Negotiations continue in Harrah’s case against high roller Watanabe

Talks are moving forward to settle the civil and criminal cases that sprang from high roller Terrance Watanabe's $14.7 million gambling debt at Harrah's Entertainment casinos.

A hearing Friday on motions by Watanabe's lawyers to dismiss the high-profile criminal case was delayed until July 9 to give Watanabe, Harrah's and prosecutors a chance to reach an overall settlement, Assistant District Attorney Chris Owens said.

"There are discussions on the civil side to settle, and they're trying to see whether we will be a part of it," Owens said after a 20-minute meeting on the criminal case in the chambers of District Judge Donald Mosley.

Watanabe, who is free on $1.5 million bail, planned to attend what was expected to be a lively hearing, but ended up staying away, as Mosley was informed that the negotiations had become serious.

Watanabe's lead Los Angeles attorney, Pierce O'Donnell, declined to comment as he left Mosley's courtroom.

Harrah's spokesman Gary Thompson also declined to comment.

The criminal theft case, which has attracted national publicity, is set for trial on July 12.

Watanabe, a 53-year-old Nebraska philanthropist, is charged with failing to pay the $14.7 million in markers at Caesars Palace and the Rio during an epic gambling binge in the final months of 2007.

His lawyers have stated in court papers that he lost $189 million at the Harrah's casinos in 2007, which gaming experts said makes him one of the biggest "whales" of all time on the Strip.

Watanabe has alleged in a lawsuit that Harrah's Entertainment, the world's largest gaming company, unlawfully encouraged him to gamble away tens of millions of dollars by keeping him in a constant state of intoxication. He contends employees at Caesars Palace and Rio supplied him with a steady flow of alcohol and prescription painkillers, as his enormous gambling losses piled up.

The Nevada Gaming Control Board, at Watanabe's request, is investigating the allegations. It is illegal under Nevada law for a casino to allow "visibly intoxicated" patrons to gamble. Harrah's has denied any wrongdoing and counter-sued Watanabe in District Court.

Last month, O'Donnell accused the district attorney's office of reneging on a deal to dismiss the theft charges against Watanabe. Owens, however, said Watanabe's lawyers had failed to provide his office with the promised financial records they claimed would absolve their client of wrongdoing.

O'Donnell later filed court papers challenging the constitutionality of the system the district attorney has set up under state law to prosecute gambling debts as bad checks. The district attorney's bad check unit is handling the criminal case.

O'Donnell also argued in separate court papers that it was impossible for prosecutors to establish that Watanabe committed a crime. He said Watanabe had plenty of money in his bank accounts at the time the markers were executed, and Harrah's had permission to access that money.

Owens and Chief Deputy District Attorney Bernie Zadrowski, who runs the bad check unit, have been meeting separately with lawyers for Watanabe and Harrah's since March in an effort to see whether the case could be resolved.

Watanabe hired a well-known Los Angeles crisis management firm to help him fight the criminal charges and drum up publicity to turn the tables on Harrah's.

Contact reporter Jeff German at jgerman@review journal.com or 702-380-8135 or read more courts coverage at lvlegalnews.com.