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`I. Nelson Rose a1
`
`Copyright (c) 1993 by the Hastings College of the Law; I. Nelson Rose
`
`Table of Contents
`
`I. Spread
`
`II. Indian Gambling
`
`III. Debts
`
`IV. Winners and Losers
`
`V. Taxes
`
`VI. The Bizarre
`
`VII. Limits
`
`*94 Introduction
`
`The largest and fastest growing segment of the entertainment industry is legal gambling. 1 In terms of sales, legal gambling
`dwarfs every other form of entertainment. For example, in 1992, Americans spent $4.9 billion at movie theater box offices. 2
`By comparison, in 1991, the thirty-five operating state lotteries sold $20.9 billion in tickets. 3 Add in parimutuel betting on
`horses, dogs, and jai alai; casinos and slot machines; sports bookmaking; card rooms; and charity and Indian bingo. The total
`annual amount bet legally in this country is conservatively estimated to be $294.6 billion. 4
`
`As recently as two hundred years ago, gambling in America was considered a sin—a topic that could not be mentioned in polite
`society, except to be condemned. The word “gamble” itself was regarded as slang in the 18th century as “a term of reproach,”
`while “gambler” originally meant “a fraudulent gamester.” 5 The treatment of the gambler by the law and by society followed
`naturally: if gambling were viewed as something unholy, the gambler deserved to be condemned, although sometimes with
`pity, and consigned to Hell.
`
`In the 19th century, religious feelings began to die down; gambling came to be viewed not as a sin, but as a vice. This difference
`is significant: gambling could now be discussed, under proper circumstances, much as prostitution can sometimes be discussed
`in “proper society” today. *95 More importantly, the gambler was viewed not as fallen in the eyes of God, but as weak. Of
`course, a man (and in rare cases, a woman) who gambled to excess, having given in to the vice, was viewed as deserving
`whatever misfortune befell him (or her).
`
`GSN Ex. 1006
`GSN v. Bally Gaming
`U.S. Patent 5,816,918
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
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`GAMBLING AND THE LAW—UPDATE 1993, 15 Hastings Comm/Ent L.J. 93
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`The view of gambling as a vice is still the dominant one in the law of the United States, especially the common law. Even
`while legal gambling spreads throughout the country, the public policy of virtually every state makes legal gambling debts
`unenforceable, treating a casino marker the same as a contract for prostitution. 6 As with prostitution, the law punishes the
`illegal gambling operator for exploiting the weaknesses of his customers. A bettor is not often seen as committing a crime,
`even though it takes two to make a wager. 7
`
`A new view of gambling is coming into direct conflict with the old. Helped in part by the advent of state lotteries (where
`the state itself is promoting gambling), gambling is increasingly viewed as merely another form of entertainment. But legal
`gambling runs head-on into the majority view that gambling is a vice. In Nevada, for example, the only legal businesses that
`cannot generally advertise are licensed casinos and brothels. 8
`
`The first wave of legal gambling began with the earliest settlements of America, funded, in part, by lotteries, and lasted through
`the 1820s and 1830s. 9 The English practice of banning rowdy houses while allowing lotteries for worthy causes was carried
`over into the United States. 10
`
`Feelings against gambling games ran so strongly in the Massachusetts Bay Colony that the possession of cards, dice, or gaming
`tables, even in private homes, was outlawed. 11 On the other hand, lotteries, both government approved and private, were not
`only allowed, but actively encouraged during the colonial period. This era of widespread *96 legal lotteries ended with the
`spread of Jacksonian morality, aided by numerous well-publicized scandals. 12 During this period, the first federal anti-lottery
`laws were adopted. 13 By 1862, Missouri and Kentucky were the only states that had not banned lotteries altogether. 14
`
`The Civil War and the expansion of the western frontier brought about the second wave of legal gambling. The states of the
`old South needed a way to raise money to rebuild their devastated economies; they turned briefly to lotteries as a voluntary
`tax. 15 However, the great Louisiana Lottery scandal of the 1890s led to the passage of strong federal anti-lottery laws 16 and
`a complete prohibition of state lotteries for seventy years, until they were reintroduced by New Hampshire in 1963. 17
