by Emily Kaplan1
The casino industry in the United States is thriving. In 2018, consumers spent a record $41.68 billion on casino gaming, a 3.5 percent increase from the previous year.2 There are currently 24 states with commercial casinos, and half of them reported reaching an all-time revenue high in the last two years.3 Part of this revenue comes in the form of markers, which operate as short-term loans. They enable patrons to gamble with money they have in their bank account, but not in their physical possession. Markers are similar to checks in that a patron may not sign a marker for more than he has in the bank. A casino will ensure a patron seeking a marker has sufficient funds in his bank account before allowing that patron to take out a marker, which he must pay if his gambling results in losses.4 New Jersey and Nevada, states with a significant commercial casino presence, allow patrons to take out markers.5
When a casino patron signs a gambling marker with a casino, they are entering into a contract with that casino.6 The patron may, therefore, raise any common law contract defense.7 Of the many existing defenses enabling a party to avoid a contract, the voluntary intoxication defense has garnered attention in the casino contract—likely because of the association between alcohol consumption and gambling. In general, alcohol lowers inhibitions and impairs judgment.8 In the casino context, alcohol consumption has been associated with larger average bets and a more rapid loss of all initial funds.9 Consequently, casinos have ample incentive to encourage their patrons to drink alcohol. Every commercial casino in this country serves alcohol in some capacity, and over half of states with a casino presence allow casinos to provide complimentary alcohol.10
This inevitably results in intoxicated patrons, which in turn enables those patrons to assert the voluntary intoxication defense. If the defense is asserted successfully, the patron will be excused from paying the marker. This Contribution argues that courts should refrain from resolving cases involving voluntary intoxication defenses at the summary judgment stage because summary judgment should be granted sparingly in matters involving state of mind, and because granting summary judgment in this context creates perverse incentives for casinos to over-serve alcohol to their patrons. In light of court decisions recognizing the voluntary intoxication defense in a casino context, casinos should generally not be able to use summary judgment as a tool to profit off of potentially intoxicated casino patrons, so long as the patron successfully disavowed the contract.11
In Anderson v. Liberty Lobby, the Supreme Court articulated that courts must grant summary judgment with caution.12 A party is entitled to summary judgment only if they demonstrate there is “no genuine dispute as to any material fact.”13 A dispute is “genuine” if the “evidence is such that a reasonable jury could return a verdict for the nonmoving party,” and a fact is “material” if it could “affect the outcome of the suit under the governing law.”14 When considering whether there are genuine disputes over material facts, “[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.”15 When a genuine dispute regarding material facts exists, the resolution thereof must be left to a fact-finder.16
A majority of circuits have concluded that summary judgment is rarely appropriate where state of mind is at issue.17 In Charbonnages de France v. Smith, the Fourth Circuit applied the maxim to a contract case, extrapolating that “disputes about whether a contract has or has not been formed as the result of words and conduct . . . are quintessentially disputes about ‘state of mind’,” and therefore refused to grant summary judgment.18 The court reached this conclusion because whether state of mind can be determined as a matter of fact—as the Supreme Court in Anderson requires for a grant summary judgment—will depend on “conflicting inferences to be drawn from evidence so likely to be circumstantial or, if direct, self-serving.”19
The voluntary intoxication defense explicitly involves issues relating to the parties’ states of mind. It allows a party who entered into what would have been a legally valid contract to avoid the contract if the other party knew or had reason to know of the intoxication, and the party claiming intoxication was either (1) unable to understand in a reasonable manner the nature and consequences of the transaction when he signed it, or (2) unable to act in a reasonable manner in relation to the transaction.20 Whether a patron was sufficiently intoxicated as to render him incapacitated and whether the casino knew or had reason to know of that incapacitation are both questions of fact that should be reserved for a jury in most cases.21 This is particularly true in light of the fact that when a casino moves for summary judgment in these cases, all inferences must be resolved in favor of the patron.22
Courts should be wary about dismissing voluntary intoxication defenses at the summary judgment stage for two main reasons. First, the principle that summary judgment should be granted sparingly in matters involving state of mind is even more applicable when intoxication, and knowledge of the same, are at issue. Second, courts granting summary judgment for casinos on voluntary intoxication defenses create perverse incentives for casinos to over-serve alcohol to their patrons.
