Judge throws out poker players’ lawsuit

Two poker players have learned just how hard it is to beat the house -- even in court.

A year ago, the gamblers sued five Los Angeles County casinos, accusing them of improperly running jackpot games in which players can win thousands of dollars by losing. A judge threw out their lawsuit last month.

Los Angeles-area poker rooms typically collect $1 from every pot -- amassing thousands of dollars a day -- to pay “bad-beat jackpots” to players who lose despite holding exceptionally strong hands.

Poker players Dennis Chae and Jeff Kim contended that the casinos were not following state law that required the games to be offered as no-purchase-necessary. They filed suit last May against the Bicycle, Commerce, Hustler, Hollywood Park and Hawaiian Gardens casinos.

Los Angeles County Superior Court Judge Emile H. Elias ruled that state law prohibited the players from trying to recover gambling losses in the courts.

“Plaintiffs chose to play the games despite the knowledge that they would be charged” the $1 jackpot fee, the judge wrote.

Poker has long been legal in California, but the state has warned casinos that the jackpots are illegal lotteries if a fee is required to win. As a result, the casinos advertise that there is no purchase necessary to compete for the jackpots and have said they will deal jackpot games without a fee if requested. They are rarely asked to do so, casino officials said.

Chae and Kim had contended in their lawsuit that the five casinos would not allow them to compete for the jackpots unless they played at tables that collected the $1-per-hand fees. Their lawsuit accused the casinos of false advertising.

Lawyers for the two poker players estimated that the casinos make hundreds of thousands of dollars in profits each year by collecting administrative fees of 15% to 25% from the jackpot pools. Their lawsuit sought class-action status, which would have allowed thousands of players to become plaintiffs. The suit also sought monetary damages and an injunction ending the jackpots.

Gambling is big business in Los Angeles. The Commerce Casino, which bills itself as the largest poker casino in the world, reported $149 million in revenue from its table games in 2009, City of Commerce finance department records show.

Commerce Casino general counsel Andy Schneiderman said the casino carefully adhered to state gaming laws.

“We had every confidence the case would be dismissed because all of the games we offer are approved by the state, including jackpot games,” Schneiderman said. “There are a lot of plaintiffs attorneys out there looking to make money, but we don’t feel we’re vulnerable to attack.”

Christopher Kim, the Los Angeles attorney who represented the players, did not respond to an interview request.

Jackpot poker was first deemed an illegal lottery in a 1989 attorney general opinion that was later upheld by a state appeals court. Casinos have advertised the jackpots as no-purchase-necessary for about 15 years.

To meet that requirement, casinos have said they would allow players to play for free -- presumably using chips that have no value -- with the ability to win a jackpot if they hit the long-shot hand.

“The truth is there are very few players, if any, that decide they would like to sit and play poker for the long shot of trying to win a jackpot,” he said. “So we haven’t had to deal with what limitations to place on it.”

stuart.pfeifer@latimes.com