Seeking Payback
by Kimberly Maxson Rushton
Columns
Seeking Payback
Nevada Casinos have the law on their side with regard to the collection of outstanding debts and markers
Kimberly Maxson-Rushton is a member of the Casino Law Department of the Atlantic City/Las Vegas law firm Cooper Levenson (www.cooperlevenson.com). Rushton is the managing partner of Cooper Levenson’s Las Vegas office. In addition to her gaming law practice, she also handles corporate and legislative matters for clients of the firm. She can be reached directly at (702) 366-1125 or by e-mail at krushton@cooperlevenson.com
When you think about the amount of money businesses spend on collecting outstanding debts you realize that those costs are ultimately passed on to consumers. Now imagine, if part of that cost could be borne by the government, and the culprit could be charged criminally. If your state relies on its primary industry to serve as its economic engine, chances are the legislature makes it a crime to draw and pass bad checks, as well as outstanding markers.
In Nevada it is a felony to intentionally draw a marker or pass a check with a value of $250 or more in order to obtain money, delivery or use of property, services, or credit extended by a licensed gaming establishment. Nevada Revised Statute (NRS) 205.130 et. seq. The original statutory scheme was promulgated in an effort to protect businesses from being victimized by dishonest customers purchasing goods or services knowing there were non-sufficient funds to pay for the costs incurred. In 1983, the statute was amended, to include “credit extended by any licensed gaming establishment,” primarily to provide criminal jurisdiction over otherwise untouchable international gamblers.
A useful tool
In large part the statute went unnoticed and rarely, if ever, used until the mid-1990s when various district attorney offices, and in particular those serving Las Vegas and Tahoe began receiving written requests for prosecution directly from casinos.
It has become such a useful tool in collecting outstanding debts and markers that many prosecutors throughout the state have a dedicated “bad check division” whose sole function is to charge and prosecute individuals who knowingly incur debts without the means to pay for them. In performing this function the district attorneys also provide businesses with preprinted signs reciting the specific statutory language and warning customers of the possible penalties.
Recognizing that most Nevada casinos have sophisticated systems in place to verify a patron’s credit and the ability to repay their makers, what they don’t have is the ability to predict when a patron’s financial situation may change once they leave the casino. Often the problem is compounded when the player with an outstanding marker is a foreign citizen. Collection efforts in those instances become expensive. Thus, it is convenient and effective to use law enforcement as a tool to accomplish the end result—collection of the money.
The process works well. A brief synopsis of how it works begins when a patron—having been issued a casino marker—leaves the casino without paying it off. Depending on the player’s rating and prior history with the casino, a reasonable amount of time is given to the player to settle the outstanding marker. Upon failure to do so, the casino issues a “10-day letter” similar in form and content to a sample letter provided by the district attorneys’ offices online. Once the ten-day period has passed, the matter is turned over directly to the district attorney, a criminal complaint filed and an arrest warrant issued. Rarely is the player, now named as a criminal defendant, arrested as, in most instances, the player pays the marker.
Not a foolproof system
The wrench in the system arises when the player, having been charged with a criminal offense, hires an attorney for the sole purpose of prolonging the process, versus attempting to resolve the financial obligation owed to the casino.
In Las Vegas, the criminal defense bar is notorious for quickly quashing the arrest warrant and requesting multiple continuances claiming that the patron is attempting to work out a payment plan with the casino. The objective in seeking to have the arrest warrant quashed is to enable the player to freely travel (and secure markers at other licensed gaming properties) while making only nominal payments on the outstanding marker, which often exceed hundreds of thousands of dollars.
In instances such as this, over the objection of prosecutors, the warrant is quashed, based on the defense argument that the case is a “victimless crime” or merely a monetary crime. Thus, the statutory intent is circumvented by the perception of the “deep pockets” of the casino industry in comparison to the proclaimed poverty of the player.
While shortfalls of this otherwise effective collection tool exist, in large part, Nevada’s judiciary recognizes that the statute provides relief to businesses in the state. In an attempt to establish itself as a corporate-friendly state, Nevada’s adoption of the “bad check” statute is but one of the many assurances that businesses will be protected from criminal elements, in particular those who intentionally set out to commit acts of fraud.
