Asians, David Boies, Drinking, Gambling / Gaming, Marsha Berzon

Lawsuit of the Day: Watanabe v. Harrah's

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We just returned from a very fun weekend in Las Vegas, where we watched a friend compete in the Las Vegas Rock ‘n’ Roll marathon. Our friend was one of many lawyers in competition. He’s a prosecutor, but we also saw a public defender — her T-shirt said so — and possibly some lawyers from Morrison & Foerster (in “Run Like a MoFo” apparel). As discussed before in these pages, there’s something about marathon running that attracts attorneys.
Sadly, while in Sin City, we suffered some ill fortune at the craps tables. But things could have been worse — much worse. From an article in the Wall Street Journal:

During a year-long gambling binge at the Caesars Palace and Rio casinos in 2007, Terrance Watanabe managed to lose nearly $127 million.

The run is believed to be one of the biggest losing streaks by an individual in Las Vegas history. It devoured much of Mr. Watanabe’s personal fortune, he says, which he built up over more than two decades running his family’s party-favor import business in Omaha, Neb. It also benefitted the two casinos’ parent company, Harrah’s Entertainment Inc., which derived about 5.6% of its Las Vegas gambling revenue from Mr. Watanabe that year.

In a civil suit filed in Clark County District Court last month, Mr. Watanabe, 52 years old, says casino staff routinely plied him with liquor and pain medication as part of a systematic plan to keep him gambling.

More about the lawsuit, plus a fun fact about the article’s authorship, after the jump.


First, the fun fact. The WSJ article was written by Alexandra Berzon — a Pulitzer Prize-winning journalist, as well as the daughter of a brilliant, fearsomely liberal federal judge, aka She-Who-Must-Not-Be-Named.
Back to the article. It turns out there is both criminal and civil litigation pending over Terrance Watanabe’s Vegas misadventures:

In April, the Clark County District Attorney’s office charged Mr. Watanabe with four felony counts in district court for intent to defraud and steal from Harrah’s, stemming from $14.7 million that the casino says it extended to him as credit, and that he lost. Although Mr. Watanabe has paid nearly $112 million to Harrah’s, he has refused to pay the rest. He denies the charges, alleging that the casino reneged on promises to give him cash back on some losses, and encouraged him to gamble while intoxicated. If convicted, Mr. Watanabe faces up to 28 years in prison.

We feel for the little guy here, even if he may be a centimillionaire. Watanabe’s already paid you nine figures worth of cash — can’t you just comp him the rest? Given the magnitude of his losses, surely he’s entitled to more than a free buffet.
In Harrah’s defense, they already did comp him liberally:

[A Harrah’s marketing executive] specified such offers as tickets to the Rolling Stones, $12,500 a month for airfare and $500,000 in credit at the gift stores. Harrah’s also offered 15% cash back on table losses greater than $500,000, special high-limit games and other incentives. Mr. Watanabe alleges that Harrah’s later rolled those terms back.

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Watanabe has retained a high-powered lawyer, Pierce O’Donnell, to represent him in the civil case against the casino. And there may be some facts on his side:

Several former and current Harrah’s employees say their managers told them to let Mr. Watanabe continue betting while he was visibly intoxicated, even though casino rules and state law stipulate that anyone who is clearly drunk shouldn’t be allowed to gamble. These employees say they were afraid they would be fired if they did anything to discourage Mr. Watanabe from gambling at the casinos.

Oh, Asians — it’s so easy to get us drunk! One glass of wine and we have the “Asian glow.”
Watanabe also cites the fact that he was previously banned from the Wynn in Las Vegas, for compulsive drinking and gambling, and that Harrah’s should have realized he had problems and acted accordingly. Instead, they rolled out the welcome mat.
Despite his extensive allegations, Watanabe may face an uphill battle, at least based on historical precedent. Citing experts, the article notes that such lawsuits by gamblers against casinos “are rarely, if ever, successful.”
Even if you’re not a gambler, some of the tidbits in the article will make your eyes widen:

Several employees say Mr. Watanabe would stay at the tables for up to 24 hours, sometimes losing as much as $5 million in a single binge. He was allowed to play three blackjack hands simultaneously with a $50,000 limit for each hand. At one point, the casino raised his credit to $17 million, according to court documents.

We know many lawyers who like to gamble. For example, super-lawyer David Boies is known to be a big craps fan. But, despite his vast wealth, we doubt that Boies can afford to lose $127 million in a year at the tables.
Alex Berzon’s article is a fascinating read, especially to any of you interested in the gaming industry and how it lures high rollers, aka “whales,” into the casinos. Read it in full over here.
P.S. Another highlight of our trip to Vegas last weekend: riding around the Strip in a Hummer stretch limo, along with a Biglaw partner, a tax lawyer, and a law professor. Further affiant sayeth naught — what happens in Vegas, stays in Vegas. But if you add us as a friend on Facebook, you can see some pictures (although we haven’t uploaded the most incriminating ones yet).
The Gambler Who Blew $127 Million [Wall Street Journal]

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