Alcohol affects different individuals in distinct ways. Depending on a range of factors—including the consumer’s biological sex and weight, whether it is mixed with other medication, and the way in which it is consumed—a quantity of alcohol that would inebriate one individual will barely have an impact on another.23 Therefore, a court will rarely be able to decide as a matter of law whether a casino patron was sufficiently intoxicated as to render the patron unable to understand the nature and consequences of their actions.24 It would be just as difficult for a court to determine as a matter of law whether a casino had reason to know of a patron’s intoxication. Intoxicated individuals do not exhibit uniform behavior—where some will have difficulty speaking or walking, others may exhibit impaired judgment or impaired social functioning.25 Many behaviors typical of intoxicated individuals—for instance, inappropriate or aggressive behavior26—could also be typical of a casino patron having a losing day. While a fact-finder could make this reasonable inference, they could also come to another conclusion: the patron in question was exhibiting inappropriate behavior because they were so intoxicated that they did not understand the nature of their actions. Either way, where reasonable minds may differ in evaluating the evidence before them, it should be up to the trier of fact to draw conclusions from that evidence.27
In addition, policy considerations weigh against granting summary judgment on voluntary intoxication defenses in the casino context. Casinos operate in large part with the money patrons spend gambling. Research demonstrates that intoxication may increase both the length of time patrons spend at gaming tables and the amount of time they spend while they are there.28 The logical conclusion, therefore, is that casinos benefit from intoxicated gamblers. Considering that casinos in thirteen states serve complimentary alcohol to patrons,29 casinos seem to be aware that the more alcohol gamblers drink, the more money a casino will make.
Some may argue that by allowing these cases to proceed to trial, patrons will be able to take advantage of casinos. Patrons will bet big, keep their money if they win, and sue if they lose. While not without merit, this concern is unlikely to be realized. First, there is no evidence suggesting that casino patrons track how often and for what reasons a court grants or denies summary judgment on voluntary intoxication defenses. If they alter their gambling behavior, it will likely be for other reasons. Second, even if patrons were aware that they may be able to assert a defense that could entitle them to keep their money, prevailing past the summary judgment phase does not guarantee success at trial,30 and litigation is extremely expensive.31
As the law currently stands, there is no drastic split with regard to the voluntary intoxication defense: courts in states with a large casino presence recognize it in a casino context.32 There may be a valid argument for barring the defense in this context, but because that is a policy decision, separation of powers demands that the legislature—not the courts—address the issue. As long as the defense is recognized, it cannot be merely illusory. There would be no point in maintaining the defense if casino patrons could never actually prevail on it—or at the very least, make it to trial. Moreover, because fact finders are best situated to evaluate a party’s state of mind, summary judgment should not be granted in these cases as the defense implicates the state of mind of multiple parties. Finally, should courts exhibit a willingness to get rid of cases at the summary judgment stage where a voluntary intoxication defense is asserted, they will enable casinos to take advantage of their patrons.
1. Emily Kaplan is a J.D. Candidate (2021) at New York University School of Law. This piece is a commentary on the problem presented at the Frank A. Schreck Gaming Law Moot Court Competition hosted by the University of Nevada, Las Vegas School of Law. The question addressed whether summary judgment on a casino patron’s request for a declaratory judgment was appropriate. The views expressed in this article do not necessarily represent the views of the author on this point of law. Rather, this article is a distillation of one side of an argument assigned to the team the author represented at the Schreck Gaming Law Moot Court Competition.
2. Am. Gaming Ass’n, State of the States 2019: The AGA Survey of the Commercial Casino Industry 1, https://www.americangaming.org/wp-content/uploads/2019/06/AGA-2019-State-of-the-States_FINAL.pdf [hereinafter State of the States].
3. Am. Gaming Ass’n, Fact Sheet to State of the States 2019: The AGA Survey of the Commercial Casino Industry, https://www.americangaming.org/wp-content/uploads/2019/06/State-of-the-States-2019-One-Pager.pdf.
4. See Nguyen v. State, 116 Nev. 1171, 1172–73 (2000) (“An applicant may receive all or a portion of the credited amount at a gaming table in the form of a ‘marker.’ The marker . . . contains a stipulation whereby the payor represents that the amount drawn by the marker is on deposit in the referenced financial institution, and that he guarantees payment. The player and a casino representative sign the marker. The player then exchanges the marker for gaming tokens or ‘chips,’ which may be exchanged for currency with the casino cashier.”).
5. Id.; see also Hakimoglu v. Trump Taj Mahal Assocs., 876 F. Supp. 625, 633 (D.N.J. 1994), aff’d, 70 F.3d 291 (3d Cir. 1995).
6. Hakimoglu, 876 F. Supp. at 633 (“[W]hen a casino comes to court to enforce a marker debt against a patron, it seeks to enforce a contractual debt.”).
7. Id.; see also Adamar of New Jersey, Inc. v. Luber, No. 09-CV-2800 NLH KMW, 2011 WL 1325978 at *3 (D.N.J. Mar. 30, 2011) (“[E]xcessive intoxication is also a viable defense to contracts arising between casinos and their patrons.”); Lomonaco v. Sands Hotel Casino and Country Club, 259 N.J. Super. 523, 530 (N.J. Law Div. 1992) (holding that common law contract defenses such as incapacity apply in casino settings).
8. Why Alcohol Lowers Inhibitions, Alcohol.org, (Apr. 8, 2020), https://www.alcohol.org/effects/inhibitions/.
9. Jessica M. Cronce & William R. Corbin, Effects of Alcohol and Initial Gambling Outcomes on Within-Session Gambling Behavior, Experimental and Clinical Psychopharmacology, 18(2) (2010) https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3039524/.
