Court Affirms Dismissal of Alleged Compulsive Gambler’s Claims
Rejecting the appeal of a Texas attorney who embezzled funds from client trust accounts and gambled them away, the U.S. Court of Appeals for the 5th Circuit affirmed a lower court ruling that the attorney stated no claim against several casinos and related entities. G. Allen Price claimed Harrah’s Entertainment was responsible for his criminal conduct because the company allegedly “lured” him to its casinos through promotional campaigns for free transportation, drugs, alcohol and prostitutes.
Price, currently serving a six-year jail term in Texas state prison, claims to be a compulsive gambler, an alcoholic and an abuser of prescription drugs. In April 2001, however, Price began visiting Harrah’s Lake Charles casino. Initially, he lost small amounts of money and then won two consecutive $15,000 jackpots, which allegedly “induced” him to gamble more. As Price’s level of play increased, Harrah’s allegedly extended his credit and supposedly offered him more salacious (and illegal) promotions.
During this period, Price was abusing Adderall, an amphetamine-based medication typically used to treat attention deficit disorder. Price claims he “regained his judgment” when he stopped taking the Adderall, voluntarily surrendered to the police, and forfeited his law license. He claimed to have lost between $1.2 million and $2.1 million at Harrah’s, which denied all of his allegations.
Price asserted that Harrah’s conduct violated both the federal RICO statute and common law tort duties. He sought to recover his alleged gambling losses plus compensation for emotional harm and diminished quality caused by prison life. He also demanded punitive damages.
Harrah’s filed a motion to dismiss Price’s complaint, arguing that Price had failed to plead a valid RICO claim and that there was no basis for federal maritime jurisdiction. Harrah’s also sought dismissal of Price’s state law claims, disputing its legal duty to identify or exclude compulsive gamblers from its casinos or otherwise prevent them from suffering gambling losses.
The trial court agreed with Harrah’s, saying that Price had failed to state a valid RICO claim and held that federal maritime law did not apply because the activity at issue – gambling - was not related to traditional maritime activity. The court went on to rule that, even if federal maritime jurisdiction applied, Price’s negligence claims still would fail because Harrah’s had no duty to protect Price from suffering gambling losses.
After briefing and oral argument, the court summarily affirmed. See Price v. Harrah's Marketing Service Corp., No. 03-20988, 2004 WL 2341838 (5th Cir., Oct. 15, 2004). Two federal appeals courts now have rejected the RICO claims of alleged compulsive gamblers, see Williams v. Aztar Indiana Gaming Corp., 351 F.3d 294 (7th Cir. 2003).