`
`Throughout the Wild West gambling was often legally tolerated, since it was effectively impossible to outlaw this common
`diversion. 18 When the frontier developed it was common to see gaming, both casino and round games such as poker, being
`played openly, although whether these games were technically legal was not considered a major issue at the time. Often the
`gaming houses were made legal, so that governments could raise revenue through licensing, and to avoid the problem of having
`criminal statutes on the books that no one obeyed. 19
`
`Eventually, the casino games were outlawed, although poker was allowed to continue virtually uninterrupted. The rise of
`Victorian morality, scandals, and the desire for respectability brought the second wave crashing down in the West. 20 Soon,
`only Nevada and the territories of New Mexico and Arizona remained as outposts of casino gambling. 21 Even Nevada and the
`last territories of the Wild West outlawed all forms of gambling shortly after the turn of the century. 22 At the same time, *97
`betting on horse races fell into disfavor and the tracks were closed; by 1910, only Maryland, Kentucky, and New York were left,
`and in that year New York closed down its racetracks. 23 The United States was once again virtually free of legalized gambling.
`
`The third wave of legal gambling began with the Great Depression. Nevada re-legalized casino gambling in 1931. 24 Twenty
`states opened racetracks with parimutuel betting in the 1930s, 25 followed by additional states legalizing parimutuel betting in
`every passing decade. 26 The big boom began with the first legal state lottery opening in New Hampshire in 1964. 27 Today,
`the majority of the states have legal state lotteries and racetracks, with betting on horse races, dog races, and jai alai. Social
`gambling has been decriminalized in many states, although often only in practice, not in law. In addition, charity gambling is
`the rule, not the exception, and it is virtually impossible to keep up with the various proposals for additional legalization being
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
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`discussed in every state. 28 These developments mark an important change in public policy from nearly complete prohibition
`to grudging permission.
`
`But the early 1990s saw another tidal change taking place. Public policy in this country is undergoing a subtle, but enormously
`important, transformation. Government no longer merely allows some forms of gambling to exist—it now actively promotes
`gambling. 29 This difference is significant, particularly as it affects established forms of gambling. Given their enormous
`resources, billions of dollars, and millions of people, state operators can effectively wipe out casinos and racetracks. For
`example, the states themselves are entering the casino business. The Oregon State Lottery has on-line keno and video poker
`machines in thousands of bars 30 and sports bets on National Football League games. *98 These games are deemed quasi-
`casinos; “quasi” only because a trial court ruled that the games do not violate the state constitution's prohibition on casinos. 31
`Other state governments are interested in operating their own casinos, with blackjack, craps, and slots. Provincial lotteries in
`British Columbia and Manitoba already operate full-scale casinos, and Ontario has proposed opening casinos near America's
`largest cities. 32
`
`Even without casinos, state lotteries are formidable enterprises. Casinos in Atlantic City had a combined net loss of over $250
`million in 1990. 33 However, state lotteries showed a combined net profit of about $8 billion. 34 Undoubtedly, more people
`buy lottery tickets every year than visit casinos, racetracks, and cardrooms in this country. Once the state itself operates the
`biggest game, government is in no position to deny requests for other forms of legalized betting.
`
`This opportunity has not gone unnoticed by the investment community. The best performing stock on the New York Stock
`Exchange in 1991 was WMS Industries, up 607% for the year. 35 Other winners were those involved in the startup of Indian
`and riverboat gambling. 36 Spectacular returns will likely continue, until a particular local market becomes saturated, as is
`already happening in Iowa. 37
`
`*99 I
`
`Spread
`
`In the 1990s, it is the general belief that anyone, including any government, can get rich quick by owning, operating, or taxing
`some form of legal gambling. In other words, we are in the midst of a classic speculative bubble.
