Las Vegas Sun

November 27, 2014

Gamers face wider fraud lawsuit

A group of attorneys suing virtually every major casino operator and slot manufacturer is asking a federal judge for access to documents they say will prove a long-term effort was made by industry players to intentionally mislead slot players.

The attorneys filed their request in Las Vegas as part of an effort to give their lawsuit class action status. At the moment, the attorneys represent only four frequent slot players residing across the United States.

Visiting Federal Judge David Ezra, based in Honolulu, ordered the parties at a Las Vegas hearing Monday to negotiate on the request for documents and report back to him by this afternoon. If the parties are unable to come to a resolution, Ezra will issue a ruling next week.

"I'm not holding my breath, but I'm hopeful," Ezra said.

The stakes would be raised considerably by class action status, since it would push the number of plaintiffs from four into the thousands. Attorneys for the plaintiffs say it's reasonable to ask for that status, since many more similar lawsuits can be expected, and a class action suit would move the case along much more quickly.

Though discovery hasn't even begun on the lawsuit, it is five years old. The legal action first began in 1994, when Florida residents William Poulos and William Ahearn filed separate lawsuits against nearly 50 defendants. The two lost money to slots over the past two decades, and claimed that the machines induced them to play by misrepresenting their actual odds of winning. After a similar suit was filed in Nevada in 1995, the case was consolidated here. In total, the case names 70 different defendants, and includes casino operators, slot manufacturers and cruise lines.

What the plaintiffs are now seeking are any documents and materials that will show slots and video poker machines have always been marketed in a misleading way, and that slots players perceive the machines in the same manner as the defendants. One example would be a video poker machine that claims it deals from a 52-card deck, when in fact it deals from 10 preselected cards. Another would be a slot that repeatedly places winning symbols near the payline, giving the player the impression of just missing a big jackpot. To achieve class action status, the plaintiffs are trying to prove such methods are pervasive among the defendants.

Such documents could include marketing materials, memos, presentation materials and slot operations manuals. The plaintiffs are also seeking access to casino player records, which they claim will show that the playing habits of the defendants are typical among slot players. The amount of records being sought is considerable; since they would have to demonstrate a widespread history of such marketing, the plaintiffs are demanding materials that go back a decade or more.

"(The defendants) have said there are an infinite number of individual issues that make class action impossible," plaintiffs' attorney Mary Boies told Ezra in Monday's hearing. "We need to be able to respond to their arguments."

Defense attorney Steve Morris responded that the huge request was unreasonable, since it came just two days before the discovery period closed -- and four months after the plaintiffs told a judge that further discovery in support of the class action motion was unnecessary.

"We were told ... everything about the casino industry, we want," Morris said. "We had a single exchange, followed by a motion to compel, two days before the discovery period ran out."

U.S. Magistrate Robert Johnston in November struck down the plaintiffs' request for the documents. The decision was then appealed to Ezra.

The discovery process for the case itself will begin after Ezra decides whether to grant class action status to the lawsuit. Boies said the plaintiffs intend to continue pursuing the case, with or without class action status.

One of the plaintiff attorneys is Las Vegas mayor-elect Oscar Goodman, though associates in his office say he will no longer be involved in the case so he can serve as mayor full-time.

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