Justia Contracts Opinion Summaries

Articles Posted in Gaming Law
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Blizzard Entertainment, Inc. (Blizzard) appealed an order denying its motion to compel arbitration. B.D., a minor, played Blizzard’s online videogame “Overwatch,” and used “real money” to make in-game purchases of “Loot Boxes” - items that offer “randomized chances . . . to obtain desirable or helpful ‘loot’ in the game.” B.D. and his father (together, Plaintiffs) sued Blizzard, alleging the sale of loot boxes with randomized values constituted unlawful gambling, and, thus, violated the California Unfair Competition Law (UCL). Plaintiffs sought only prospective injunctive relief, plus attorney fees and costs. Blizzard moved to compel arbitration based on the dispute resolution policy incorporated into various iterations of the online license agreement that Blizzard presented to users when they signed up for, downloaded, and used Blizzard’s service. The trial court denied the motion, finding a “reasonably prudent user would not have inquiry notice of the agreement” to arbitrate because “there was no conspicuous notice of an arbitration” provision in any of the license agreements. The Court of Appeal disagreed: the operative version of Blizzard’s license agreement was presented to users in an online pop-up window that contained the entire agreement within a scrollable text box. View "B.D. v. Blizzard Entertainment" on Justia Law

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Land Holdings I, LLC, d/b/a Scarlet Pearl, LLC (“Casino”), sought to expunge a lien filed by GSI Services, LLC (“GSI”). The chancellor denied the Casino’s petition to expunge the lien because GSI performed work at the Casino within ninety days of filing its lien. Finding no error, the Mississippi Supreme Court affirmed the chancellor’s order. View "Land Holdings I, LLC d/b/a Scarlet Pearl, LLC v. GSI Services, LLC" on Justia Law

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Oklahoma and the Citizen Potawatomi Nation (the “Nation”) entered into a Tribal-State gaming compact; Part 12 of which contained a dispute-resolution procedure that called for arbitration of disagreements “arising under” the Compact’s provisions. The terms of the Compact indicated either party could, “[n]otwithstanding any provision of law,” “bring an action against the other in a federal district court for the de novo review of any arbitration award.” In Hall Street Associates, LLC. v. Mattel, Inc., 552 U.S. 576, (2008), the Supreme Court held that the Federal Arbitration Act (“FAA”) precluded parties to an arbitration agreement from contracting for de novo review of the legal determinations in an arbitration award. At issue before the Tenth Circuit Court of Appeals was how to treat the Compact’s de novo review provision given the Supreme Court’s decision in Hall Street Associates. The Nation argued the appropriate course was to excise from the Compact the de novo review provision, leaving intact the parties’ binding obligation to engage in arbitration, subject only to limited judicial review under 9 U.S.C. sections 9 and 10. Oklahoma argued the de novo review provision was integral to the parties’ agreement to arbitrate disputes arising under the Compact and, therefore, the Tenth Circuit should sever the entire arbitration provision from the Compact. The Tenth Circuit found the language of the Compact demonstrated that the de novo review provision was a material aspect of the parties’ agreement to arbitrate disputes arising thereunder. Because Hall Street Associates clearly indicated the Compact’s de novo review provision was legally invalid, and because the obligation to arbitrate was contingent on the availability of de novo review, the Tenth Circuit concluded the obligation to arbitrate set out in Compact Part 12 was unenforceable. Thus, the matter was remanded to the district court to enter an order vacating the arbitration award. View "Citizen Potawatomi Nation v. State of Oklahoma" on Justia Law

