Debtor's prison alive and well in Nevada

An interesting article in the LVRJ today about a guy sentenced (he wasn't actually sent to prison, he got probation, but they could have sent him away if they had wanted to) for not paying his casino markers. Apparently there is a Nevada statute that makes this a crime. This would seem to be unconstitutional and fly in the face of our common law tradition that makes gambling debts unenforceable. Even the prosecutor thinks the law stinks. Unfortunately, the law has been upheld by the 9th Circuit. I guess this is a good warning for any of us tempted to use markers. Here is the link:

http://www.reviewjournal.com/lvrj_home/2003/Mar-12-Wed-2003/news/20870166.html

In typical casino fashion, it's called "credit" when they offer it to you, and even called "credit" in their brochures which explain the "benefits" of using it and urge you to "apply" for it.

But if you don't or can't pay, it's a "bad check," which becomes criminal -- an entirely different animal from an unpaid bill.

Disgusting.

But the guy probably got stuck with a public defender, so...

Yes casino markers are not considered debt instruments, but are basically checks. If you don't pay them off, it is legally the same as writing a bad check. That is a criminal offense in every jurisdiction that I know of.

It is surprising that casinos can get away with this. I get these letters from casinos periodically encourage me to "apply for credit". The form says :Credit application". It doesn't say "Check-cashing privileges".

I do think that casino debts should be treated just like other debts, and not subject to this special privilege. Ironically, I think this practice arose because at one time gambling debts were not legally enforceable. Therefor the casinos did not issue credit, but instead 'accepted checks" from the players.

it is readily apparent that it is a draft that is, in legal parlance, a negotiable instrument, the same as a check, money order, funds transfer advice, etc. - if you bother to read it closely, you'll even see where there is a statement typed on it whereby you expressly represent to the casino that you have sufficient funds on deposit in your account to cover the marker at the time you sign it, which allows the casino to claim you made a false representation to it if the draft bounces when presented to the bank - for that reason alone,bankruptcy courts have held that obligations created by casino markers can not be discharged in a Chapter 7 bankruptcy case and you will still owe the casino even if you file for bankruptcy if the casino objects to the discharge of its claim

I don't cry for those walking their markers - in my experience, casinos bend over backwards to give their "credit clientele" time and opportunity to pay off their markers and submit them to the prosecutor only as a last resort - casinos are much more liberal with payment terms than the local bank, finance company, pawn shop, or loan shark - the deadbeats who wind up with charges filed against them usually have told the casino to go to hell cause they ain't paying and have not made a good faith effort to clear the markers - and, while I'm on my moral soapbox, every seasoned poster on this board admonishes against playing with funds you can't afford to lose or don't have - lets remember that markers should be used as a mechanism to avoid carrying large amounts of cash and not as a means to gamble with the casino's money - and, finally, the prosecutor office doesn't like these cases (unless they involve very large amounts) cause they bog down his office and take time away from the more heinous crimes and they view themselves as being used as a debt collecting device - they don't like true "hot check" cases for the same reason

In the jurisdiction where I practice casino gmbling has been legal for just over ten years and it is prohibited for the local casinos to give credit. In order to get around this prohibition, the casinos accept checks with reckless abandon, I believe knowing, in some cases, that the gambler does not presently have sufficient funds to cover the check. for aperiod of time the local prosecutors were prosecuting the checks as a normal bad check case; ie one given to the grocer or gas station. After awhile, they gave up due to the large numbers overwhelming them and probably because of moral qualms about being casino collection agents. Such debts, bad checks to casinos, are routinely forgiven in Chapter 7 proceedings, without an objection from the casinoa. As Dallas Barrister said, the debts could be challenged in the bankruptcy court, but to my knowledge, no local casino has done so to date. Perhaps they don't want to risk an adverse ruling finding no actual fraud. On the other hand, I've seen Nevada casinos file discharge esception proceedings in our Bankruptcy court to enforce their markers. In the case I am most familiar with involving about a million dollars owed to MGM and PPE, the bankruptcy litigation was accompanied by a Clark County, Nevada prosecutor's threat of prosecution. Of course the debtor made a deal to repay.

needs to be made - in every case I have seen, the casino and/or the Clark County district attorney's office gives the patron ample notice that charges will be or are being filed and ample opportunity to make repayment arrangements to avoid same - point being, most of these cases that make it to court are against people who either ignore those warnings or are unwilling to make the necessary arrangements to settle up

Writing a bad check with knowledge that there are not sufficient funds to cover it is indeed a crime. As it should be. It is form of fraud. But I will wager that very few people who sign a marker are aware that it is legally the same as writing a check, and therefore it cannot be said that they are trying to defraud the casino in the same fashion. I believe most people think it is legally a loan, non-payment of which does not land you in jail. The distinction is very important.

IMO, the casino industry has a duty to tell its customers this when they issue a marker. IMFO, this is not about to not happen. Therefore, it is incumbemt upon the Nevada legislature to pass laws requiring casinos to so inform their patrons of the possible perils of not paying a marker. Guess what my opinion is on the probability of this occurring?

Regards,
adhoc

Write a bad check and

1) You go to prison for 1-5 years.

2) We charge you a $500 fee.

3) It comes out of your prison pay.

... but I think the average chump will interpret it to mean their own check they cash at at the cage, not a marker. Generally, a marker is taken out in the pit, where I'm sure no such sign is present.

Curious as to what casino this is. Care to reveal it?

I think I agree with you have said here. I thought that was clear form my post. But I am asking because your subject line "Yeah But ... " makes it sound like your disagreeing with me. Perhaps I did not make myself clear in the post above?
Now I would like to comment on one thing that you said:

IMO, the casino industry has a duty to tell its customers this when they issue a marker. IMFO, this is not about to not happen. Therefore, it is incumbemt upon the Nevada legislature to pass laws requiring casinos to so inform their patrons of the possible perils of not paying a marker. Guess what my opinion is on the probability of this occurring?

I think there is a very low probability of Nevada doing this. But I do not understand why this is not covered by existing Federal laws. In particular, there is a Federal "Truth in Lending Law". As I mentioned in a post above, I have right now in my hand a solicitation from an LV casino to apply for "casino credit", which tells me that I "30-days with no interest" to pay off my markers.

This is clearly a proposal. If I buy a car or a computer under these conditions, it is considered a loan under Federal Law. Why is that casino loans can be treated differently?

The tactic of having disclaimers in Fine Print has been completely discredited in financial transactions. In every place but casino credit.

I really think you are out of to touch with reality on this. The average consumer does not have a law degree! They should not be required to hire a lawyer to explain the fine points of a simple transaction to them.

Sales-people lie through their teeth. They routinely try to misrepresent the realities of transactions. That is why we laws to protect consumers from this.

To come back to my point ... are you saying that any creditor should be able to put debtors into prison simply by putting into their fine print a clause "whereby you expressly represent ... that you have sufficient funds on deposit in your account to cover " the debts.

I think that if you offer somebody "credit" in very bold terms, you should not be able to call it a check by putting in some fine print :this is not really credit."

I will go further. I think consumers in casinos are more vulnerable than people buying car or VCRs, etc. and should be given more protection, rather than less.