10. State of the States, supra note 2 at 8–11.
11. To prevail on a voluntary intoxication defense, the party seeking to avoid the contract must disavow it within a reasonable amount of time upon regaining capacity. Restatement (Second) of Contracts § 16 (Am. Law Inst. 1981). This Contribution will not analyze this component of the defense, because it does not carry any particular interest or special significance in the casino context. If a contract is not properly disaffirmed, a patron will not be able to avoid their obligation, regardless of their level of intoxication.
12. 477 U.S. 242, 255 (1986).
13. Fed. R. Civ. P. 56.
14. Anderson, 477 U.S. at 248.
15. Id. at 255.
16. Id. at 250.
17. See, e.g., Charbonnages de France v. Smith, 597 F.2d 406, 414 (4th Cir. 1979) (“Implicit in these basic rules [of summary judgment] is a consequence, frequently expressed as a maxim, that summary judgment is seldom appropriate in cases wherein particular states of mind are decisive as elements of claim or defense.”); Denny v. Seaboard Lacquer, Inc., 487 F.2d 485, 491 (4th Cir. 1973) (“Where state of mind is at issue, summary disposition should be sparingly used.”); Croley v. Matson Nav. Co., 434 F.2d 73, 75 (5th Cir. 1970) (finding summary judgment inappropriate because reasonable minds could differ with respect to whether an employer knew a product was dangerous, creating a question of fact properly reserved for a jury); Empire Electronics Co. v. United States, 311 F.2d 175, 180 (2nd. Cir. 1962) (collecting cases from the Fifth, Seventh, and Ninth Circuits that support the proposition that courts should be wary of summary judgment motions when “questions of motive, intent, and subjective feelings and reactions” are at issue).
18. 597 F.2d 406, 414 (4th Cir. 1979).
20. Restatement (Second) of Contracts § 16 (Am. Law Inst. 1981).
21. See Wynn Las Vegas, LLC v. Tofani, No. 69936, 2017 WL 6541827 at *1 (Nev. App. Dec. 14, 2017) (upholding denial of summary judgment because evidence of intoxication created “material issues of fact as to whether [the patron] understood that a valid contract existed” when he signed gambling markers); Pierzchala v. MGM Grand Detroit, LLC, No. 302874, 2013 WL 2662881 at *1 (Mich. Ct. App. June 13, 2013) (holding that whether a casino patron lacked capacity was a question of fact); Luber, 2011 WL 1325978, at *5 (concluding that the question of whether the casino patron was sufficiently intoxicated must be left to a jury); Heward v. Sutton, 75 Nev. 452, 455 (1959) (“Contractual capacity is a question of fact to be resolved in light of the surrounding circumstances.”).
22. See Tolan v. Cotton, 572 U.S. 650, 656 (internal quotation marks and citation omitted) (“In making that determination [whether to grant summary judgment], a court must view the evidence in the light most favorable to the opposing party.”).
23. Factors the Affect How Alcohol is Absorbed & Metabolized, Stan. Univ., https://alcohol.stanford.edu/alcohol-drug-info/buzz-buzz/factors-affect-how-alcohol-absorbed (last visited Mar. 16, 2021).
24. For example, in Adamar of New Jersey, Inc. v. Luber, there was no dispute that the casino patron “received alcohol beverages throughout the night when he gambled.” 2011 WL 1325978, at *5. There was also no dispute that the patron—a notoriously high roller—was able to place all of his bets, walk normally, and speak coherently. Id. at *1, 4. Bearing all of this in mind, the court acknowledged that it would likely be difficult for the patron to succeed at trial. Nevertheless, and despite the parties’ general agreement on the underlying facts, the court declined to grant summary judgment against the patron because the “inferences to be drawn from that evidence” varied, and consequently “must be determined by the fact-finder and not this Court.” Id. at *5.
25. Alcohol Intoxication, Am. Psychol. Ass’n Dictionary of Psychol., https://dictionary.apa.org/alcohol-intoxication (last visited Mar. 16, 2021).
27. See Croley, 434 F.2d at 75 (“Even when the facts underlying the issue of negligence are undisputed, the issue must still be submitted to the jury if reasonable men could reach different conclusions and inferences from those facts.”).
28. See Cronce, supra note 9 (“[A]lcohol use may contribute to longer duration of gambling episodes and increased amount of money spent.”).
29. State of the States, supra note 2 at 8–11.
30. See Anderson, 477 U.S. at 249–50 (“[T]he issue of material fact… to entitle a party to proceed to trial is not required to be resolved conclusively in favor of the party asserting its existence.”) (internal citation and quotation marks omitted).
31. The median cost of litigation in a typical breach of contract claim is $91,000. See Paula Hannaford-Agor & Nicole L. Waters, Estimating the Cost of Civil Litigation, caseload highlights (Nat’l Ctr. for State Courts), Jan. 2013, at 7, https://ncsc.contentdm.oclc.org/digital/collection/civil/id/94.
32. See e.g., Hakimoglu, 876 F. Supp. at 633; Tofani, 2017 WL 6541827 at *1–3.