`
`For connoisseurs of mass money manias, the current craze is more like the South Sea Bubble in England than the Dutch
`Tulipmania. In the 1720s, the government of England actively promoted companies' exploitation of new opportunities created
`by the opening of the tropics, the “South Seas.” In the 1630s, however, the Dutch craze for trading in tulip bulbs was purely a
`runaway market; the government played no role. 38 Today, state governments, as well as individual entrepreneurs, are trying
`to bring in Video Lottery Terminals or riverboat casinos.
`
`As in the 1920s, the dream of instant, unending riches is not limited to Americans. Canada, Australia, and Europe have caught
`the legal gambling bug as bad or worse. And nothing compares to the percentage growth of lotteries, casinos, and parimutuel
`betting in the newly-freed former Soviet bloc.
`
`Unlike tulip bulbs, legal gambling can, in fact, generate revenue. But in the face of direct competition, revenue will not be on the
`scale imagined. Not every town can become the next Las Vegas. Consider the difference between the only legal casino on the
`East Coast and an Iowa riverboat with a five dollar limit, only a ten-minute drive from an Illinois riverboat with unlimited stakes.
`
`The advent of riverboat gambling probably fueled the current craze. National television coverage of the picturesque Iowa casino
`riverboats opening on April 1, 1991 brought the image of wholesome legal gambling into the minds of voters and politicians.
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` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
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`The “big news” for legal gambling was the continued spread of casino gambling onto riverboats, into mountain towns and
`Indian reservations, and through Video Lottery Terminals into thousands of bars and restaurants throughout the country. This
`was actually old news, since the enabling statutes were passed in prior years. The real big news was the passage of more laws,
`which will lead to a nationwide explosion of state-sponsored gambling.
`
`Why the rush to legalize gambling?
`
`Imagine Prohibition has just been repealed. The owner of the first, and only, liquor store in the entire state will make a fantastic
`return on *100 his or her investment. But soon, if there are no government controls, there will be a liquor store on every corner.
`
`Government makes the situation worse. The fantasy that there is an endless supply of cash available, an infinitely elastic demand
`for this now legalized vice, hits local politicians harder than entrepreneurs. Sin taxes are always the easiest to raise. 39 So, while
`oversupply has caused half the liquor stores to go bankrupt, the state is raising the tax on liquor.
`
`Only one thing could make the situation worse, and it happens. A misguided entrepreneur, often someone who has made a lot of
`money in another line of business, says, “I will build the biggest, best liquor store ever, with an amusement park and train rides.”
`
`This is exactly what has happened, only the item that had been prohibited is gambling, not alcohol. Resorts International opened
`the first legal casino on the East Coast on May 26, 1978, spending $45.2 million to refurbish the old Chalfonte-Haddon in
`Atlantic City. 40 Its first year gross revenue of $224.6 million made it the most profitable casino in the world. 41 The state of
`New Jersey, for merely allowing the casino to open, collected $18 million from its new casino tax that first year. 42
`
`Twelve more casinos quickly followed. The Taj Mahal, the thirteenth and last, cost over $1.1 billion. 43 Seven casinos,
`including Resorts and the Taj Mahal, have subsequently gone into bankruptcy. 44 These failures, however, have not stopped
`state governments from jumping on the gambling bandwagon.
