Zoggolis v. Wynn Las Vegas

In an action by a patron against a casino owner, the patron does not have to go before the Nevada Gaming Control Board, when the debts are evidenced by credit instruments.

Konstantin Zoggolis entered into a credit agreement with Wynn Las Vegas (“Wynn”), a casino in Las Vegas, Nevada, to extend a credit line to him for $150,000. The credit agreement provided that Zoggolis would sign a marker, similar to a check, before Wynn could draw on the credit. At some point, Zoggolis instructed Wynn, in writing, to limit his credit line to $250,000. Wynn allegedly continued to draw on the credit line until Zoggolis owed $1.3 million. Zoggolis then brought a breach of contract claim against Wynn for not honoring the $250,000 limit, and sought recoupment of $1,050,000. Generally, a gambling debt is not legally enforceable. The Nevada Legislature recognized the rule in Nevada Revised Statute § 463.361(1), which states that “gaming debts not evidenced by credit instruments are void and unenforceable and do not give rise to administrative or civil cause of action.” However, the Legislature created an administrative remedy for patrons and licensees when a dispute arises under N.R.S. § 463.361(2): “claim by patron of licensee for payment of gaming debt not evidenced by credit instruments may be resolved…by Gaming Control Board.” The District Court dismissed the suit and agreed with Wynn that the Nevada Gaming Control Board had exclusive jurisdiction. On appeal, the Ninth Circuit disagreed with the District Court, and held that the markers used by Wynn to evidence Zoggolis’ debt are credit instruments. Therefore, Zoggolis’ claim does not fall under N.R.S. § 463.361, and instead can be brought like any other suit to enforce a negotiable instrument. REVERSED and REMANDED.