MGM Not Liable for Damages: Why Courts Say Casinos Lack a Duty of Care to Prevent Compulsive Gambling

While many argue that casinos bear a social responsibility to intervene when players show signs of distress, the court states that MGM Resorts has no legal duty to prevent compulsive gambling or mitigate any resulting financial losses. This ruling clarifies the legal distinction between a venue providing entertainment and an entity being held liable for the behavioral patterns associated with compulsive gambling.

• The plaintiff, Sam Antar, lost nearly $25 million across MGM platforms.
• The initial lawsuit claimed MGM violated the Consumer Fraud Act by offering bonuses despite his addiction.

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A federal appeals court in New Jersey has upheld a lower court’s ruling, determining that MGM Resorts—and casino operators in the USA in general—do not bear a legal duty of care towards compulsive gamblers.

Sam A. Antar filed a lawsuit against MGM in September 2022 to recover nearly $25 million that he lost while placing over 100,000 online bets on their platforms, including BetMGM and Borgata Online, between May 2019 and January 2020. In January 2020 alone, he lost over $5 million in just 16 days.

Antar accused the operator of violating the New Jersey Consumer Fraud Act (CFA), negligence, and unjust enrichment by continuously offering him “incentives to gamble” in the form of casino bonuses, despite their awareness of his gambling issues.

Antar’s Fraud Conviction

In 2022, Antar was sentenced to three years in prison after pleading guilty to fraud charges. He was ordered to pay restitution of about $650,000 for gambling money that he promised to invest in shares before going public. He has since been on parole.

In February 2024, a trial judge ruled that New Jersey’s Casino Control Act takes precedence over the CFA, which does not require casinos to stop inducing gambling in individuals demonstrating problematic behaviours.

The judge added, “The casino owed the plaintiff no duty of care under common law for negligence.”

On Monday, a panel from the Third Circuit confirmed the decision, highlighting that courts in New Jersey and across the country have unanimously rejected imposing a duty of care on casinos concerning compulsive gamblers.

The panel also determined that Antar failed to prove that MGM acted unlawfully and dismissed his argument that the operator misled him by offering VIP bonuses.

“Antar was fully aware that the text messages from his VIP hosts offering bonuses, credits, and deposit bonuses were precisely what they appeared to be: incentives to continue gambling,” concluded the Court.

Who is ‘Crazy Eddie’?

Antar is the nephew of the discredited electronics mogul “Crazy” Eddie Antar, who was behind the multimillion-dollar Crazy Eddie electronics chain.

At its peak, Crazy Eddie was one of the nation’s largest consumer electronics chains and went public on NASDAQ in 1984. Shortly thereafter, it was discovered that it was a fraudulent business that artificially inflated profits and committed large-scale financial fraud.

Eddie Antar was arrested in 1992 on federal charges of organized crime conspiracy and spent eight years in prison.

Summary

The ruling in Sam Antar’s case delivers a clear message that casino operators like MGM Resorts are not legally bound to intervene in the gambling activities of compulsive players. The affirmation that MGM did not act unlawfully reinforces a significant precedent in how casinos can operate in relation to gambling addiction. This has considerable implications for consumer protection in the gaming industry.