Nevada Supreme Court upholds ‘markers law’

CARSON CITY — The Nevada Supreme Court on Thursday upheld the constitutionality of the state’s “markers law” in a case involving a high roller who failed to pay off a combined $384,000 in markers he took from the Hard Rock Hotel, Caesars Palace, The Venetian and Palazzo in the fall of 2008.

The court, in a unanimous decision, upheld the Clark County District Court conviction of California businessman Harel Zahavi on four counts of drawing and passing a check without sufficient funds and with the intent to defraud. He received 12-month to 34-month prison sentences on each count, but all were suspended and he was placed on probation.

Zahavi appealed his convictions on several grounds, including the argument that the marker law is unconstitutional because it violates a provision in the state constitution that prohibits imprisonment for failing to pay a debt except in cases of fraud.

Zahavi argued on appeal the marker law only required the “intent to defraud” and not other elements of fraud.

But the court disagreed, siding with the state in finding that “intent to defraud” was sufficient to pass constitutional muster.

The court said Zahavi was convicted based on committing a fraudulent act, not on incurring a debt.

At his 2011 trial, Zahavi testified that he started out gambling with cash, about $500 a week, in the 1990s and by 2008 was getting $100,000 in credit lines at some casinos. He described himself as a “very low maintenance” high roller who always made efforts to pay back his markers, even if it meant mortgaging his home and business.

He said he landed in trouble in September 2008 when he continued to gamble after he had refinanced his ice cream business to pay off roughly $700,000 in casino debts around town.

With his losses cleared, The Venetian and Palazzo increased his credit lines, which contributed to a new round of gambling debts for Zahavi, testimony showed.