Gambling addict says online casinos exploited addiction for nearly $30M

Jackson Healy

PHILADELPHIA (CN) — A New Jersey high-roller is testing whether the house really does always win.

Sam A. Antar asked a three-judge panel of the Third Circuit Court of Appeals Tuesday to revive his dismissed claims against MGM Resorts and several of its subsidiaries — including BetMGM and Borgata Online — for knowingly and repeatedly exploiting his diagnosed gambling addiction by “ceaselessly enticing” him to gamble through “relentless” financial incentives and gifts, as well as through thousands of text messages sent directly to Antar.

The panel first attempted to discern who might be responsible for Antar’s more than $30 million in gambling losses.

U.S. Circuit Judge Stephanos Bibas immediately questioned whether it would even be possible to calculate a remedy in the event that Antar’s claims succeeded.

“Wouldn’t he have lost all this money anyway because he was a gambling addict?” asked Bibas, a Donald Trump appointee. “How can we ascertain how much of his loss was the defense cost?”

“We can figure out how much money he lost, but it’s a different question, how much he lost because of the unconscionable practice of playing into addiction,” he added, noting that Antar bears the burden of finding such a number as plaintiff.

Representing Antar, attorney Matthew Litt suggested one date as key to Bibas’ question — August 15, 2019, when the New Jersey Division of Criminal Justice served the defendant casinos a subpoena on suspicion of illegal activity on their site.

The subpoena coincides with a lawsuit filed against Antar by the Securities and Exchange Commission that claimed Antar defrauded investors out of over $550,000, part of which he spent on gambling.

That subpoena, Litt argued, should have brought enough attention to Antar for the casinos to flag him as a problem and cease his gambling incentives. The casinos’ failure to do so, Litt told Bibas, marks a bright-line date from which Antar’s losses could be attributed to the casino.

U.S. Circuit Judge Cindy Chung later pressed attorney Daniel Rhynhart, representing BetMGM, on the subject of the August 2019 subpoena, questioning at what point a casino would reach a threshold of poor business practice to justify a negligence claim.

“We don’t have specifics about this August subpoena,” said Chung, a Joe Biden appointee. “But let’s say the subpoena said, ‘Mr. Antar has been stealing money to gamble … and he’s, in fact, committing crimes to continue to gamble. Doesn’t that at least give them some sort of duty to stop, at the very least, communicating with him?”

Rhynhart suggested that forcing a casino to determine details of a gambler’s legal proceedings before offering them bonuses or cash-back offers would be “a slippery slope,” before mentioning the difficulties of determining who is and isn’t a compulsive gambler.

During rebuttal, Litt challenged Rhynhart’s assertion, telling the court that such a determination would be — and is — easy and not hypothetical as MGM suggests.

“The defendant’s employees, the two gentlemen who were charged with incentivizing Mr. Antar to continue gambling, were trained in recognizing the signs of problem gambling. That’s how they would know that he’s addicted to gambling," Litt said.

Litt also attempted to quell the court’s concerns over whether the New Jersey Consumer Fraud Act — which covers misleading and deceiving business practices — was even applicable to Antar, as a federal judged had determined in January such a claim was preempted by the New Jersey Casino Control Act.

Litt suggested that the Consumer Fraud Act is flexible enough to include such practices before Bibas interrupted him.

“Is there any dictionary that defines mislead or deceive that broadly? You haven’t cited them,” he said, to which Litt replied he was not aware of such a book.

Representing MGM Resorts International and Borgata Hotel Casino & Spa, attorney Matthew McGill picked up on Bibas’ questioning, suggesting Antar’s decision to not claim any deception invalidates the Consumer Fraud Act charge entirely.

“That’s the prime ingredient of any Consumer Fraud Act claim,” McGill said. “The plaintiff himself concedes that in his supplemental brief — it’s entirely absent here.”

Additionally, McGill said Antar’s own description of his gambling addiction — in which he would “continue depositing and betting until there were no funds remaining” — suggests Antar would have gambled away his money with or without the casinos’ incentives.

“That is how the plaintiff’s counsel himself characterizes the nature of his addiction,” McGill said. “That forecloses any causal link to the enticements that he targets here.”

Litt also suggested to the court that the casinos’ individualized one-on-one conversations encouraging Antar to gamble constituted a prosecutable act.

“It’s not passive, it’s active,” Litt said. “It’s not that they fail to do something. It’s that they use their product in a way they knew to be dangerous, and the plaintiff was harmed. It’s no different than the salesperson of a toaster oven.”

Rhynhart countered that such litigation would compromise the entire business concept of gambling. If a court were to force the reimbursement of a gambler’s losses, he argued, it would disrupt a necessary “balancing act” between gamblers’ protections and the “economic health of the casinos.”

Additionally, Rhynhart suggested gambling laws in New Jersey don’t require casinos to even identify or turn away problem gamblers. Rather, he said, the law only requires casinos to require regulations such as employee training on addiction identification, providing phone numbers for gambling addiction hotlines and creating self-exclusion options in which gamblers can temporarily ban themselves from the casino.

The court, rounded out by U.S. Senior Circuit Judge Jane Roth, a George H.W. Bush appointee, did not indicate when or how they would rule.