Summer 2018

Wild and Wonderful Sports Wagering: What it Means from a Liability Perspective for West Virginia Casinos

With the recent passage and enactment of West Virginia Senate Bill 415, as well as the United States’ Supreme Court’s recent decision overturning the Professional and Amateur Sports Protection Act, sports wagering is coming to the Mountain State. There has been much discussion on the issue, but ultimately, the West Virginia legislature opted to provide the citizens of the State with the opportunity to place bets on certain sporting events. Much of the discussion has been centered on whether opportunity will be detrimental or beneficial to the citizens. Other discussions have taken place regarding whether or not sports wagering will provide enough money to the state to compensate for the potential detrimental impact on the citizens. However, one area that has not been discussed is the potential liability for casinos to guard against the specter of compulsive gambling claims.

The West Virginia Supreme Court of Appeals decision in Stevens v. MTR Gaming Grp., Inc., 237 W. Va. 531, 788 S.E.2d 59 (2016) provides substantial guidance on the issue of whether a lawsuit for compulsive sports wagering and gambling would stand. Mr. Stevens, a frequent customer at MTR’s casino in Chester, West Virginia, had committed suicide after he embezzled money from his company and exhausted all family funds to feed his gambling addiction. His wife, Ms. Stevens, acting in her capacity as personal representative of Mr. Stevens estate, brought action against the casino where her husband had frequented and the makers of slot machines and video terminals for negligence, premises liability, products liability, intentional infliction of emotional distress, and wrongful death.

The Stevens case stemmed from a certified question from the United States District Court for the Northern District of West Virginia, which asked:[1]

[w]hat duty of care exists as to each defendant given the allegation that the slot machines or video lottery terminals are designed through the use of mathematical programs to create the illusion of chance while instead fostering a disassociated mental state, to protect casino patrons from becoming addicted to gambling by using these machines or terminals

Id. at 534, 62. The Court began its analysis by first explaining what creates the existence of a duty. The Court found that the West Virginia legislature’s “deliberate and detailed proclamation of public policy through” the legalization of video lottery terminals and slot machines created a “clear legislative intent to foreclose judicial interference” with the operation of such in the State. Id. at 535, 63. Specifically, the Court reached four conclusions regarding West Virginia statutory and regulatory scheme governing lottery terminals: (1) The machines exist in West Virginia for the express purpose to create an economic boon; (2) The State thoroughly integrated itself into the provision and operation of the machines in a macro and micro sense that it cannot be divorced from the licensees and suppliers; (3) The societal costs of permitting gambling on the video lottery terminals was clearly weighed by the legislature; and (4) An administrative scheme was developed to assist compulsive gamblers with a protocol that created an “exclusion list” in which either the individual with a compulsive gambling disorder or the Director of the Lottery Commission (for specifically stated reasons) may exclude individuals of the opportunity to gamble. Id. 537-38, 65-66. Thus, because of the heavy regulation provided by the West Virginia legislature, the Court found that

[n]o duty of care under West Virginia law exists on the part of manufacturers of video lottery terminals, or the casinos in which the terminals are located, to protect users from compulsively gambling, … an action in negligence against the manufacturer or the casino may not be maintained for damages sustained by a user of the terminals as a result of his or her gambling.

Id. at 538, 66.

Based on the Stevens decision, it seems relatively clear that there is not duty on casinos to protect against compulsive gambling. However, Senate Bill 415 expressly allows for wagering at casinos as well as on any mobile application or other digital platforms that are approved by the West Virginia Lottery Commission. LOTTERY SPORTS WAGERING ACT, 2018 West Virginia Laws S.B. 415. Thus, this mode of wagering creates a very important and noticeable distinction that was not dealt with in Stevens: namely, the act of gambling through a casino while not having to present in-person at the casino. Thus, the “exclusion list” factor in the Stevens decision will be more difficult to successfully implement because if patrons do not have to present in-person at the casino, they would not be checked against the exclusion list and be properly turned away should they be on the exclusion list. Although a mobile app could very well have safeguards to prevent persons from accessing the app to place the bets, one can see how creating fictitious accounts with the intent to evade the exclusion list is a very real possibility.

In conclusion, it appears that the Stevens decision will shed much light on any dispute as to whether a casino should be liable for allowing compulsive gamblers to continue placing sports wagers. However, if liability issues do become pervasive because of the “success” of sports wagering in West Virginia, it is not unthinkable that the West Virginia legislature will come to the rescue of the casinos and others tied to the business of sports wagering. Such steps were taken in the 1980s with the passage of the West Virginia Skiing Responsibility Act (W. Va. Code § 20-3A-1, et seq.) and the Whitewater Responsibility Act (W. Va. Code § 20-3B-1, et seq.), both of which were enacted for the purpose of protecting the contributions that the sports had on the economy of West Virginia.

For more information about this article, please contact Landon s. Moyer at 304.596.2277.

[1] Three questions were ultimately certified and docketed for oral argument. However, the Court did not answer the second and third questions due to its ruling on the first certified question.