Las Vegas Sun

December 10, 2018

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Bet. Lose. Cut. Run!

Every year, the Strip's biggest casinos - the ones that cater to the whales and other high rollers - loan huge amounts of cash to keep some gamblers betting.

It's a calculated risk, because sometimes the players lose that money and skip town or even the country without paying their markers.

The casinos, claiming tens of millions in lost revenue, regularly file claims against these gamblers in the local and federal courts to recoup their losses. This stream of lawsuits accounts for a small but steady percentage of all the civil cases filed in Las Vegas.

In one case , filed in June, Caesars Palace sued Thai gambler Suchart Arnupavatham, claiming that it had advanced him $4 million in markers, that he gambled and lost it all, and that he then fled to his native country without paying the casino a dime.

Arnupavatham took the money out in four separate markers - $1.9 million, $1.5 million, $500,000 and $100,000, according to the June 29 suit filed in U.S. District Court in Las Vegas.

Not all of the claims are that large, of course. But a search of federal court records involving suits filed by just one of the Strip's major players - Harrah's - shows that it isn't about just chump change.

From Jan. 1 through Tuesday, five of Harrah's seven Las Vegas casinos - Caesars Palace, Bally's, Paris Las Vegas, the Rio and Harrah's Las Vegas - and their related Harrah's subsidiaries sued gamblers in federal court 29 times in unpaid marker cases. The amount sought, which includes the suit against Arnupavatham, was $9.28 million, according to electronic court records.

Ten of the suits were filed against American gamblers from Texas, Illinois, Florida and, mostly, from California; 16 others targeted foreign-residing gamblers from such places as Singapore, Taiwan, Italy and Egypt. The three remaining suits were brought against the estates of gamblers who had died after running up their debt.

But that's just part of the story. The $9.28 million doesn't count the suits Harrah's has filed so far in 2006 in state courts, where cases must be filed when the amount allegedly owed is less than $75,000.

Nor does it include all the federal and local complaints filed by MGM Mirage's casinos, and all the others in Las Vegas - likely for millions and millions more.

Many of the Harrah's gamblers had been paying off their debts in small installments, but then stalled, according to the complaints. Casino officials say they favor collecting money that way, rather than through the courts.

"Although we prefer to resolve guest credit issues outside of the courts, sometimes we must pursue collection of unpaid debts through legal action - just as any company in any industry does as a standard business practice," said Harrah's spokesman David Strow, who declined to comment further.

MGM Mirage spokesman Alan Feldman wouldn't discuss the number or dollar value of suits filed by his company, but did say that the overwhelming majority of players settle up before leaving town.

"In those rare cases when we are unable to collect on an outstanding marker, legal action may be necessary," he said. "Considering the millions of customers in our database, the number resulting in legal action is exceedingly small."

Feldman added that company executives keep a provision for bad debt in each quarter's report to shareholders, but that "when considered in light of our total revenues, the amounts that remain uncollected are relatively small."

In 2005 Strip casinos reported a total win of about $6 billion.

Unpaid marker cases also can wind up in the Bad Check Unit of the Clark County district attorney's office. In Nevada, casino markers are treated as checks.

The unit is a self-supporting entity, funded in significant part by the varying percentage it collects from prosecuting casino marker cases.

According to a 2002 audit of that unit from the Clark County internal audit department, complaints from casinos make up about 10 percent of the total number of bad check prosecutions the unit undertakes, which in turn provides 50 percent to 60 percent of the monthly revenue generated for the unit.

In 2002, according to the audit, about 5,200 complaints to prosecutors ended up generating $11.2 million to $13.5 million for the casinos.

Feldman says MGM Mirage files complaints with prosecutors only when officials have a "good-faith belief" that the customer violated Nevada's bad check law - knowingly executing a marker without available funds to honor it or never intending to repay the money advanced.

"An extremely small amount are referred to the DA's office," Feldman said.

Robert Langford, a local defense attorney, filed a suit against the unit in January, claiming that its self-funding nature was unconstitutional because casino cases were pursued more aggressively than others, and therefore defendants' due-process rights were being violated.

Chief Deputy District Attorney Bernie Zadrowski, who heads the unit, declined to comment. But he told a Sun reporter earlier this year that his unit followed the law, and that any claims of selective prosecution were "hogwash."

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