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Jackpot?  Sorry, The Slot Machine Malfunctioned!
Copyright January 25, 1998 By I. Nelson Rose All Rights Reserved

Gambling and the Law is a registered trademark of Professor I. Nelson Rose, Whittier Law School, Los Angeles, CA.
I. Nelson Rose is recognized as the nation's leading expert on gambling law.    He is currently a Professor of Law at Whittier Law School in Costa Mesa, California and acts as a consultant to governments and industry.

man&slot.jpg (3636 bytes)  Jackpot?  Sorry, The Slot Machine Malfunctioned.   Everyone knows it is difficult to win a large slot machine jackpot.  But recently it appeared to be impossible.

    A Quartermania slot machine at Harrah's Ak-Chin Casino in Arizona indicated Hermenia Rodriquez, 64, had won a $330,000 progressive jackpot.  Tribal casino officials scratched the prize, claiming the slot had a defective computer chip.      The screen on a nickel Power Pay slot at the Grand Ronde tribe's Spirit Mountain Casino in Oregon told Nhung T. Housekeeper, 42, that she had won a "mystery jackpot" of $2.9 million.  Tribal casino officials refused to pay.   The casino had never offered "mystery jackpots."  The message was apparently generated by another defective computer chip.

    A bank of progressive $1 Wheel of Fortune slot machines at Sam's Town Hotel & Gambling Hall in Tunica, Mississippi flashed that a jackpot had been won.   Brenda Pickle, 48, said her machine, "locked at $4.7 million and all the other machines dropped down to a million, and locked them out."  The problem Her payline showed a triple bar and two blank spaces, a loser.  Jack W. Ruby, Mississippi Gaming Commission Special Enforcement Agent, investigated and determined that she had won nothing.

     It must be terribly frustrating to think you have won a jackpot, only to be told, "Sorry, the machine malfunctioned."

     It also seems unfair.  After all, when was the last time you heard a casino paid back players who had lost money on a defective slot machine?

"The problem for players is that many administrative agencies are overly friendly to the businesses they are supposed to regulate."

     (Actually, in 1981, Harrah's Marina Casino in Atlantic City came close.  New Jersey regulators discovered progressive slot machine were accidentally underpaying winners.  The casino was ordered to send checks for an additional $63,000 to 19 jackpot winners, who had already been paid.)

     The law on defective slot machines is not nearly as clear as it could, or should, be.  Statutes and regulations for State Lotteries make it clear that a misprinted ticket cannot be paid.  Many State Lotteries and their retail sales outlets have been sued by players who thought they had winners, but did not; and, the Lotteries always win.

     Casino rules are more obscure.  You will not find anything as clear as "A malfunction voids a jackpot."  But, the legalese indicates casinos are not really supposed to pay false jackpots.

     In New Jersey, for example, casino regulations do not actually say a casino may not pay on a malfunction.  But a casino which pays a player not entitled to the prize cannot deduct the payment from its revenue for tax purposes.

     More startling, there are no reported appellate court cases dealing with casino players who have been denied slot machine jackpots on the ground the devices were defective.  Casinos are more concerned with public relations than State Lotteries.  Wishing to avoid bad press, and the possible creation of a bad precedent, casinos appear willing to settle, paying part of the jackpot, even when nothing is truly owed.      A casino willing to take a case through the court system would probably prevail.

The law does not require any gambling operator to pay a player who has not really won.

     The reasoning is simple

1)  Gaming operators make their profits by having a statistical edge in every game.  This requires that the games pay off as designed.  A single false jackpot on a wide area linked progressive could wipe out a small casino.  Courtenay Thompson of the Oregonian reported that the disputed $2.9 million jackpot is equal to one-tenth of Spirit Mountain Casino's profits for 1996.

2)  Gambling is an all-cash business that has always attracted organized crime.   An easy way for casino insiders to skim money is to pay off confederates posing as players.  If malfunctions were paid, regulators would have to investigate each "winner" to make sure the "malfunction" was not the result of a pre-arranged conspiracy.

3)  Legal gambling is still viewed as a morally suspect industry and is not given all the rights taken for granted by other legal businesses.  Gambling debts, for example, are almost never enforceable in a court of law.  Unless there is a specific statute stating otherwise, casinos may not sue players and players may not sue casinos.   If a casino refuses to pay, patrons can only file complaints with an administrative agency, like the Nevada Gaming Control Board.

"The law does not require any gambling operator to pay a player who has not really won."

     The problem for players is that many administrative agencies are overly friendly to the businesses they are supposed to regulate.  And if the Gaming Control Board rules in favor of the casino, the complaining player has very little chance of having a court overturn that decision.  Courts do not want to get into the business of reviewing administrative rulings and being swamped with appeals.

     This does not mean a player who is denied a jackpot is completely out of luck.  Harrah's paid the $330,000 jackpot to Rodriquez out of its own pocket, after the frustrated slot player took her story to the press.

     Maybe she could not win in a court of law.  But in this higher court, the court of public opinion, it was no contest.

Last Update: April 12, 1998