`
`In 1991, Louisiana passed its Video Draw Poker Devices Control Law. 45 The law purports to put “gray market” machines out
`of business. This it will do, while allowing slot machines in every bar in the state. *101 Riverboat casinos are also coming to
`Louisiana. 46 Land-based casinos in New Orleans cannot be far behind. 47
`
`Many states with a river or bay have considered riverboat casinos. For the most part, the idea has been voted down; however,
`it has passed the Missouri legislature and was approved by the state's voters in the November 1992 general election. 48
`
`Mississippi does not have a state lottery, and that state's supreme court only recently ruled that charity bingo is legal. 49 However,
`this state in the heart of the Bible Belt now has riverboat gambling. 50 The state has taken the idea of camouflaged casinos to
`the ultimate. The Attorney General recently ruled that the new riverboat casino law does not require the boats to have either
`engines or crews as there is no requirement that the boats be able to leave the dock. 51 In September 1992, the Casino Magic
`Casino opened in Bay St. Louis, Mississippi. Built on permanently moored barges merged into a land-based reception area, it
`gives no hint to gamblers that they are over water. 52
`
`This latest surge, gambling in riverboats, low-stakes mountain towns, and in other casinos by subterfuge is only a transition
`phase. Already, the real game is beginning, with multi-billion dollar proposals for land-based casino resorts in Chicago,
`Connecticut, New Orleans, and elsewhere. 53 When there are high-stakes casinos open off Lake Michigan, what Chicago
`resident is going to drive for hours to play five dollar blackjack on a boat in Iowa?
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`The South Dakota 54 and Oregon 55 state lotteries opened the door to video poker in other states. The Attorney General of West
`Virginia ruled that video machines in Mountaineer Park racetrack are legal under *102 that state's lottery law. 56 In addition,
`Oregon's keno looks like a winner that is ripe for copying. Although the machines are not yet in place, the Attorney General of
`Rhode Island ruled that the state's lottery also can operate keno machines. 57
`
`Casinos in Deadwood, South Dakota were only a partial success, but Colorado's low-stakes casinos in Central City, Black
`Hawk, and Cripple Creek hit an instant jackpot and have started the mountain states falling like dominoes. There were twenty-
`six additional Colorado cities on the November 1992 ballot, and a movement is growing to put slot machines in airports. 58
`Colorado's two Indian reservations are asking for compacts for higher stakes games. 59 Wyoming has an initiative to allow
`a local option for twenty-five dollar (instead of five dollar) blackjack, poker, and slot machines. 60 Initiatives are circulating
`for signatures to legalize high-stakes casinos in Arizona and Adelanto (a town in the high desert of California). In addition, a
`California assemblyman has submitted a bill to amend that state's constitution to allow competitive casinos within ten miles
`of the Nevada border. 61
`
`Foxwoods, a large Mashantucket Pequot Indian casino, recently opened in Connecticut, 62 and other tribes in that state, New
`York, and New Jersey are attempting to obtain federal recognition. In response to Foxwoods, the state of Connecticut is
`considering opening its own casinos. 63 As this article goes to press, Connecticut is again in the news. The governor announced
`that he has signed an agreement giving the tribe *103 the exclusive right to run slot machines in return for payment to the
`state of $100 million per year. 64
`
`There are more casinos in Minnesota than in Atlantic City. At last count, there were fourteen full-scale Indian casinos in
`Minnesota, with 4,700 slot machines and 260 blackjack tables, 65 and many more in Michigan, Wisconsin, South Dakota,
`Washington, Iowa, and North Dakota. With 135,000 square feet of gaming space, the casino at the Shakopee-Mdewakanton
`Reservation in Minnesota is one of the largest casinos in the world. Compact negotiations and litigation continue in Florida,
`California, Arizona, and virtually every other state that has a recognized tribe and legal gambling.
`
`The future is foreshadowed by a recent opinion by the Attorney General of Kansas. This opinion states that legalizing a state
`lottery means that the state's tribes can demand the right to operate “any game involving the three elements of consideration,
`chance and prize,” including, specifically, casino games. 66
`
`The announcement by Nevada and New Jersey casino corporations that they have signed contracts to manage Indian casinos 67
`is not a surprise. The major players, casino corporations and slot machine manufacturers, are waiting only for a firm set
`of regulations from the National Indian Gaming Commission. In a few years most of the large Indian operations will have
`professional, established companies managing the games.
