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Should Casinos Stop Gambling Addicts?

About The Author

Jade Rigby (Writer)

Jade is a third year Law student at Newcastle University. She is currently completely an Erasmus year abroad at Universitat Pompeu Fabra in Barcelona, Spain, and will return to Newcastle in 2015. Jade is predominantly interested in commercial law, but also writes on criminal and private law topics.

Gambling takes place in a variety of forms; we probably do not realise how often we actually do it. Most high streets are home to at least one betting shop, millions of people take part in lotteries, and most of us will admit to spontaneously buying a scratch card from time to time. However, there are concerns that the “natural high” caused by the “anticipation and thrill of gambling… can become addictive.”

A gambling addiction can be very dangerous indeed. NHS statistics suggest that as many as 450,000 people in the UK today are gambling addicts. This figure is worrying because of the links between gambling and alcohol abuse, depression, suicide attempts, and criminal activity.

So whose responsibility is it to stop addicts from gambling? In The Ritz Hotel Casino Limited v Noora Al Daher [2014], a recent High Court case involving The Ritz Casino and the wealthy wife of Oman’s foreign minister, His Honour Judge Seys Llewellyn had to consider whether the casino owed Mrs Al Daher a duty of care to prevent her from continuing to gamble there.

Case Summary

Mrs Al Daher lost £2 million in one evening whilst she was gambling at the Ritz Casino in Piccadilly, London. She only paid half of her debt. Following the Casino launching a claim to recover the rest, Al Daher launched a counter-claim and argued that she should in fact recover the £1 million that she had already paid.

On the evening in question, Mrs Al Daher, a “woman of great wealth”, had signed and given cheques in return for gambling chips. The Casino has a cheque limit of £1.7 million for each player. After a few hours, however, Mrs Al Daher had reached her £1.7 million cheque limit whilst gambling.

At Mrs Al Daher’s request, her limit was extended to £2 million. She then proceeded to lose the additional £300,000.

The principal issues at stake were:

  1. Whether the system or arrangement between the Ritz casino and Mrs Al-Daher was one by which the Ritz casino granted credit, and if so should the Casino be barred from recovering the sums because of illegality?
  2. Whether the Ritz casino was under a duty of care towards Mrs Al Daher, on the basis that they knew or should have known that she was a gambling addict, either prior to that evening or by reason of what happened on that evening, and if so were they in breach of that duty?

Illegality: Granting Credit

The Gambling Act 2005 governs gambling.

Section 81 (2) of the act provides that:

A non-remote casino operating licence or a non-remote bingo operating licence shall by virtue of this subsection be subject to the condition that the licensee may not:

(a) give credit in connection with gambling.

Section 81 (4) defines what is meant by credit for the purposes of the section:

In this section, "credit" includes

(a) any form of financial accommodation, and

(b) in particular, the acceptance by way of payment of a fee, charge or stake other than

(i) cash,

(ii) a cheque which is not post-dated and for which full value is given", or

(iii) a debit card payment which is not post-dated and for which full value is given.

The High Court noted that:

... [P]articularly in the case of high value players, the Ritz casino, like other London casinos, may accord the player a cheque cashing facility, ‘CCF’. This permits a player to pay by cheque, as opposed to cash, bank transfer or debit card. Provided a member has a CCF with the Ritz casino, the casino will accept cheques from that member up to the limit of the facility, in exchange for chips enabling the member to play. Mr Marris, Chief Executive of the Ritz casino, deposes that the cheques accepted cannot be post-dated and must be forfull value.

Counsel for Mrs Al Daher argued that the Casino had extended credit to the claimant, essentially contending that the cheque was merely a security for a loan, through three possible constructions:

(i) this shows that the cheque is taken as a conditional cheque only, and/or as security for later payment of any losses under gaming which takes place immediately; and/or (ii) there is thereby an "accommodation" to her, in that it was intended that the cheque be cashed only if she lost; and/or (iii) the cheque was not "for full value" in that they acted merely as security pending settlement at the end of play when the obligation to pay for the chips might not arise.

This argument was rejected for a variety of reasons. Judge Llewellyn considered that the 2005 Act, “as a matter of purpose and policy”, balances two interests:

It expressly recognises gaming as a proper and lawful activity, where it is for the individual to choose to engage in or refrain from participating in it…Equally its prohibition of credit is intended to ensure that an individual should not be permitted to gamble unless he has the means immediately to pay for the wager if he loses; since otherwise he may, or may be encouraged to, wager what he cannot afford to pay; hence the provision that "credit" does not include the giving of a cheque which is not post dated and is for full value.

Thus, when considering the wealth of Mrs Al Daher and 'the reality of the transaction, process, and actual recovery of payment', the Casino did not unlawfully give credit to the claimant. Indeed, Judge Llewellyn noted that:

In the present case, the signed cheque is given, and gaming occurs and is concluded, at a time outside banking hours when it is not possible to present the cheque for payment. No greater period of credit is given by waiting for the end of the session and then reckoning whether the player has lost or won.

Indeed, Judge Llewellyn dismissed further arguments relating to the illegality of giving credit in the present case by focusing on the practicalities and “realities of gaming”.

The decision to dismiss this ‘illegality argument’ appears to me to be a logical, sensible conclusion. Although it is admitted that Mrs Al Daher’s Counsel provided some persuasive arguments, one cannot ignore ‘common sense’. Indeed, it appears that, in this case, a rather technical interpretation of the law would have usurped the reality of the situation, and thus undermined the ideal of justice. Instead, by focusing on the aforementioned 'realities of gaming', the Court demonstrated a no-nonsense, logical approach.

