Compulsive Gambler Loses in Indiana Court of Appeals
When Caesar's Riverboat Casino, now known as Horseshoe Southern Indiana, sued Genevieve Kephart for her gambling debts, the gambler decided to turn the tables. She counter-claimed, accusing the casino of taking advantage of her pathological gambling disorder. Kephart demanded damages for emotional injury, strained family relationships, medical costs and lost quality of life. By a 2-1 ruling in late March, the Indiana Court of Appeals held that Indiana law provides her no remedy and directed that her counterclaim be dismissed. Caesars Riverboat Casino, LLC v. Kephart, No. 31A01-0711-CV-530 (March 20, 2009, Ind. Ct. App.).
The central dispute in Kephart is whether the casino owes a special duty of care to gamblers it "knows" are compulsive gamblers. (Since the case was decided based on preliminary motions, the court assumed that the casino knew of Kephart's gambling disorder, though its supposed knowledge could have been a contested issue at a trial.) The plaintiff emphasized that Caesars had extended credit to her, granted complimentary items, and solicited her to come and gamble. In an opinion by Judge Paul Mathias, the Court of Appeals stressed that Kephart had "foreknowledge of the risks" of gambling, no matter what the casino's actions were. That foreknowledge, the court held, foreclosed a finding that the casino owed her a special duty of care to avoid marketing to her:
“[A] casino operator does not act in a reckless manner by marketing to individuals it knows to be compulsive gamblers. For gamblers, compulsive or not, just as for shoppers, compulsive or otherwise, marketing by a vendor is not reckless conduct.”
In dissent, Judge Terry Crone insisted that under the assumed facts, it was "reasonably foreseeable … that Kephart would be injured by Caesars' actions" in marketing to her. The dissent also denounced Caesars' (assumed) "predation and prosecution of a pathological gambler," finding it "repugnant." "I believe," he ended his opinion, "that Hoosiers would expect more from their government and the businesses that operate here."
