Once again, Keith Whyte is the rational guy in the room.

Whyte, the executive director of the National Council on Problem Gambling, has long played the middle when it comes to all things gambling, and he’s playing the middle again after a ruling in New Jersey last week that found the Borgata and its parent company, MGM Resorts International, not liable in a suit brought by a compulsive gambler. 

The gambler, Sam A. Antar, accused the company of plying him with offers and come-ons to gamble despite knowing he had a crazy gambling problem. But what’s notable about the ruling, which came from the bench of U.S. District Court Judge Madeline Cox Arleo, is the “why.”

“The New Jersey Legislature … has not yet seen fit to require casinos to prevent or stop inducing gambling from those that exhibit problem gambling behavior,” Arleo wrote. “As a matter of law, [the] defendants do not owe a negligence common law duty of care to plaintiffs.”

So yay for the Borgata, yay for MGM Resorts, yay for the brick and mortar casino industry, yay for, by extension, the entire gambling industry?

Not so fast, as Whyte points out from his perch in the middle.

Duty of care

“This New Jersey court has held, as others have, that there’s no duty of care because the legislature didn’t establish one,” Whyte said. “Operators in the gambling industry wanted to use this case to enforce an unfortunate precedent. But there absolutely should be a duty of care, it does a major disservice to the industry by not having one. It’s a massive risk.”

Whyte’s “duty of care” comes directly from the bar and restaurant industry, where owners have a “duty of care” to make sure patrons who consumed alcohol get home safely.

Basically, some guy comes into the Whyte Tavern and gets wasted, goes out, gets in his car, and kills someone, Whyte Tavern could be legally on the hook.

There is nothing like this in the gambling industry, but Whyte thinks it’s just a matter of time before a legislature — or an activist judge — decides to force it upon the operators. 

“If the industry doesn’t adopt a duty of care, at some point it will be established, and it could really bite the industry,” he said. “If a court somewhere finds a really egregious case, and slaps down a very draconian finding, that could have massive negative impacts.”

Of course, there was a time when if you wanted to gamble under the watchful eye of Johnny Law, Vegas was the only game in town. Then came Atlantic City. And state lotteries. And parlay cards in a handful of states. Then online casinos. Daily fantasy sports. Then PASPA got struck down and online sports betting exploded across the country.

Today, legal gambling is pervasive in America. And with it has come a lot of hand-wringing, from federal lawmakers seeking to ban advertising to news outlets running stories about the dangers of getting in over one’s head.

And Whyte, along with many others, believes it’s a matter of “when” and not “if” lawmakers will start taking a hard look at the industry.

As such, Whyte thinks setting up a duty of care standard now is an obvious choice operators should make.

Avoiding risk

“In most all jurisdictions you have no way to train employees to avoid legal risks, because you don’t know where the standard is,” he said. “Where there’s a gray area, like this, with such massive consequences for individuals with gambling problems — as well as for the very survival of the casinos — you would think establishing a bright line standard is in everybody’s best interests.

“It’s better for all the stakeholders to sit down and have a serious discussion now,” Whyte continued, “rather than kicking the can down the road and hoping the negative judgement is going to be some other counsel’s problem, at some other company, in some other jurisdiction.”

Whyte does recognize the difference between duty of care when it comes to overserving someone at a bar and what constitutes a problem gambler. After all, one man’s problem gambling is another man’s day at the office.

“Not saying it would be easy,” Whyte said. “It would be difficult. There’s no biological gold standard for the equivalent of seeing someone who drank too much.”

But Whyte notes that due to anti-money laundering and “know your customer” rules, the casinos, the online operators, and everyone with a gambling license has plenty of info on their customers and that it all could be used as the backbone of duty of care self-regulation.

Otherwise, it might be used by legislators to demand its use.

“In this era of collecting enormous amounts of information on your play, where the money is coming from, all of it, it’s going to become harder and harder to say a customer wasn’t spending beyond their means,” Whyte notes.

Bottom line for Whyte? The operators are walking a dangerous path right now. One judge could upend the industry, federal lawmakers could upend the industry. It’s like the industry is standing on a 16 against the dealer’s face card.

“Now they leave themselves open to endless litigation because there’s no duty of care,” Whyte said. “They’re inviting every Tom, Dick, and Harry to sue them every time they lose a bet because they haven’t established a standard.”

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