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The 2009 Video Gaming Act (230 ILCS 40/1)) legalized the use of video gaming terminals in licensed establishments, including bars, veterans’ organizations, and truck stops, and authorizes the Illinois Gaming Board to supervise all video gaming operations governed by the Act. A video gaming terminal may be placed in a licensed establishment only if the establishment has entered into a written use agreement with the licensed terminal operator. A use agreement may be assigned only from one licensed terminal operator to another. Action, an unlicensed terminal operator, executed “Exclusive Location and Video Gaming Terminal Agreements” with each of 10 establishments, stating that Action and the establishments would obtain licenses. In 2012 the parties amended their agreements by adding clauses, purportedly “necessary in order for the Agreement to comply with the [Act] and the rules and regulations," including clauses providing that Action could assign its rights and acknowledging that the agreement and the amendment “are subject to and contingent upon the [Gaming Board’s] review.” In 2012, the Board denied Action’s license application based on findings that Acton employees were associated with individuals who had been convicted of illegal gambling. Action assigned its rights under the agreements to J&J, a licensed operator. The establishments were not yet licensed. Subsequently, each of the establishments signed separate location agreements with Accel, a licensed operator. J&J and Action sued; the circuit courts ruled that the location agreements were not use agreements, but were valid contracts, and enjoined Accel from operating terminals at the establishments. The appellate court and the Illinois Supreme court held that the circuit courts lacked subject-matter jurisdiction because the Board has exclusive authority over contracts for the placement of video gaming terminals. The comprehensive statutory scheme vests jurisdiction over video gaming operations with the Board; the agreements purport to control placement and operation of video gaming terminals. View "J&J Ventures Gaming, LLC v. Wild, Inc." on Justia Law

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Plaintiff, individually and purportedly on behalf of others similarly situated, filed suit against GameStop for breach of contract, unjust enrichment, money had and received, and violation of Minnesota’s Consumer Fraud Act (CFA), Minn. Stat. 325F.68, et seq. Plaintiff alleged that GameStop's disclosure of personally identifiable information (PII) to a third party (Facebook) violated an express agreement not to do so. The district court granted GameStop's motion to dismiss based on plaintiff's lack of standing. The court concluded that plaintiff provided sufficient facts alleging that he is party to a binding contract with GameStop, and GameStop does not dispute this contractual relationship; GameStop has violated that policy; and plaintiff has suffered damages as a result of GameStop's breach. The court also concluded that plaintiff has standing to bring his breach-of-contract claim and to bring his other claims. The court concluded, however, that the privacy policy unambiguously does not include those pieces of information among the protected PII. Therefore, the protection plaintiff argues GameStop failed to provide was not among the protections for which he bargained by agreeing to the terms of service, and GameStop thus could not have breached its contract with plaintiff. Plaintiff's Minnesota CFA claims fail for similar reasons. Finally, plaintiff has not alleged a claim for unjust enrichment or the related claim of money had and received. View "Carlsen v. GameStop, Inc." on Justia Law

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This appeal stemmed from a contract dispute between San Pasqual and the State governing San Pasqual's operation of a casino on its land. San Pasqual filed two suits against the State that were consolidated, alleging breach of contract and seeking damages for five years of lost profits. On appeal, San Pasqual challenged the district court's grant of summary judgment to the State. The court agreed with the State that Section 9.4 of the Compact between the State and San Pasqual is unambiguous, applies to this action, and bars San Pasqual’s damages claim. Accordingly, the court affirmed the judgment. View "San Pasqual Band of Mission Indians v. California" on Justia Law

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Plaintiff filed suit against Wynn Las Vegas, alleging claims of breach of contract and recoupment regarding gambling debts that plaintiff owed to Wynn. The district court dismissed based on plaintiff's failure to exhaust the claims before the Nevada Gaming Control Board. The court held, however, that plaintiff was not required to exhaust his claims before the Gaming Control Board because the markers that underlie his case are credit instruments under Nevada law. Because the markers are credit instruments, plaintiff's claims did not trigger the Gaming Control Board's exclusive jurisdiction under Nev. Rev. Stat. 463.361(2). Plaintiff's claims must be resolved in the same manner as any other dispute involving the enforceability of a negotiable instrument. Accordingly, the court reversed and remanded.View "Zoggolis v. Wynn Las Vegas" on Justia Law

