Indian Casinos A Bigger Gamble Than You Think

Gary Hoffman was a millionaire, and then he wasn’t. Hoffman hit a jackpot worth over $1.5 million in a New Mexico casino on an Indian reservation, and received all sorts of congratulatory salutations on the casino floor. Once he made it to the executive conference room of the Sandia Casino, however, the tone changed from celebration to intimidation:

Hoffman, a retired Albuquerque city employee, was playing a “Mystical Mermaid” slot machine on the morning of Aug. 16, 2006, when he thought he hit it big.
The nickel slot said he’d won $1,597,244.10. Patrons and casino employees came to congratulate him. He even got a marriage proposal, Hoffman said. But, soon he was asked to come to an executive conference room, where he says he was told the casino refused to pay.
A casino employee “became quite intimidating with me, pointed his finger in my face and said, ‘You didn’t win. We’re not paying you any money. Do you understand what I’m telling you? You’re not getting any money,'” Hoffman said.

The tribe claims the slot machine malfunctioned. It insists that the machine had a maximum payout of $2500, while Hoffman insists that it had a bonus play option which allowed for much higher winnings. The picture that Hoffman took shows a very precise number that the machine displayed of the jackpot, which indicates that the machine had routines that allowed for seven-digit jackpots — and the machine’s manufacturer insists that the machine cannot malfunction in the way the casino asserts.
Hoffman may have no recourse, however. New Mexico does not have the legal authority to give standing for a lawsuit against an Indian casino. Its sovereignty does not reach into the reservations, one reason why casinos can exist there in the first place. Even federal courts would be loathe to intrude on a contract dispute, which leaves Hoffman few choices to remedy his loss.
It’s a costly lesson for those who gamble. Sometimes a jackpot turns into an albatross, and in most American casinos, the house holds all the cards.

24 thoughts on “Indian Casinos A Bigger Gamble Than You Think”

  1. I’ll get hammered for this, but I’ve never been known for tact.
    So does this make the Sandia Casino an “Indian Giver?”

  2. Ooo, that’s harsh. I like it though, Kalroy.
    1st lesson in gambling is: The House always wins.
    They don’t build billion dollar casinos in Las Vegas out of the Seigfried and Roy revenues – it’s because people lose – big.
    PT Barnum will never stop being wrong. Human nature is so predictable, a fool and his money, etc.

  3. Kalroy:
    Wish I had thought of it first. 🙂
    It will probably show up in a headline before too long.

  4. I used to write software for these things, and looking at it, believe it or not, the casino is correct here, and if it went to court they probably should win.
    There’s a little note on every machine in both the Indian casinos and in the ones in Vegas. It says “malfunction voids all pays and plays”. And how do we know this was a malfunction? Basically, we know this because if you look at the pay table, there’s no possible combination of symbols on the reels that could add up to that. So why didn’t the casino just pay the guy? They’re rolling in money right? Well, a really good nickel machine at these casinos makes about $200 a day, $100 is more normal. So basically that would have taken three to five years worth of profit from the one machine, not counting overhead. They’re just not going to do that.
    Now on the other hand, the guy could definitely sue IGT (the slot manufacturer) for the emotional distress he was put under, and he might get a few bucks that way.

  5. If the brakes fail on my car and I rear end another vehicle, whose fault is it?
    It might be the manufacturer of the car, the brakes, but the state assumes it’s me. So will the person I rear-ended. By operating the vehicle, defective or not, I assume primary responsibility for any malfunction.
    That said, who owns the slot machine which coughed up the $1.5M number? Therefore, who prima facie owes the $1.5M? Now, it might be the manufacturer at fault, or even the manufacturer of the software, but as the operator of the slot, Sandia bears the blame. They are welcome to sue the manufacturer if they think the machine had innate defects, but they still owe Mr. Hoffman.
    I’m with Kalroy.

  6. Hoffman’s attorneys can make the Sandia Casino wish they had settled with him. The Casino is a public figure given its advertising such that it must prove actual malice in any libel suit.
    So Hoffman can buy ads, and put up billboards (paid for by his lawyers), in New Mexico accusing the Casino of cheating customers and basically gut its reputation – they’d lose far more money from customers not coming in that from settling with Hoffman).
    Just this story’s publicity is hurting them.
    Sure the Casino could sue Hoffman for libel if he puts up ads calling them cheaters. They can’t prove actual malice given that he has a legitimate dispute with them.
    Worse, if New Mexico has an anti-SLAPP suit law (Strategic Lawsuit Against Public Participation), Hoffman could kill their libel suit immediately and make them pay his attorney fees.
    IMO they shouldn’t have threatened him, and should have just told him there was a dispute, showed him the fine print, told him to get a lawyer and that any possible deal was contingent on him being quiet until his lawyer could talk to their lawyer. And maybe offered $20,000 immediately for a week’s silence until the lawyers could talk.

  7. It’s a bit more complicated than some people here are making it out to be, though. The fact that it’s a reservation means that the usual laws don’t apply–a “sovereign nation” and all that. (Never mind that the “sovereign nation” is funded by federal tax dollars, including their services.) Anything legal involving a tribe is very complicated because of double legal standards.
    I won’t say who’s right or wrong, but I’d be surprised if the guy got a red cent out of his 1.6 million.

