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UNLV Gaming Law Journal

Abstract

Gambling has a long and circuitous history in American law. Perhaps the strangest turn in this journey is the current situation in Nevada, in which the District Attorney uses the force of criminal law to collect unpaid loans owed to casinos in return for a generous ten percent bounty. It is part of the lore of Las Vegas that the mob running some of the casinos in the city would send a bagman to collect unpaid debts, with a variety of unpleasant consequences for those who refused to pay. Morris Barney “Moe” Dalitz reputedly was the last of the great mobsters to control gambling in Las Vegas, and common wisdom held that it was most certainly not a good thing to be indebted to Moe. At the same time, the lore holds that he had the reputation for being a reasonable man: you were in real trouble only if you had the ability to pay and were attempting to skirt your obligations. In addition to this reputation for displaying a measure of reasonableness, he was a major benefactor of many charities and cultural sites in Las Vegas, with the result that he was given the honorific title, “Mr. Las Vegas.” Thus, it is not too far a stretch to suggest that even Moe Dalitz would blush if he could see the current collection operation run by the District Attorney of Clark County.

This Article, will first describe the basis upon which the District Attorney acts as a collection agent for casinos and then demonstrate that this basis is wholly without support under the law of negotiable instruments. To render the discussion concrete, this Article refers to the recent high-profile case in which Terrance Watanabe was prosecuted by the Clark County District Attorney for refusing to pay $14.75 million in casino markers, a refusal that was motivated by his ongoing legal dispute with the casinos that held the markers. This Article concludes that the strong intuition that there is something fundamentally wrong with the State of Nevada using its police power to collect unpaid loans owed to casinos, and accepting a substantial fee for doing so, turns out to be wholly in accord with the applicable law as properly understood.

Publication Citation

3 UNLV Gaming L.J. 59 (2012).

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