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Aztar Faces Federal Lawsuit

10 September 2002

by Rod Smith

LAS VEGAS--Aztar Corp., owner of the Tropicana, is mired in federal litigation that insiders say could be the Achilles heel of the gaming industry.

Gambling foe Tom Grey, executive director of the National Coalition Against Legalized Gambling, said the case is the kind of "black eye" some governors or attorneys general are likely to jump on in an election year, much as they did in the so-called tobacco case.

On the surface, David N. Williams vs. Aztar Corp. resembles several lawsuits filed before it. The claimant says he was lured to a riverboat casino, became addicted to gambling and lost everything he had.

What makes this Evansville, Ind., case different is that Aztar is alleged to have known Williams was addicted to gambling and accepted responsibility by banning him from its Evansville riverboat but still lured him back, according to plaintiff's attorney Terry Noffsinger.

The standard industry defense in previous cases has been that casinos had no knowledge of gamblers' problems and are not responsible for their behavior.

A motion for summary judgment was filed last week, with arguments expected to be scheduled in the near future. Williams, who said he lost an estimated $175,000, is seeking unspecified damages.

Regardless of the outcome, however, both sides are expected to appeal. An Aztar spokesman said the company does not comment on pending litigation.

Insiders say the case is unfolding when the industry needs a face-lift more than a black eye.

"The gaming industry has done a great job marketing its product, but a lousy job marketing itself," said Harrah's Senior Vice President Jan Jones.

"Only 30 percent of people don't think there should be gambling," according to the former Las Vegas mayor.

"But people think we're arrogant, predatory, self-serving printers of money," Jones said. "They don't appreciate the jobs we create, the redevelopment we bring in or the added capital we attract.

"Gaming gets no credit because people who approved gaming saw it as just a way to generate revenue," she said.

"The problem isn't addiction, but addictive personalities. ... But don't make us into the next tobacco industry," Jones said.

Grey, however, said the casino companies "are on the horns of a dilemma. Because government has given them a seal of approval, they want to be treated with respect. But the more they've expanded, the more problems are created, and the clearer it becomes they are not like another business."

"They're going to end up with a situation where they're going to be asked to bear the cost of the addiction, bankruptcy, crime and corruption that are by-products of gambling," Grey said. "And at that point they'll be in real trouble."

The Indiana case, originally filed last year, alleges federal and state racketeering activity, breach of contract, tortious breaches of duty and fraud.

Williams started gambling on the Aztar riverboat six months after it opened, losing $20 his first night, but then progressively larger amounts of money, according to Noffsinger.

His girlfriend wrote Aztar after he had lost $70,000 expressing concern about his losses and mental health, claiming he had become suicidal. At about the same time, an Indiana judge had him committed to a mental health center.

Aztar then banned him from gambling on the riverboat and wrote him noting "the 'medical/psychological' nature of problem gaming behavior and advised Williams that Aztar would "insist that prior to gaming with (Aztar), at any time in the future, [Williams would be required to present (Aztar) with medical/psychological information which demonstrate(d) that (his) patronage of (Aztar's) facility pose(d) no threat to (Williams') safety and/or well being."

Nevertheless, he kept receiving promotional material, some of which claimed ". . . Players Win!" Some promised "[f]ree money, just [in time for the Holidays." And other mailings called Williams one of Aztar's "very best players," knowing despite knowing "such representation was false and misleading when made," according to the suit.

Eventually following a Gamblers Anonymous meeting, Williams returned to the riverboat where he lost his entire savings and his home and ultimately filed for bankruptcy.

"This kind of litigation will get the government to throw casino operators overboard," Grey said. "They have lotteries they want to protect so they'll point at the [slot] machines to blame."

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