Monday, Feb. 14, 2000 | 10:50 a.m.
MEMPHIS, Tenn. -- Mississippi gambling regulators say they have no plans to tinker with the casinos' practice of lending money to gamblers.
The issue of gambling debt -- and the right to collect it in Tennessee -- arose last month when a Shelby County judge dismissed $23,800 in markers owed by a Memphis woman to the Horseshoe Casino in Tunica, Miss.
A marker is a legal document -- a piece of paper the size of a deposit slip -- that a casino patron signs to get credit.
But beyond the legal question of whether such debt is collectable in Tennessee, some critics question whether it's good public policy for casinos to be lending money for wagers.
Shortly after the judge's ruling was released, all but one of Tunica's 10 casinos declined comment on their marker policies or any prospects for changing them. A Harrah's spokesman said the judge's ruling was under review. Last week, those responding said their policies haven't changed.
"We do not extend high amounts of credit at Hollywood Casino," general manager John Osborne said in a statement e-mailed to the newspaper. "We offer credit more as a convenience for our patrons who may not want to pay ATM machine fees or who may not carry checks with them to cash.
"We offer guaranteed check-cashing just as a supermarket or retail outlet would cash checks. Also, just as many businesses, we offer in-house credit to those casino patrons who request higher amounts based on whether or not they are creditworthy."
The case raising the issue of markers stemmed from debts Yo Anne Russell of Memphis ran up at the Horseshoe Casino. Records show she wrote out $13,000 of her $23,800 marker debt in one 24-hour period. Horseshoe Casino took her to court in Memphis and obtained a judgment against her in August 1998.
She appealed and won on Jan. 14 when Circuit Court Judge D'Army Bailey said Tennessee courts don't recognize debts incurred through credit gambling.
All three members of the Mississippi Gaming Commission said in interviews that they see no problem with casinos extending credit to gamblers. All three also questioned Bailey's reasoning in not enforcing a legitimate gambling debt in Tennessee.
Chairman W. W. "Bill" Gresham Jr. said the casinos are required to determine that patrons are good credit risks before they lend them money. He said he has no reason to believe safeguards aren't in place.
Commissioner Robert C. Engram said he has no interest in changing the policy.
"If they want to extend credit, they can the same as a gas station," he said.
Commissioner Victor P. Smith said the casinos have no idea who has a gambling problem any more than they can tell "who has $10 million and who has 10 cents."
About the casinos lending money, Smith said: "I don't have any problem with the practice, but casinos need to be careful not to extend credit to people who don't have the means to pay it back."
And Smith said patrons should be aware of the risk they're assuming because "a marker is an obligation for that person to pay. Some of 'em do win. Most of 'em don't."
Asked why the commission endorses the credit-extension practice, the commission's executive director, Chuck Patton, said it's simply good business. He says he sees how allowing markers "has a beneficial effect for the casinos," but says it's just as much a question of "individual freedom," with casinos free to lend and those with good credit free to borrow.
Early in Mississippi's history of regulating the casinos, and just a year after the first one opened in Tunica County, District Attorney Cono Caranna of Gulfport asked the Mississippi Attorney General's Office for guidance. Caranna asked for an opinion: Could those who didn't pay casino markers be prosecuted under the state's bad check statute? The answer was a qualified "no."
Special Assistant Attorney General Mike Lanford, who wrote the November 1993 opinion, said in essence, the marker drawn on a patron's bank account is a promise to pay in the future, not a guarantee the money is in the bank at the time the marker is made. So they're technically not bad checks even if they're no good at the time they're presented. When they're not honored, creditor casinos have to sue to get the money back, he said.
In Las Vegas, several casinos and Clark County prosecutors are being sued over the Nevada law allowing criminal prosecution of casino debtors under bad check statutes.
David A. Kirkscey, the Horseshoe Casino lawyer who sought the judgment against Russell, insisted in court filings that the "Casino Credit Application" she signed was nothing more than an application for check-writing privileges. He made that argument despite the fact that the application asked for the "credit limit requested" and called the money provided an "indebtedness" collectable within 30 days.
A copy of the document in the court file shows lines for a Social Security number, date of birth, home phone number, business name and business position -- all filled out by Russell. But lines for credit and bank references were left blank. She allowed her National Bank of Commerce Visa card to be photocopied and submitted unsigned blank check number 1873 drawn on First Tennessee Bank.
Russell's signature appeared below a statement that she understood the casino was authorized to "verify any or all facts disclosed." But the money she received wasn't credit, Kirkscey said.
Because credit-extension is legal in Mississippi, it may appear an unusual argument. And it would be -- in a Mississippi courtroom.
But such credit gambling is not permitted in Tennessee and judgment was being sought in a Tennessee courtroom. Once Judge Bailey saw that the money obtained by Russell was borrowed for gambling, he disallowed enforcement of the debt. Kirkscey said that, in the future -- although it will be more expensive -- lawyers will sue in Mississippi and have their judgments registered in Tennessee using the U.S. Constitution's "full faith and credit" clause.
He also said he might appeal Bailey's ruling to the Tennessee Court of Appeals.
Kirkscey said he wanted to make sure Tennesseans understand they can't come to Tunica and write bad checks without consequence.
Russell's lawyer, Lawrence R. White, said he hoped the ruling would act like a "speed bump," but also send a message to the casinos to stop lending money to people like his client, a compulsive gambler. He likened it to a heroin dealer giving a first fix for free.
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