`
`The federal government is also now promoting legal gambling. In 1991, the U.S. Attorney General issued a directive greatly
`restricting “day-trips to nowhere” cruises into international waters for the sole purpose of opening on-board casinos. 68 By
`requiring the ships to have overnight accommodations for all passengers, the directive effectively put *104 many companies
`out of business. 69 Congress responded to the Attorney General's directive by passing the United States-Flag Cruise Ship
`Competitiveness Act of 1991, 70 which will open up gaming on American flag ships in international waters. The law still has
`some significant restrictions, such as allowing a state like California 71 to decide whether it will prohibit gaming on ships going
`from one port to another within the state. In fact, the Act does not directly address the Attorney General's concern, since it did
`not amend the Gambling Ship Act, 72 in that ships still cannot be used for the principal purpose of gambling. President Bush
`signed the Act into effect in March 1992, which means that casino games will soon open on almost every large and not-so-
`large passenger vessel leaving most American ports.
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`One potentially disturbing development connected to the explosion of casino gambling is that many of these new casinos appear
`to draw mainly local customers, unlike the tourist-oriented resorts of Las Vegas or Atlantic City. With tourists for customers,
`it does not really matter that many players go broke—a mathematical certainty known as “gambler's ruin.” When a casino is
`located in a closed community, however, it acts like a black hole, sucking the money out of the local population.
`
`Throughout history, every society that has allowed casinos to cater to local customers has eventually outlawed gambling. 73
`It is common today, outside the mainland United States, to find restrictions on gambling by the local populace, or limitations
`on the number of casinos allowed to operate in each city or state. In Puerto Rico, for example, it is against the law for local
`licensed casinos to advertise to the local population. 74 This restriction was upheld by the United States Supreme Court, even
`though similar restrictions were not placed on any other form of the commonwealth's extensive legal gambling. 75 If the new
`mountain town and riverboat casinos draw most of their money from small local populations, there will be social ramifications
`that could lead to a crackdown on all gambling.
`
`*105 II
`
`Indian Gambling
`
`The executive and legislative branches of the federal government, with the support of the judicial branch, have formally adopted
`a public policy of promoting gambling on Indian land. Significantly, it was an official decree of the President of the United
`States, 76 followed by a U.S. Supreme Court decision, 77 and then an act of Congress (passed unanimously by the Senate and
`nearly so by the House of Representatives), 78 that led to the explosion of bingo and other games on Indian land. In California
`v. Cabazon Band of Mission Indians, the Supreme Court held that federal policy favors actively promoting Indian gambling. 79
`
`The Indian Gaming Regulatory Act divides all gambling into three classes: Class I encompasses social and traditional games;
`Class II is limited to bingo, including pull-tabs and technologic aids, and non-banking card games like poker; Class III includes
`all other forms of gambling. Class III includes primarily slot machines, casino banking and percentage games, off-track betting,
`and lotteries, and is viewed as more dangerous. The basic structure (although there are many exceptions) is that a federally
`recognized tribe may operate a Class I game without restrictions, a Class II game with oversight by the new National Indian
`Gaming Commission (“Commission”), and a Class III game only if it reaches a compact with the state in which it resides.
