March 2016 – D|J|P’s Las Vegas litigation team was successful in securing a Ninth Circuit Court of Appeals decision affirming that casino credit instruments, commonly known as casino markers, are valid and enforceable by legal process.
In Morales v. Aria Resort & Casino, LLC, the debtor applied for and received $500,000 in gambling credit at the Aria through the issuance of casino markers. Following standard practice, Morales completed a credit application. He also signed seven markers totaling $500,000. The date and banking information were left blank. During his visit to Aria in May 2010, Morales lost $500,000. Shortly thereafter, he departed for his home without paying the debt. Aria completed the required information, including the date and bank information, and presented the markers. The bank returned the markers for the reason that the account was closed. Morales sued Aria alleging various contract and tort theories. Aria counterclaimed seeking recovery of $500,000 for the unpaid casino markers. The trial Court granted summary judgment for Aria on all claims.
Notably, the appellate decision states: “the primary object of the parties’ credit agreement [was] the loan of money and the repayment of that money…These are the only facts material to whether Aria was entitled to summary judgment, and Morales has not put any of them into dispute.”
This case is extremely important because it provides casinos a shield against potential defenses by players that the credit application and instruments do not independently create a duty to pay. As the District Court notably stated: “[M]arkers are merely instruments for collection on a gambling debt, as distinct from the debt itself, and redeeming a marker is not the only means by which a gambling establishment may seek to collect on an outstanding debt.” The Court was not persuaded to follow Morales’ arguments that the casino’s purported irregularities in enforcing the instruments absolved him of liability. Such language seems to broaden at least this Court’s reasoning concerning the enforcement of gaming debts in Nevada. (Craig S. Newman, Anthony R. Ager)