Collection of Casino Debts Spurs Suits

When Manuel Osvaldo Nacrur stepped off a plane in Miami last year, he got a rude surprise. Instead of catching his connecting flight home to Los Angeles, Nacrur was handcuffed, jailed 10 days, then hauled around the country in a prisoner van for more than two weeks.

Finally, a federal lawsuit charges, he was delivered to the Las Vegas authorities who had issued a warrant for his arrest.

His alleged crime? The San Fernando Valley resident owed the MGM Grand casino $45,000 in gambling debts.

Nacrur’s experience, critics say, represents a troubling trend in the way gambling houses are collecting their unpaid markers--vouchers that allow gamblers to keep playing when their cash runs out.

Rather than treating these debts as civil matters, casinos in the nation’s three largest gambling states--Nevada, New Jersey and Mississippi--are turning to police and prosecutors as enforcers, threatening gamblers with jail time unless they pay up.

“This borders on misusing the criminal justice system,” said I. Nelson Rose, a gambling law expert at Whittier Law School in Costa Mesa. “The criminal justice system was not designed for private debt enforcement.”

Now two Los Angeles attorneys have launched what is believed to be the first challenge to this practice. In a series of four class-action lawsuits filed in Los Angeles and Las Vegas federal courts, the lawyers allege that Nevada prosecutors have been using their state’s bad check law to collect markers for some of the state’s biggest casinos, including the MGM Grand, Caesars Palace and the Las Vegas Hilton.

“Why are we keeping people in jail to collect gambling debts?” asked Richard Fine, who filed the cases with colleague Gerald Werksman. “It’s a horrible use of public funds, and it’s an unconscionable means to collect debts.”

But Clark County Dist. Atty. Stewart Bell, whose territory includes Las Vegas, contends he is merely enforcing Nevada’s laws, which make it a crime to write a bad check to “obtain credit extended by any licensed gaming establishment.”

“These [markers] are checks under Nevada law,” Bell said. “When you present an instrument for payment, and it’s not honored, it’s a crime.”

Representatives for the casinos named in the suits said they could not discuss pending litigation.

Markers, printed by the casinos, look like checks, right down to the signature line. They list a player’s name, bank account numbers, and a dollar amount, which can range from a few hundred dollars up to $1 million.

A gambler can either pay up immediately or through billed installments. If he defaults, the marker is “cashed” by the casino, which has permission to tap directly into a player’s bank account.

In the old days, if the account was dry, the casinos were out of luck. That is because most states traditionally considered betting to run counter to good public policy and courts did not enforce gambling debts, even in Nevada, Rose said.

But gaming interests changed that in 1983 when they lobbied two bills through the Nevada Legislature making gambling debts enforceable in civil court and, under criminal law, equating unpaid markers with bad checks, records and interviews show.

Special Unit Formed in 1995

The criminal provision was not actively enforced until 1995, when the newly elected Bell formed a unit to handle bad checks and the Las Vegas casinos asked him to prosecute gamblers who would not pay their markers.

Bell said that of the thousands of bad check cases his office handles each year, only 5% to 10% are from casinos--and just a small portion of those involve markers. Those cases involving $250 or more are prosecuted as felonies.

The Las Vegas district attorney’s office is not alone in its casino work. The Lake Tahoe branch of the Douglas County, Nev., district attorney’s office does a brisk business in unpaid markers, and prosecutors in Reno say that at least half of their bad check cases involve casino vouchers.

Prosecutors in Atlantic City, N.J., and Mississippi--the nation’s second- and third-largest gambling areas--say they also pursue unpaid markers as crimes.

“Anything over $100, and you’re going to jail,” said Kevin Otis, head of the bad check unit in Vicksburg, Miss., one of about half a dozen Mississippi towns that together pull in billions of dollars from riverboat gambling.

In his federal lawsuits, however, Fine has focused on Las Vegas, where he alleges that Bell has prosecuted about 5,000 cases in the last four years. “The gaming industry is one of the biggest industries in Nevada,” Fine said. “[Bell] is servicing the industry.”

Clark County election records show the industry has been among Bell’s largest campaign contributors. During his 1998 reelection, casino corporations gave more than $50,000 of the $178,000 he raised. Those named in Fine’s lawsuits were contributors: the Las Vegas Hilton and Caesars Palace each gave $5,000; the MGM Grand gave $1,500.

Bell said the idea that he would exchange favors for contributions is ridiculous.

“We have no discretion as to which laws to enforce,” he said.

Fine disagrees. His lawsuits argue that markers are civil debts, much like credit cards, and Bell’s office should not be involved.

“There’s no question that the casino treats [markers] like credit, and when they can’t get repaid in other ways, they go to the D.A.,” Fine said.

Fine admits that those being prosecuted are not all sympathetic figures--some may be gambling addicts--but says that many are average working people who get caught up in the excitement.

“These aren’t the fellows that are coming in and losing $5 million,” Fine said. “These are guys that come to Las Vegas for a convention. They borrow $10,000 or $20,000, they gamble, and they lose. Then all of a sudden they’ve got this debt they can’t repay. It could happen to anyone.”

Fine said this happened to Nacrur, a 65-year-old photographic technician from Panorama City who racked up $45,000 in markers playing the tables in 1997. Nacrur was not made available for comment.

His lawsuit contends that U.S. customs officials, acting on a Las Vegas warrant, snagged him at the Miami Airport on Jan. 31 and jailed him for 10 days before employees of a private transport company loaded him into a van for a circuitous trip to Nevada.

Once back in Las Vegas, the prosecutor’s office offered Nacrur a deal: Pay off the markers and avoid prosecution, the suit charges. When Nacrur refused, he was released on his own recognizance, and is now facing charges of writing bad checks.

Fine argues that the offer recalled the colonial days of debtors prison, when those owing money were jailed. Law expert Rose says that Fine’s challenge of the practice is the first he has heard of and gives it good odds.