`A Class II or Class III game is allowed only in states that have not completely prohibited that particular game. 80 The Idaho
`legislature is attempting to prevent Indian casinos by amending the state constitution to ban casinos while allowing the state
`to run a lottery. 81
`
`Much of the casino industry in Nevada still hopes that Indian gaming will somehow just go away. There will undoubtedly be
`amendments, particularly to clarify whether a tribe can have a full-scale casino just because the state allows charities to run
`occasional “Las Vegas Nights.” However, it is evidently so clear that Congress has the power to allow *106 and regulate legal
`gambling on Indian land that a federal court of appeals did not even issue an opinion when it dismissed a challenge to the Act. 82
`
`The most important development in Indian gaming law is still in process. The National Indian Gaming Commission has issued
`regulations designed to settle the question of which types of gaming machines are allowed without a compact. 83 When those
`regulations became final, at least one tribe filed suit. 84 The primary dispute is the Commission's decision to prohibit all
`technologic aids for Class II games that violate the Johnson Act. 85 This eliminated video pull-tabs, which are the most profitable
`forms of Class II video games. 86
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`The Commission has finally issued regulations on background checks of management companies. 87 All of the other skirmishes,
`such as state raids on allegedly illegal machines and allegations of infiltration by organized crime, will become just so much
`history. The situation is similar to that in Las Vegas after the Kefauver Committee hearings in the 1950s. Nationwide bad
`press was followed by the creation of a regulatory system that eventually eliminated most of that casino industry's actual, if
`not perceived, problems.
`
`Also noteworthy is a federal district court determination in June 1991 that the state of Wisconsin had to negotiate compacts
`with its tribes for all forms of gambling, including casino games, simply because it had a state lottery. 88 The court reasoned
`that Wisconsin had instituted a state lottery; Wisconsin law has held that a lottery consists of prize, chance and consideration;
`all forms of gambling have prize, chance, and consideration. Therefore, the Wisconsin state lottery could technically offer any
`form of gambling, including casino games. Furthermore, once a state allows a single form of gambling, it must negotiate a
`compact to allow Indians in that state to offer all forms of the same game that the state offers. 89 The decision is probably
`incorrect, since it is based primarily *107 on old, poorly decided Wisconsin state cases holding that all forms of “gambling”
`are “lotteries,” and not on the detailed distinctions laid down in the Indian Gaming Regulatory Act. Governor Thompson has
`taken the position that the citizens of Wisconsin did not intend to legalize casinos when they voted in the state lottery. 90 The
`issue is somewhat moot for Wisconsin, because the Governor has already signed the compacts. It could, however, open the
`door to Indian casinos in the two dozen states that have state lotteries and Indian land.
`
`What could be as important for those tribes that need compacts with their states to conduct gaming are decisions that challenge
`the entire statutory scheme. The constitutional question goes to the heart of the new Indian Gaming Regulatory Act: can a state
`be sued in federal court if it refuses to negotiate in good faith with a tribe? The Act answers in the affirmative, but some states
`raise constitutional issues based on the Tenth 91 and Eleventh 92 Amendments of the U.S. Constitution.
`
`Some states contend that the Eleventh Amendment requires their consent before they can be sued. 93 In Alabama, for example,
`the Poarch Band of Creek Indians lost their suit against the state when the federal district court ruled that the Eleventh
`Amendment protected the state from being sued in these circumstances. 94 That case and others have been appealed.
`
`States argue that the new federal Act forces the states to regulate Indian gaming, in contravention of the Tenth Amendment. 95
`The argument seems weak, in part because the Act does not force the states to do anything, and in part because Congress
`clearly has exclusive, plenary power over Indian Nations. The Tenth Amendment would not seem to *108 bar Congress from
`voluntarily allowing the states to have some say over Indian gaming, if the states so wish.
`
`The state appellate courts will find themselves in uncharted waters. Congress has specifically stated in the Indian Gaming
`Regulatory Act that a tribe can sue a state in federal court. However, the Eleventh Amendment implies that a state cannot be
`sued in federal court without its consent. The courts may split on this issue, although the tribes will most likely prevail. It has
`never been a flat rule that states and state officials cannot be sued without their consent. States are routinely sued in federal court.
