By Ray Hong

A brief traverse into the legal dimensions behind Casino-Gambler disputes in Singapore: What happens if casinos “lose but don’t pay money”?*

Consider the following scenario: On one of her days off, your foreign-domestic helper Maria decides to visit one of the local casinos (she is not subject to the $100/ 24-hour entry or $2,000 “valid annual membership” requirement since she is not a permanent resident or Singaporean).

Whilst she is there, Maria finds a one dollar coin beside a jackpot machine. Thinking that it could be her lucky day, Maria slots the dollar into the Lucky Merlion jackpot machine and plays a game of jackpot. It is indeed her lucky day! She gets 3 lucky Merlions in a row and wins 2.8 million Singapore dollars (28 is Singapore’s lucky number according to some people here). Maria is ecstatic.

However, the casino is less than pleased. They tell Maria that she couldn’t have been so lucky, that the machine had malfunctioned and that her winnings are really only S$600 (this is what Maria earns in one month, of which $300 is paid to her agent). Maria is very upset and can’t perform her household duties. She is upset because if she had won the S$2.8 million, she wouldn’t have to perform such household duties anymore in the first place. Maria cries as she makes your Milo drink on Monday morning. As a law student with a heart (or probably because you want to stop fluids from her nose and eyes from falling into your Milo drink), you are motivated to advise poor Maria.

In such a case, you should tell Maria that the casino is required to notify an inspector to investigate the matter and make a decision as to the dispute. If the casino failed to do so, she can lodge a complaint to the Casino Regulatory Authority (“the Authority”) which can decide to impose disciplinary action on the casino. This is pursuant to the Casino Control Act (Cap 33A, “CCA”), Part VI Division 3, titled ‘Disputes between casino operator and patron’, section 111. If Maria is not satisfied with the inspector’s decision, she can make an appeal to the Authority under section 112. If the Authority feels that there are valid grounds for her appeal, they can appoint a committee to reconsider the decision of the inspection (section 112(4)). If Maria is still dissatisfied with the decision of the committee, she make one last appeal to the Authority whose decision will be final (section 114).

That much is simple enough. What if the Authority still makes an adverse decision against Maria? Does Maria have a right to judicial review of the decision? If not, can Maria sue the casino under a civil cause of action to recover her ‘winnings’? With regard to the first question, as Maria’s legal adviser, it is important that you should know that this part of the CCA draws inspiration heavily from the Nevada Licensing and Control of Gaming Act (in Las Vegas). The only material difference between the two is that the Nevada Act allows for further Judicial Review under section 3662 but section 114 of the CCA provides that decision of the Authority is final. In other words, Maria will probably have no option to ask the courts here to review the decision of the Authority. There are probably good policy reasons not to allow the courts to get involved. For one, it seems unlikely (though not impossible) that judges will have the “technical knowledge” underlying a game of baccarat or laying of odds in a jackpot game. But more importantly, imagine the moral associations that can be drawn from a court who decides who is the winner in a gambling game over another party. It could be taken as a validation of gambling itself. Of course gambling is legal in Singapore, but the government and courts would take care not to parade its legality against moral sentiments held by some segment of the population that gambling nevertheless remains immoral.

In light of the CCA and its provisions governing casino-patron disputes, can a patron like Maria bring a civil action outside of the administrative process offered under the Act to recover her winnings? This is where the real controversy rages. In Nevada itself, “a party may assert an action outside the administrative process to recover gambling losses sustained due to casino fraud” (Erickson v Caesars Palace, 942 F.2d 694). This was said to be the position in English law which applied at the time Nevada became a state and was followed in Berman v. Riverside Casino Corp., 323 F.2d 977.

The main difference between this avenue of recovery (if it is allowed) and the one under section 111 of the CCA is that under the latter, a party is suing to recover a gambling debt or alleged winnings owed to him because he has won the gambling game (i.e. the casino owes him his winnings). In contrast, what it means to ‘assert an action outside the administrative process of the Act’ is that the patron is bringing a common law civil action and must frame his claim as one for the recovery of losses from fraud or deceit, rather than as a debt or winnings owed to him (i.e. for the loss the casino has caused him). The differences are both procedural and theoretical. It should be noted that in Maria’s case, bringing an action for fraud or deceit could theoretically allow her to make a claim for the $2.8 million as well since the measure of damages for fraud and deceit are expectation damages.

Whether Singapore should in due course take the same position as Nevada is an issue to be carefully considered. It would therefore perhaps be apt to briefly delineate some the boundaries of such considerations here. For starters, one has to consider if doing so would bring the judicial process into disrepute. This could arguably go either way. On the one hand, courts can be seen as being the arbiters of justice by punishing fraud or deceit. On the other hand, seeing how the measure of damages for deceit can include expectation losses, one has also to consider whether a person who wagered $1 should be able to recover $2.8 million through the judicial process. There is a real ‘sticky’ moral dimension to this debate.

Another consideration is to question whether allowing such ‘losses’ (or winnings) to be recovered can at all rest on rigorous legal grounds. Say the cause of action is for fraudulent misrepresentation in a normal contracts case, awarding expectation damages could perhaps be justified on grounds that the innocent party was persuaded to enter into the contract on some expectation based on the misrepresentation that she would be getting something she wanted in return. Can a patron to a gamble say that she had such legitimate expectations? Finally, one has also to consider what at all fundamentally grounds a claim that the casino had represented it would pay someone in a wager if it loses. Can the patron for example claim a contract existed between her and the casino? Should contract law even be utilised for this way?

As casinos become a permanent fixture on Singapore’s landscape, it is only in due time that disputes arising between casinos and patrons would have to be addressed by the law. As the experience in Nevada and many countries with casinos around the world indicate, these disputes will eventually show up on the doorstep of the courts. Perhaps more thought should be given as to whether the judicial process can and should at all be utilised to accommodate the resolution of such disputes, and if they shouldn’t whether the current processes adequately protect patrons of casinos such as poor Maria.