Negligence: Owing Gambling Addicts A Duty of Care

Counsel for Al Daher further argued that the Casino had a “clear social responsibility”to stop, or encourage Mrs Al Daher to stop,continuing to gamble on the evening in question:

(Counsel) contends that the building blocks of the duty of care are assembled in particular from the following: (i) the Codes of Practice issued by the Gambling Commission under the 2005 Act; (ii) the special relationship where one party assumes or undertakes a responsibility to another; combined with (iii) the policy or policies of the Ritz casino itself; (iv) the evident and substantial rise in the limit of the CCF permitted to her by the Ritz casino; and (v) what was or should have been noted by the managers and staff of the Ritz casino on the evening of 3 April itself.

Hence, Mrs Al Daher’s case rested on the contention that the Casino derogated from their social responsibility to stop, or at least try to stop, a potential gambling addict from losing a large sum in one evening. Additionally, Counsel argued that the Court should consider it 'wholly exceptional' for the Casino to increase a gambling limit by a sum of money as much as £300,000, 'not least in that this occurred on an occasion when the player is losing, and is under an internal pressure to relieve that loss by continuing to gamble in the hope of recovering it'. 

However, Judge Llewellyn considered that no authority supported the imposition of a duty of care in such instances. He went on to state: 

In my judgment, unless authority clearly supports such a duty the court should not hold that there was a duty of care upon the Claimant to restrain the Defendant from gambling either to the extent of her facility on 3 April 2012 or beyond it by the excess of £300,000 which she herself requested…In particular, I am not satisfied that in the light of the findings of fact in this case it is fair just and reasonable that the law should impose a duty in these circumstances to restrain the Defendant from using her facility, and requesting and accepting an excess of £300,000 on the evening in question.

Hence, the High Court found in favour the Ritz Casino and ordered Mrs Al Daher to pay all of her debt.

Critical Commentary

Whilst some of my previous work has also concentrated on the issue of imposing a duty of care (please see “Logic in Liability: Defending a Duty of Care”), the present case highlights the difficulties of applying the vague rules of liability in practice, and the threat of ‘blame culture’ that comes with that difficulty.

The argument that the Casino was to blame for Al Daher losses, due to their failure to prevent her from continuing to gamble, may have been optimistic. Al Daher had the physical ability to walk away from the Casino; additionally, it was noted that there were 'no signs of agitation' from Mrs Al Daher, and so staff thought that it was 'OK for her to continue'. To suggest that the staff had to take control of a woman who appeared to be in control of herself is a rather paternalistic argument. Such an action would contravene common sense.

Similar issues can be found in the American ‘McDonald's’ Lawsuits, which have been described as 'frivolous'. U.S. District Judge Robert Sweet held that 'If consumers know (or reasonably should know) the potential ill health effects of eating at McDonald's, they cannot blame McDonald's if they, nonetheless, choose to satiate their appetite with a surfeit of supersized McDonald's products'.

One can agree that the persuasive ‘common sense’ argument can be applied in both the present case and the McDonald's litigation. As Al Daher had been gambling continually since the 1990s, spending millions of pounds at various Casinos across the world, she must have been aware of the financial and long term health effects of gambling over such an extended period of time.

Additionally, it is not clear how the ‘duty of care argument’ would operate if Mrs Al Daher had won a large sum of money. Would this duty extend to ensure that winnings were not gambled away? Clearly, this paternalistic notion would seem to ignore the idea of personal responsibility and common sense.

Moreover, one must consider how the imposition of a duty of care in this case may have far-reaching effects. Imagine, for example, if bartenders had a duty of care to refuse alcoholics from drinking excessive amounts of alcohol. It may be very difficult to suggest that it is fair, just and reasonable to impose a duty of care in a gambling situation, but not so where alcoholics are concerned; in both cases, someone provides an addict with the object of their addiction, possibly for their own financial benefit.

Some may argue that alcohol levels can be measured objectively, thus providing the Court with a numeric scale along which they could judge the level of addiction, but this in itself may cause practical problems. It is difficult to impose a duty of care in such a flexible fashion; if someone has only just reached the level of ‘alcoholic’, should they really be treated differently to those who are just under such a level, or those who have been an alcoholic for a longer period of time? This uncertainty could certainly cause an injustice if the imposition of a duty of care was flexible to this extent. Crucially, therefore, it would seem that accepting Counsel’s ‘duty of care argument’ could lead to unintended, and unfair, results. 

However, that is not to say that Counsel was opportunistic to raise this argument. Lawyers must explore the limits of the law in order to best protect their clients. It is not a criticism, therefore, that Al Daher’s Counsel mounted a negligence issue. The law is not static, and so lawyers must investigate how ‘grey areas’ may work for their clients. Indeed, providing some persuasive authority may have encouraged the Court in this case to entertain the argument to a greater extent.

So did the Court reach the right conclusion? It appears to me that a common sense approach to the negligence issue was by far the best solution. Gambling addicts should not be able to evade the consequences of their actions by shifting the blame onto casino staff. Although addicts should be encouraged to face their addictions and the problems that are linked to them, widening the net of liability may only serve to impede the autonomy of the individuals and damage the gaming industry, which is also enjoyed by non-addicts. 

Further Reading

Shane Hickey, ‘Ritz Casino Wins High Court Battle to Recover £1M from Gambling Addict

Arabian Business, ‘Saudi Heiress Ridiculed by Judge in $3m Ritz Gambling Case

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Tagged: Commercial Law, Tort Law

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