`Courts make a distinction between suits to obtain prospective relief against a state, which are enforceable in federal court, and
`suits for money damages, which are not. 96 The Fourteenth Amendment, which supersedes the earlier Eleventh Amendment,
`allows Congress to create causes of actions by private citizens against a state to vindicate a person's constitutional rights. 97 A
`majority of the U.S. Supreme Court has gone even further, ruling that Congress does have the power to abrogate state sovereign
`immunity when Congress legislates under its power to regulate interstate commerce. 98
`
`In addition, the Eleventh Amendment is no bar if the state consents. Since consent can be implied, a state may, through its
`actions, waive its constitutional right not to be sued. 99 This argument is based on the theory that when the states became
`part of the United States, they agreed that Congress would have exclusive power to regulate Indian tribes, and thus gave an
`implicit waiver of the Eleventh Amendment immunity. This argument is weak. A better one can be made for consent in a case
`
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`like California's, in which the state agreed to be bound by the federal statute when it entered into compacts with some tribes,
`pursuant to the exact terms of the statute. 100 In this case, Congress expressly created a cause of action against a state should
`that state fail to negotiate in good faith. 101
`
`The most unusual aspect of this dispute is the reason states are raising the Tenth and Eleventh Amendments at all. If the
`part of the Indian Gaming Regulatory Act requiring tribes and states to enter into compacts for Class III gaming is declared
`unconstitutional, the states will have won the battle, but lost the war. The Act is a statutory limitation *109 on the tribes'
`powers under federal common law and prior Acts of Congress, primarily Public Law 280. 102 The new limitation is permissible
`since tribes are given a remedy if the states refuse to negotiate in good faith. If the remedy is eliminated, the limitation will
`be eliminated as well. If the statute is unconstitutional because of the Tenth or Eleventh Amendments, the tribes will be left
`with the law laid down by the Supreme Court in Cabazon, which states that Indian tribes can have any form of gambling not
`specifically prohibited by state law. 103
`
`III
`
`Debts 104
`
`As the states become official promoters of legal gambling, the industry becomes more legitimate in the eyes of the law. Progress
`is moving at the rate of three steps forward for every one step back.
`
`Two recent cases from Quebec and Ontario, Canada, are typical. 105 The Quebec decision involved Resorts International; 106
`the Ontario decision involved Caesars Palace Atlantic City. 107 In both cases the casinos had obtained judgments from New
`Jersey state courts against players for gambling debts, and in both cases the Canadian courts ruled that since the public policy
`of the province was not currently opposed to casino gambling, particularly in light of the government's heavy promotion of
`gambling, public policy would not bar enforcement of the judgment based upon the gambling debt. 108 The Canadian courts
`now predominantly follow the reasoning of Intercontinental Hotels Corp. v. Golden, 109 in which the New York Court of
`Appeals allowed suit by a licensed Puerto Rican casino, based upon New York's public policy shift in favor of gambling. Added
`to the 1987 victory of Caesars Las Vegas against a player in Vancouver for enforcement of a gambling debt, 110 it is clear there
`are few places deadbeat Canadian players can hide from U.S. casinos.
`
`*110 The Mirage was able to recover from a big gambling debtor from Mexico. Here the court ruled that the casino's lending
`the player $400,000 to gamble meant the foreigner had “availed himself of the privilege of conducting business” in Nevada
`and was hence subject to Nevada jurisdiction. 111
`
`The Desert Inn won a decision on the enforceability of gambling debts in North Carolina, 112 while the Holiday Casino had to
`go to the Supreme Court of Alabama to collect on Nevada judgments for gambling debts. 113 It has been settled law since 1908
`that once a party gets a judgment on a gambling debt from a state court, that judgment is enforceable in every other jurisdiction,
`even if the jurisdiction does not itself enforce gambling debts. 114 It is surprising that these cases still have to be appealed by
`Nevada and Atlantic City casinos.
`
`The law, however, is different if the gambling debt has not been reduced to judgment in an American jurisdiction allowing
`enforcement of gambling debts. Carnival was unable to collect on an unpaid marker from its Cable Beach Casino in the Bahamas
`not because of Bahamian law, but because Texas continues to have a “public policy