Key court decision issued for gaming industry

By Liz Benston (contact)

Tuesday, July 2, 2002 | 11:15 a.m.

A lawsuit against more than 60 casinos, slot machine manufacturers and cruise lines alleging that slot operators misrepresented the odds of winning has been denied class-action status, delivering a major victory to a casino industry long worried by the threat of such a billion-dollar, far-reaching suit.

In a ruling issued last month, U.S. District Judge Roger Hunt in Las Vegas said the plaintiffs had met the initial prerequisites for class-action status. However, he denied their motion for a class action, saying there was not enough evidence to show that the proposed class was "cohesive" enough to settle common claims against the industry.

"Like the decision to buy a music CD, the decision to play an electronic slot or video poker machines is a complex matter," Hunt wrote in explaining his reasoning.

A person might play a "Monopoly"-themed slot machine because he is a fan of the board game, while another might play a 25-cent video poker machine because the $10 minimum bid to play table poker is too steep for his budget, he argued.

Proof of the reasoning behind such decisions "is necessary to determine whether or not the allegedly fraudulent labeling of electronic gaming machines led people to play them."

Dennis Kennedy, a partner with the Las Vegas law firm Lionel Sawyer & Collins and co-lead defense counsel for the gambling industry on the case, echoed a similar argument in applauding the ruling Monday.

"Deciding to play an electronic slot or video poker machine is much like making the decision to buy a CD -- you may like what you purchase or you may regret the decision," he said in a statement.

Plaintiffs' attorney Mary Boies, who is based in New York state, could not be reached.

The case began as separate suits filed by a handful of gamblers that were consolidated in Nevada. The future of those individual lawsuits could not be determined by press time today.

Despite the dismissal, Hunt found that the plaintiffs met prerequisite requirements for class-action status. The number of potential members in the class was so numerous that listing each plaintiff in a single lawsuit would be impractical, he said. Also, there were questions of law or fact common to the class, the claims or defenses of the representative parties were typical of the claims or defenses of the class and the representative parties were found to fairly and adequately represent the interests of the class.

The defendants disputed many of those issues. They also argued that the three named plaintiffs and proposed class representatives -- slot players Brenda McElmore, Larry Schreier and William Poulos -- had interests that were antagonistic to the remainder of the class and were not up to the task. The named plaintiffs continued to play video poker and electronic slot machines after claiming that they were fraudulent, among other things, defendants said.

The legal action began in April 1994, when Poulos filed a complaint in the U.S. District Court in Florida under federal racketeering and organized crime laws, as well as state laws on fraud and deceit. The complaint was later amended to include additional plaintiffs and claims. The case was transferred to the U.S. District Court in Nevada, upon the motion of several defendants, in December 1994. Plaintiffs filed the motion for class certification in March 1998.