Provincial agency settling cases brought by problem gamblers to avoid setting precedents
Aug 05, 2007 04:30 AM
The Ontario Lottery and Gaming Corp. has settled out of court all of the major lawsuits launched against it in recent years by compulsive gamblers, avoiding any court ruling on its controversial program that offers addicts a chance to keep themselves out of casinos.
But experts say it appears that the legal tide may be turning, in spite of the settlements, toward making the OLG, as it's now known, liable for its casino patrons who are considered compulsive gamblers, as occurred decades ago when responsibilities were imposed on those who serve alcohol.
Over the last few years, the OLG has settled all 10 problem gambling-related lawsuits launched against it, and four are still pending.
One common theme to the suits is that the OLG, which manages the government-owned casinos and racetrack slot machines, failed to protect gamblers from the harm caused by their addictions by not keeping them out of the casinos.
Many claim they signed "self-exclusion" forms, a pillar of the province's problem gambling strategy, to ban themselves from casinos.
The plaintiffs say the gambling venues ought to have exercised a "duty of care" toward them.
They include Woodstock resident Lisa Dickert, who sued for $1 million, alleging she was allowed to return to the Brantford and Point Edward charity casinos despite signing a self-exclusion form. In a $1.4 million suit, Toronto real estate agent Constantin Digalakis claimed heavy losses at Ontario's huge casino resorts and that Casino Niagara lifted his casino ban multiple times. Gabe Macaluso, the former head of Hamilton's Copps Coliseum, sued for $2 million, alleging he lost so much that he mused about suicide and was banned from Casino Niagara, only to be welcomed back two months later.
The latest case of Joseph Treyes was settled last May. In that case, Treyes, a Parkinson's patient who claimed that the disease medication helped him become a gambling addict, sued for $1.2 million, alleging he was able to play the slot machines repeatedly at Toronto's Woodbine racetrack and the Mohawk racetrack near Guelph, despite having signed a self-exclusion form.
Critics have argued that the OLG should try to make self-exclusion more effective. Right now, the pictures of banned patrons are distributed to each gambling venue, and security guards are expected to be on the lookout for them.
Meanwhile, in the Netherlands, gamblers must swipe an identification card to gain entry into casinos. In other places, such as British Columbia, facial recognition cameras catch self-excluders, not just cheaters as in Ontario.
Details of the settlements and their amounts remain a secret under the terms of the agreements.
Most cases settle out of court. But Bill Bogart, a professor of law at the University of Windsor who is researching problem gambling regulation for the Ontario Problem Gambling Research Centre, says the OLG could have another motivation.
"Many defendants who are involved in numerous transactions will avoid rulings that could have precedential value," he explains. "They don't want the courts deciding that there is a duty of care."
Jasminka Kalajdzic, a Windsor lawyer who last year co-wrote a paper for the Research Centre on the gambling industry's duty of care, says a precedent is a powerful thing: "It's a question of opening the floodgates to other claims," she notes. "It might make it easier for the next plaintiff that comes to establish the validity of their case."
However, James Doris, the Toronto lawyer who represents the OLG, points out that "there is no judicial precedent to our knowledge right now anywhere in North America."
He says the settlements don't indicate the government is avoiding a precedent, but a court ruling that upholds a duty of care "obviously would have an impact on their operations," he adds.
There could be a precedent set denying such a duty, which Doris says "would be the best outcome" for the OLG.
The OLG has always maintained that self-exclusion is voluntary and that it's not obliged to keep the banned patrons out. In fact, it changed the forms in 2005, removing a phrase that stated it would use its "best efforts" to deny entry to the casinos, instead emphasizing that it has "no responsibility or obligation" to keep a banned person out, evict them or stop them from gambling.
The agency also emphasizes that 2 per cent of slot revenue goes back into problem gambling prevention, treatment and research. That amounts to more than $30 million each year.
Treyes' settlement terms, like the others is a secret.
However, the lawyers representing him went back to court after the fact to ask for a premium to cover extra costs associated with the unprecedented case. For instance, Treyes was destitute during the lawsuit, so the law firm paid his rent.
In an unexpected twist, the move afforded the judge, who ruled in favour of the premium on July 11, an opportunity to comment on the case itself.
Justice Ellen Macdonald of the Superior Court of Ontario, wrote in a footnote to the decision, "Contrary to the (self-exclusion) agreement, Mr. Treyes was permitted access to Woodbine and Mohawk where he sustained the losses ..."
Since none of the cases has made it to trial, it's believed to be the first time a judge has been able to make public statements about the self-exclusion system.
Mississauga lawyers Hassan Fancy and Monica Chakravarti, who represented Treyes, say the words are significant.
"It provides some judicial weight to the argument that under the self-exclusion program, contracts are created between the patron" and the OLG, Fancy says, and if the OLG "does not exercise its best efforts to deny entry then they have breached those contracts."
Toronto lawyer Sean Dewart, who represented Lisa Dickert and has since taken on other cases against the OLG, says it probably won't affect future cases, but is important nonetheless. "The OLG persistently pretends it has no obligation under the self-exclusion forms," he says. "It's silly, so that was the obvious reaction of the judge who turned her mind to the issue."
Justice Macdonald also commented on the notion of the OLG's "duty of care."
She quoted from Kalajdzic's paper, which concluded that a duty of care, indeed, exists. "The content and conclusions of this article are likely to have influenced the confidential settlement of this action," the judge stated.
In the paper, Kalajdzic and William Sasso analyze the recent case involving fraud by lottery ticket retailers, which caused a scandal that led to an investigation by Ontario's ombudsman and the departure of the gambling agency's head. In that case, the judge said the OLG owed the man, 83-year-old Bob Edmonds, a duty of care not to be scammed out of his winnings.
Negligence turns on whether harm could be foreseen. The judge noted that the OLG knew retailers could claim a customer's ticket at their own and adopted an "insider win" policy. It could be argued, Kalajdzic and Sasso contend, that the government's funding of problem gambling research and treatment could be construed as foreseeing the risk to problem gamblers.
Doris says it's not so black and white. The fraud case involved a single customer, whereas with problem gambling, it would be a "completely open-ended duty to some unspecified person to stop them from gambling."
It's also different, he says, from the Menow case from 1973 which established bar owners' duty to protect clients in certain cases from harm as a result of drinking in their tavern.
Doris says there is no parallel between a drunk patron and a gambling addict. "In Menow it's an intoxicated patron - not an alcoholic," he offers. "Menow doesn't say you have a duty not to sell alcohol to an alcoholic."
Identifying a problem gambler is obviously much more difficult than someone who's inebriated.
However, if a person self-bans from the casino, the OLG would know they're an addict, Kalajdzic says. "We'd say that the OLG would likely be found liable to a person who signed a self-exclusion contract and was permitted to re-enter and play anyway."
The paper has garnered significant attention in the industry and the legal system. Alongside the Edmonds decision and what Justice Macdonald wrote, Fancy says the legal tide is turning.
"I hope I get a chance to take (this issue) to trial because I believe the court is going to find there is a duty of care owed," Fancy says.
Bogart cautions, however, that litigation isn't the best avenue to solve the problem. That should be reserved for policy makers, he says.
"Good self-exclusion strategies and a duty of care and enforcement of it in appropriate circumstances is what we need in terms of developing a strong response to the harm caused by problem gambling."