Casino blacklists prove to be a dicey proposition

Adam Goldman

Monday, Feb. 23, 2004 | 9:08 a.m.

Virginia Ormanian burned through most of her retirement savings playing slot machines in Detroit casinos last year.

The 49-year-old Wyandotte, Mich., woman received cash advances on her credit cards and cashed checks at the casinos. Once she won $8,000 playing slots, and the casino paid her after filling out the necessary tax forms.

But Ormanian shouldn't have been able to do any of it.

The gambling addict had voluntarily banned herself in August 2002 from the casinos through a state program that was supposed to keep her out.

"I was counting on the casinos to honor their contract," Ormanian said. "I had to get my life back together."

Now Ormanian and another woman, Norma Astourian of Taylor, Mich., are suing the casinos for breach of contract. They claim the gambling companies didn't enforce the rules of the "dissociated persons" list on which they placed themselves.

As gambling spreads across the country, a handful of states have created self-exclusion lists that bar people from entering casinos. Problem gamblers who have blacklisted themselves are supposed to forfeit their jackpots and face arrest if caught inside a casino.

The voluntary lists have raised questions in the gambling industry and prompted scientific studies about their effectiveness. They've also come under legal assault from gambling addicts who believe it's up to casinos to ensure they stop frittering away their money.

"It was a vehicle to allow the gambler to help himself. It's through the genius of our legal system that this has metamorphasized into a potential risk for casinos," said David O. Stewart, a Washington, D.C. lawyer, who has defended gambling companies in self-exclusion and similar lawsuits, and advises the American Gaming Association.

Missouri, Louisiana, Illinois, Michigan and New Jersey have self-exclusion lists with more than 8,600 names on them. Indiana's Legislature has passed laws to enact a list.

Nevada, the nation's largest gambling state, doesn't fund a self-exclusion list, though casinos will bar patrons on request.

Carol O'Hare, executive director of the Nevada Council on Problem Gambling, said it would be a logistical nightmare in a state in which slot machines are also found in bars, gas stations and supermarkets.

"How are you going to monitor this?" she said. "You'd have to police every 7-Eleven and restaurant. We need to be providing treatment."

Missouri was one of the first states to introduce the exclusion program in 1997 and counts more than 6,400 people on its list.

Kevin Mullally, executive director of the Missouri Gaming Commission, said the list was conceived as a tool to help people shake their addiction.

"That's all it is," he said. "It's not a panacea or a quick fix."

Like other states, Missouri's exclusion list shields people from direct marketing, and when casinos violate the policy, they can be fined or lose their gambling license.

Mullally predicted that "if the research supports their effectiveness, it will become standard procedure in most gaming jurisdictions."

But research is hazy.

Judy Patterson, the AGA's executive director and senior vice president, said there's no uniform self-exclusion policy among states.

"The states have enacted legislation that's really not based on any scientific evidence on whether it works," she said. "I think the industry is definitely supportive of this self-exclusion program, but they would also like to know that it works."

Harvard Medical School's Institute for Research on Pathological Gambling and Related Disorders was recently awarded a grant to study the effectiveness of Missouri's program.

Robert Ladouceur, a professor of psychology at Laval University in Quebec, said a new study he completed involving three casinos and about 200 compulsive gamblers shows "there is some usefulness" to self-exclusion programs.

"It won't help every compulsive gambler but it will help some," he said.

One casino operator isn't waiting for definitive data.

Las Vegas-based Caesars Entertainment Inc. intends to create a database of problem gamblers who would be barred for life from its 19 properties in the United States.

People can be placed on the company's "Responsible Gaming List" voluntarily -- or involuntarily if casino employees determine patrons are problem gamblers.

Lurking behind such lists is a question about the legality of the contracts people sign with the states and casinos to bar themselves, and whether the pacts are enforceable.

Stewart said lawsuits filed against casinos and Michigan were without merit. Ormanian's and Astourian's suit against the Michigan Gaming Control Board was dismissed.

Stewart said no plaintiff has yet to win, but a verdict against the casinos could have repercussions.

One case in particular has garnered attention in the industry and could be seen as a legal bellwether.

Daniel Santangelo had voluntarily banned himself from New Jersey casinos but later violated the self-imposed order. Santangelo won $64,160 at Bally's Atlantic City over a 10-week period in 2002, breaking the agreement that said he couldn't collect winnings.

Santangelo kept the money but authorities have ordered him to forfeit it. Santangelo's refusal likely will test the limits of New Jersey's list.

Linda Kassekert, chairwoman of the New Jersey Casino Control Commission, said the state intends to recover the money. Letting Santangelo walk away with the money would set a bad precedent.

"These are untested waters," she said. "I think we are going to be pretty emphatic. We want to make sure that when people sign up for this program they know we are serious about it."