Posted in: Contracts, Gaming Law
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The Ho-Chunk Nation, a federally recognized Indian Tribe, operates casinos in Wisconsin and nets more than $200 million annually from its gambling operations. Cash Systems, one of three businesses involved in this case, engaged in issuing cash to casino customers via automated teller machines and kiosks, check-cashing, and credit- and debit-card advances. Whiteagle, a member of the Nation, held himself out as an insider and offered vendors an entrée into the tribe’s governance and gaming operations. Cash Systems engaged Whiteagle in 2002 as a confidential consultant. Cash Systems served as the Nation’s cash-access services vendor for the next six years, earning more than seven million dollars, while it paid Whiteagle just under two million dollars. Whiteagles’s “in” was his relationship with Pettibone, who had been serving in the Ho-Chunk legislature since 1995. Ultimately, Whiteagle, Pettibone, and another were charged with conspiracy (18 U.S.C. 371) to commit bribery in connection with the contracts with the Ho-Chunk Nation and substantive bribery (18 U.S.C. 666). Whiteagle was also charged with tax evasion and witness tampering. Pettibone pleaded guilty to corruptly accepting a car with the intent to be influenced in connection with a contract. Whiteagle admitted that he had solicited money and other things of value for Pettibone from three companies, but denied actually paying bribes to Pettibone and insisted that he and Pettibone had advocated for Whiteagle’s clients based on what they believed to be the genuine merits of those clients. Convicted on all counts, Whiteagle was sentenced, below-guidelines, to 120 months. The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence on the bribery charges, the loss calculation, and admission of certain evidence.View "United States v. Whiteagle" on Justia Law

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New Jersey enacted the 2002 Off-Track and Account Wagering Act, N.J. Stat. 5:5-127, providing for establishment of 15 off-track wagering (OTW) facilities. The Act authorized a license for the N.J. Sports and Exposition Authority, conditioned upon NJSEA entering into a participation agreement with other entities that held horse racing permits in 2000 (ACRA and Freehold). NJSEA, ACRA, and Freehold entered into an agreement, allocating permit rights. By 2011, only four facilities had opened. NJSEA had leased control of its tracks to the New Jersey Thoroughbred Horsemen’s Association (NJTHA) and another. The 2011 Forfeiture Amendment provided that permit holders would forfeit rights to any OTW not licensed by 2012, unless they demonstrated “making progress” toward establishing an OTW; forfeited rights would be available to other “horsemen’s organizations” without compensation to the permit holder. NJTHA qualified for forfeited rights. The 2012 Deposit Amendment extended the forfeiture date and allowed a permit holder to make a $1 million deposit for each OTW facility not licensed by December 31, 2011, retaining the “making progress” exception. The Pilot Program Act allowed installation of electronic wagering terminals in some bars and restaurants, by lessees or purchasers of NJSEA-owned racetracks, who could exchange unused OTW licenses to install electronic terminals. NJTHA secured such a license. ACRA and Freehold submitted challenged the constitutionality of the amendments under the Contracts, Takings, Due Process, and Equal Protection Clauses. The Commission determined that both ACRA and Freehold had made progress toward establishing their unlicensed OTW facilities and absolved them of the obligation to submit deposits. The district court dismissed a suit under 42 U.S.C. 1983 and 1988 on Younger abstention grounds. Subsequently, the Supreme Court decided Sprint Communications v. Jacobs, (2013), clarifying the Younger abstention doctrine. The Third Circuit reversed, finding that the action does not fit within the framework for abstention. View "Acra Turf Club, LLC v. Zanzuccki" on Justia Law

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In 1986, the City of Duluth and the Fond du Lac Band of Lake Superior Chippewa (the Band) entered into several agreements establishing a joint venture to operate gaming activities in Duluth. The agreements required that the Band seek approval before creating any additional Indian Country. In 1994, the Band and the City created a series of new agreements and amendments to the 1986 agreements. In 2010, the Band acquired a plot of land. The Band sought to have the plot placed in trust but did not seek the City’s approval to do so, as required by the 1986 agreements. The City commenced this action in state district court seeking a court order requiring the Band to withdraw its trust application. The district court dismissed the lawsuit, concluding that it lacked subject matter jurisdiction because the Band had only consented to suit in federal court in the 1994 agreements. The court of appeals reversed. The Supreme Court reversed the court of appeals’ decision and reinstated the district court’s judgment for the Band, holding that the Court lacked jurisdiction to decide the issue of whether the Band breached the 1986 agreements because it required interpretation of the 1994 agreements, which was a matter vested in the federal courts. View "City of Duluth v. Fond du Lac Band of Lake Superior Chippewa" on Justia Law