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High Roller First To Take Gambling Debt Criminal Case To Nevada Supreme Court

Man Sentenced To Prison In 2011 For Failing To Repay $384,000

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A former high-roller gambler in Las Vegas will have his case heard in front of the Nevada Supreme Court this week. The case stems from him failing to repay $384,000 worth of gambling debt to four Las Vegas casinos — the Venetian, the Palazzo, Hard Rock and Caesars Palace.

According to the Las Vegas Review-Journal, California businessman Harel Zahavi was convicted in 2011 of defrauding those casinos, or “passing bad checks.” The crimes were felonies, and he was sentenced to one to four years in prison, in addition to fines.

However, his defense argued that if the conviction was upheld it would essentially amount to sending a person to prison for failing to repay debts. In other words, such a verdict creates a debtors prison, they argued. The prosecution maintained that he committed actual crimes in the process of borrowing and playing with casino credit, and then never repaying. He reportedly had paid off previous debts to the casinos over his years of gambling in Sin City.

The defense also argued that the casinos knew he couldn’t repay and that he had a gambling addiction. There was testimony that he did tell a casino he was broke and owed money across town, but he was still given more money to play with.

“We hope that the Supreme Court will seriously consider and evaluate how casinos abuse the system and realize that the constitutional prohibition against debtor prison needs to prevail over the casinos’ profit margin,” Zahavi’s partner said at the time of the conviction.

The documents he signed did have fine print that warned Nevada casinos could pursue not just civil but criminal charges if he failed to repay the markers. In his defense, Zahavi said his English wasn’t strong enough to read this information.

Zahavi’s case reportedly is the first of its kind to reach the Nevada Supreme Court.

Extending credit is a huge part of the casino business in the Silver State. In 2012, the state wrote off $122 million worth of debt that it failed to collect from customers. As a result, the casinos sometimes turn to the legal system to recoup some of that money.

In 2012, Nevada casinos reported $10.8 billion in overall gaming revenue. Much of that revenue is generated by extending credit to high rollers who do end up repaying. So, the $122 million is a relatively small figure and extending credit is a very lucrative practice for the industry.

 
 
 
 

Comments

MississippiPoker25
almost 4 years ago

The justice system shouldn't have to track down people that don't repay casino credit. If casinos want to extend credit at their own discretion, there should be an insurance to cover this or they should be willing to take the losses. Them expecting the justice system to help re-coup money that was unethically credited to compulsive gamblers is a joke.

 
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robtr3
almost 4 years ago

On the one hand, when these markers were taken the casino (I would imagine) put this guy and others who take markers on notice that Nevada law treats casino markers as checks as if you wrote them out of your own checkbook AND that failure to repay those markers in a timely manner would likewise be treated as uttering bad checks and prosecuted accordingly. People get thrown in jail for writing bad checks all the time. The nature of a bad check is simply that the writer of that check represented to the payee that there were available funds in the account on which the check was drawn to cover that check when, in fact, there weren't; casino markers are much the same thing when they aren't repaid in a timely manner. I THEREFORE DON'T BUY THE ARGUMENT THAT THROWING THIS GUY IN JAIL FOR FAILURE TO REPAY A CASINO MARKER IN A TIMELY MANNER AMOUNTS TO CREATING A DEBTORS' PRISON.

ON THE OTHER HAND, I also see a slim possibility (I doubt it, I would agree with anyone who suggested that one doesn't seem to have much to do with the other, BUT I'm no lawyer so who knows for sure) that this case could somehow impact the case of the poker dealer in Pittsburgh who was improperly raking pots into his toke box; he's facing a $75k fine for that act of larceny while the penalty for a first-time offender committing a crime of similar monetary magnitude outside of a casino would likely get probation at most (and, needless to say, he's appealing the hell out of that fine). The slim possibility I see stems from what some may perceive as the unique treatment of crimes against a casino.

Should be interesting.

 
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