacturer and the Gaming Control Board of the casino’s jurisdiction before it’s approved for use on any casino floor. Also, there’s nothing a casino can do to make software go bad. So, this is a bug that wasn’t tested and wasn’t caught.
So, if the machine’s software really did contain a bug that caused the malfunction, is the casino liable at all? Forget for a moment that this is an Indian casino, in what states would a casino be held responsible?
Comment by Steverino — October 27, 2007 @ 2:33 am
For good public relations, this casino should pay this man the money. Having worked in an indian casino in Oklahoma, anytime there is a malfunction and the casino pays a person, malfunction or otherwise, the casino is refunded by the vendor.
One million dollars is nothing to these casinos, Cherokee Casino in Tulsa takes in over six million on any given Friday night. One million is peanuts.
In addition since the man was congratulated by employees of the casino they have all but admittted “HE WON” and pictures are always taken by customers that win if not by the staff.
Furthermore, tribes fall under federal, but are regulated by state gaming commissions.
Comment by David Nixon — October 27, 2007 @ 7:49 am
We’re talking about liability as between the customer and the casino. The casino should be liable to the customer for the full amount of the jackpot, or at least the full amount allowed for on the disclaimer, but if it was the manufacturer’s fault, they should be able to collect back the judgment from them. Think product liability – if the product is bad, the customer can sue anyone in the chain of distribution, who can then turn around and sue upstream for indemnity on essentially the same theory: it was the manufacturer’s fault, not the retailer’s or even the wholesaler’s, that the product was bad.
Comment by Xrlq — October 27, 2007 @ 9:59 pm
So the notice “Malfunction voids all pays and plays” doesn’t mean a thing? It’s there in plain view on every slot machine.
Comment by Steverino — October 28, 2007 @ 11:15 am
Only if the casino wants to give every penny back to everybody who ever put a penny into that machine. It’s their machine and their notice and any question about its application is going to be construed against them. It’s a stupid notice and it should not have been there in the first place. Giving it effect in the casino’s favor would be legitimizing a racket. Every casino would have an incentive to install a “malfunctioning” machine which never pays out.
Comment by nk — October 28, 2007 @ 6:55 pm
Basically what NK said, with one caveat: the disclaimer should be given effect if the gambler caused the malfunction or knowingly exploited it. In all other cases, the loss should rest with the party that was in a better position to prevent the malfunction.
Comment by Xrlq — October 28, 2007 @ 7:23 pm
Xrlq, then the there’s no way the loss should rest with the casino, since it was in no way able to foresee or prevent the malfunction.
Casinos are not allowed access to the software inside the slot machines — that’s a Gaming Control Board rule, and as far as I know, it’s true across all jurisdictions. Casinos must rely on the slot manufacturer and governing gaming authority as to fitness of a slot machine for use. They’re not even allowed to perform tests on the machines.
In short, a casino can no more foresee or prevent a firmware malfunction than the player.
nk, your statement:
doesn’t reflect reality. No casino can use a gaming device that hasn’t been approved by its Gaming Control Board. There’s no way a casino can put a deliberately malfunctioning device on the floor — it would lose its gaming license if it tried.
Comment by Steverino — October 28, 2007 @ 11:31 pm
One final word on slots: not all of them are owned by the casino. More and more, casinos have a shared revenue agreement with the manufacturer. The manufacturer installs a machine for free, and in exchange collects a percentage of the win until the machine is taken out of service. Most restricted license sites in Nevada (like bars and such that can have up to 15 slots/video poker machines and no other form of gaming) do that, as well.
IGT was offering shared revenue shortly before I started working there (I worked there 2001-2004, now I work for Bally Technologies).
Comment by Steverino — October 28, 2007 @ 11:44 pm
Xrlq, then the there’s no way the loss should rest with the casino, since it was in no way able to foresee or prevent the malfunction.
It put the machine in, it enticed gamblers to use it, and took their money in accordance with its programmed percentage. If it could not sell a guaranteed “safe” product to a consumer it should not have been selling it in the first place.
No casino can use a gaming device that hasn’t been approved by its Gaming Control Board.
No restaurant can serve a steak that has not been approved by the USDA and no driver can drive a motor vehicle that has not been approved by DOT. That is a threshold question, not a dispositive one. The disposition is reached by looking at relative faults and equities.
Don’t you just hate lawyers?
Comment by nk — October 29, 2007 @ 3:19 am
Just to be clear. This is gambling. The casinos are not providing a cure for cancer which might have side effects. They are engaged in an activity which contract law under the common law has refused to enforce and which is still largely illegal. A racket which some jurisdictions refuse to punish. They have no equities on their side.
Comment by nk — October 29, 2007 @ 4:31 am
Huh? By that reasoning, there should be no way a consumer could ever sue a store owner over a product defect, except in the rare instance where the store had caused it. It doesn’t work that way for stores; why the hell should it work for casinos?
And that differentiates them from wholesalers and retailers … err … how, exactly?
Hogwash. Of course the casino, as a repeat “player” in the industry, has more knowledge then the average player about the manufacturers of the machines they stock. They’re the ones who decide which machines to stock, for chrissakes. Again, they’re just like retailers – except that for some reason you think they should be shielded from the risks any other retailer accepts as a normal cost of doing business.
Further, even if I were to accept your dubious claim that a casino and an individual gambler are equally at the mercy of the big, bad manufacturers, that still wouldn’t justify your steadfast defense of the casinos’ “heads we win, tails you lose” approach to malfunctions. As you yourself admitted, the machines say “Malfunction voids all pays and plays” but we all know that isn’t true; only malfunctions that favor the player are ever voided. If a malfunction had caused Gary Hoffman to lose a bet he should have won rather than vice-versa, the odds are extremely slim he would have even known to suspect there was a problem, and none that the casino would have given him an opportunity to prove it. For all we know, the machine may have been “malfunctioning” all day long, but no one checked until it registered a jackpot.
Oh goody, just when you think the casinos have perfected their racket, it gets even better! Not only do they have odds overwhelmingly in their favor, they face no risks at all beyond the prospect of a percentage of a lower net winnings. Yet, rather than pay out on a jackpot that could cost them only in terms of reduced profits, they were good enough to stand up for their one armed bandit (gee, why on earth would they call them that?!) manufacturing brethren, who were both responsible for creating the original defect and bore all the real risks associated with it. How touching.
Comment by Xrlq — October 29, 2007 @ 10:02 pm
nk: Indian law is psycho, in comparison to normal law..
The tribes are notionally “sovereign nations” (or close enough as makes no difference) on their reservations (which is where the casinos are), and they get away with all kinds of things that would be illegal for anyone else that isn’t a government, as they have sovereign immunity.
(Like just ignore contracts as they see fit – which is one reason the reservations are so awful.
Nobody trusts them to pay, so nobody wants to do work for them, unless they waive immunity in the contract.)
Comment by Sigivald — November 2, 2007 @ 3:55 pm