BetMGM Asks Court To Uphold Dismissal Of Gambling Addict’s Suit

Is New Jersey’s Consumer Fraud Act (CFA) applicable to the casino industry?

How a federal appeals court answers that question will likely determine the success of Sam A. Antar’s ongoing legal quest to hold BetMGM and associated parties (including Borgata) liable for millions of dollars in gambling losses that ultimately landed the nephew of New York-area electronics impresario “Crazy Eddie” Antar in prison for defrauding friends and business associated to feed his addiction.

On Friday, July 25, BetMGM and Borgata filed their respective responses to Antar’s appeal, asking the United States Court of Appeals for the The Third Circuit to uphold a district court dismissal of Antar’s civil claim on the grounds that the CFA is preempted by the CCA, or Casino Control Act.

In her Jan. 31 ruling, Judge Madeline Cox Arleo added that the CCA “is notably silent on whether casinos or online gambling platforms may induce people who present with compulsive gambling behavior to patronize their businesses.” Due in part to this silence, Antar’s attorney, Matthew Litt, feels that the CFA is applicable to his client’s case.

“The CCA does not deal specifically, concretely, or pervasively with the activity at issue in this case,” Litt told US Bets on Monday. “The CCA is completely silent on the activity at issue in this case. Saying that the CFA is preempted because the CCA deals with gambling generally is far too broad an interpretation, inconsistent with all relevant state and federal precedent on the issue of preemption. 

In filing his appeal in June, Litt wrote, “The District Court’s dismissal of the Appellant’s Complaint on the basis that New Jersey’s legislature has not yet seen fit to protect the Appellant from the business practices at issue in this matter is an exceedingly narrow view, wholly inconsistent with the spirit and long line of precedent interpreting the CFA. 

“New Jersey’s legislature protects consumers like the Appellant from the unconscionable business practices of business entities like the Appellees through one of the most expansive and progressive consumer protection acts in the United States. Unless there is an actual conflict between the CFA and CCA (Casino Control Act), there simply is no reason or precedent for the removal of that protection for no reason other than that the consumer is a gambler and the business is a casino.”

Is Problem Gambling Subjective?

In BetMGM’s most recent filing, the gaming company’s attorneys argued that the CCA is “not ‘silent’ on gaming operators’ responsibilities to problem gamblers. Rather, it embodies a comprehensive scheme requiring gaming operators to educate problem gamblers and to enforce any self-imposed limits on their gambling. The regulators entrusted to implement the Casino Control Act are responsible for enforcing those regulations and imposing penalties when they are violated.”

Furthermore, BetMGM’s attorneys maintained that New Jersey does not enforce a duty of care standard on gambling operators, adding, “A casino cannot reasonably exercise care to prevent direct financial harm to a problem gambler who insists on gambling, due to the insurmountable subjective factors inherent in identifying problem gamblers who have not self-excluded and in setting limits on their gambling.”

Antar never added his name to New Jersey’s self-exclusion list, but he was afforded VIP status with BetMGM’s online casino. In his June appeal, Litt detailed several occasions in which a pair of VIP hosts were “relentless” in their ongoing quest to “nurture, expedite, and exacerbate the gambling addiction they knew [Antar] suffered from.”

In one such example, Litt claimed that “47 text messages were exchanged between the Appellees and Appellant on a single day after Appellant told Appellees he intended to stop gambling.” Antar said his gambling activity exceeded $24 million in 2019 and that he wagered $5 million during a single 16-day period in January 2020.

“The key issue in this litigation is a straightforward jury question: whether it is an unconscionable business practice for an online casino operator to target a consumer with enticements to gamble when the operator knows that consumer suffers from gambling addiction,” Litt wrote in his appeal.

While it remains to be seen how the appeals court answers this question, BetMGM’s attorneys stated that “numerous aspects of problem gambling are subjective—such as, for example, distinguishing problem gamblers from recreational gamblers and determining when gambling losses become ‘excessive.’”

BetMGM’s attorneys proceeded to argue that “a regular gambler could claim they suffered problem gambling losses, and a gaming operator would have no ability to refute that assertion. That could, in turn, lead to a situation in which patrons have an incentive to gamble excessively, knowing they could recoup their losses through a ‘problem gambling’ cause of action.”

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