RENO — If you are going to play, then you have to pay.
That was the clear message that Chief Clark County District Attorney Bernard Zadrowski gave Tuesday to gamblers, lawyers, Nevada justices and about 1,000 students in the Reno High School gym.
He argued for the constitutionality of the state’s “markers law” that requires gamblers to pay their debts when requested, or face civil and criminal penalties.
He also asked the Supreme Court to uphold the lower court conviction of Harel Zahavi, a Middle Eastern baccarat player who failed to pay off a combined $384,000 in markers he took from the Hard Rock, Caesars Palace, The Venetian and Palazzo in the fall of 2008.
While the Supreme Court is not expected to make a decision for several months, the case has major implications for the entire gaming industry, which regularly issues markers to major players.
“Why did your client accept markers if he didn’t have the money to pay it back?” asked Justice Mark Gibbons at one point in the half-hour argument.
Zahavi’s court-appointed attorney, Matt Lay, argued that his client generally gambled “small amounts” and had a history of being “slow to pay,” but the casinos had access to his bank accounts and never should have issued him more credit.
The court record showed Zahavi paid off $700,000 in debts to casinos by selling off property in September 2008. Lay said the casino, knew, or should have known, he did not have money in his bank account shortly after he made these payments and yet they still issued him markers.
Zahavi, who was not present at Tuesday’s oral arguments, was convicted of four counts of passing checks without sufficient funds with the attempt to defraud in 2011. He received 12-month to 34-month prison sentences on each count, but all were suspended and he was placed on probation.
Zadrowski said casinos first check players’ bank accounts and determine their average balances in recent months before they give them credit.
But the marker, similar to a check, can be cashed by the casino at any agreed upon time. usually 30 days or less. The casino “has no affirmative duty to alert” the gambler that his account lacks funds before cashing the check, according to Zadrowski.
When you agree to take a marker, under state law you are agreeing you have sufficient funds now to pay the check, he said.
Lay pointed out that the Hard Rock checked and found Zahavi had $27,000 in his bank account, but it still issued him $100,000 in markers. Other casinos had not checked his bank accounts for two months at the time they gave him more credit, he added.
Because of this knowledge and their failure to stop Zahavi from playing, Lay argued that he could not be convicted of criminal fraud.
But Zadrowski argued that the state law permits the casinos to consider more than bank account records before issuing players permission to use markers. Their property ownership interests and any lines of credit they mighty have are considered. Typically big gamblers have several bank accounts and lines of credit, he said. Zahavi also has been gambling in Las Vegas for 10 years.
The hearing at Reno High School was not unusual. The Supreme Court occasionally holds oral arguments in schools around the state to show students how the court operates.
Reno students fidgeted around during the first hearing, a contested will case. They were mostly attentive during the marker case. Poor acoustics made it difficult for everyone to hear, even those close to the court and the lawyers.
Chief Justice Kris Pickering, a Reno High graduate, allowed students to ask questions of the lawyers following the oral arguments.
One student asked why casinos would continue to issue more credit even if they knew the player did not have sufficient funds.
“Your guess is good as mine,” Lay responded. “It depends on how desperate casinos are for money.”
Zadrowski responded: “It’s a business decision by the casino.”
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