  8. “And maybe offered $20,000 immediately for a week’s silence until the lawyers could talk.”
    Tom, partial payment is rarely advised because it is percieved to be an admission of guilt or liability. The 20k would have to be final and binding.

  9. Indian Casinos have helped many tribes, but have caused pain in many others. The stain of tribal disenrollments in CA is growing. Tribes like the Pechanga Band of Luiseno Mission Indians have eliminated 25% of their tribe in order to increase their per capita payments.
    Thanks for bringing this topic up.
    Two sites above where you can learn more about what the politicians in California are allowing to happen.

  10. Here in Washington State, the tribe’s lock on gambling – and the laws they got passed “for off reservation casinos” – are being used to expand to other businesses.
    A tribe can buy a piece of property (anywhere in Washington), then declare “This is part of our reservation”, then the normal sales/property tax laws don’t apply.
    So there’s Home Depots/Walmarts/etc. cropping up on swaths of tribal land. (Because that particular freeway interchange has deep tribal significance, ‘natch.)
    Then the tribes have the members “donate”. Sigh.
    Anyway, they’re moving on to chemical plants, because the reservations don’t have the same regulations for air and water quality.

  11. I’ve said it before and I will say it again — the concept of Indian reservations with any degree of soverignity was, is and remains, a mistake. The Indians lost, end of story. Close the reservations, tear up the “treaties”, close or put the casinos under state regulation, bring the American Indian into the 21st Century and stop the nonsense of a ‘nation within a nation.’
    They are American citizens, no more, no less. No special privileges or rights, no special responsibilities or obligations, American citizens just like the rest of us — “One Nation, under God, indivisible…”
    The Russell Means and New York and Hollywood gliterati of the world will scream and stomp their feet but we will all, the Indians included, be far better off for putting an end to this farse in the end.

  12. I believe that Skip is totally on the money about the slots. I’ve heard of similar stories as this happening in Vegas and Atlantic City. It’s fairly rare, but these slot machines really do malfunction once in a while. I could see a payout like that happening on a dollar slot machine, but on a nickel slot, it sounds too unlikely.
    As far as the last post about the idea of us unilaterally tearing up the treaties with the First Nations peoples (the few that are left), trust me, the U.S. Supreme Court would never allow such a thing to stand in a million years.
    Let the poor souls have their tribal nations and casinos, and people can decide if they want to take their chances or not. We’ve done more than enough to them already as it is.

  13. Kalroy, this would make the tribe “Indian non-Givers”.
    But, they’re idiots also. Paying out a sum like this entices many more to come and loose the mortgage payment because “See Louise? It does happen! We need to go so it happens to us.” Why do you think Powerball has press parties for the winner? For the same reason I put peanut butter in a mousetrap.
    The problem is that by doing this they will now not be able to undo the damage if they decide to come to their marketing senses and pay the sucker.

  14. Rovin,
    That would be true only if the $20,000 was on the claim. It’s a different contract. Had they paid Hoffman $20,000 for legitimate blackjack winnings later that day, it wouldn’t have been an admission of liability. Or had they paid him $20,000 for his year-old Toyota Camry.
    What they would buy with the $20,000 is his silence for a given period – he agrees not to injure the casino’s reputation. And they wouldn’t pay it immediately – they’d wait a week to see if he goes public, i.e., it’s only a unilateral offer. It would also be possible to draw up a written agreement for Hoffman to sign before he leaves the casino, with umpteen conditions in it including that it is not an admission of anything beyond that the casino is concerned about its reputation, and that he is free to blast them after the week.
    Postponing the publicity for a week is effective. Old news is no news.

  15. The machine clearly states its limits are about $12,500, in writing, at the machine.
    This is a frivolous lawsuit.

  16. “A technical report said the slot machine’s computer malfunctioned, and incorrectly made it appear as if Hoffman won more than the machine is able to pay out. The slot machine has a disclaimer that says it pays a maximum of $2,500 and warns that malfunctions void all winnings, said Paul Bardacke, Sandia’s lawyer.
    The technical report, prepared for the casino by Gaming Laboratories International, showed that the machine’s memory malfunctioned, causing the slot to treat a losing spin as a winner — what the report called an “erroneous jackpot.” The machine manufacturer, International Gaming Technology, blamed the problem on a software program.
    Bardacke said Sandia offered Hoffman the maximum payout of $2,500. “
    Dude, you lost. Game Over.
    People, if a disclaimer says something, then believe it. Lawyers write those disclaimers, it’s almost impossible to defeat that in court. The casino offered to give him the maximum amount of he could have possibly won, even though they don’t have a legal obligation to do so. He should have taken the money.

  17. Skip is correct, in that the pay table posted on the machine will you what the maximum payoput should be. That big a win isn’t going to happen in the nickle gaming area. I should know,that’s where I tend to sit, cheapskate that I am.

  18. Hoffman claims that there was a bonus option and the manufacturer claims that the machine cannot fail in the way the Casino described.
    Something smells here. I’d say that it is up to the Casino to prove their case. They haven’t.

  19. I think this is terrific. I really do. Hopefully the casinos will learn that they can make much bigger profits than they are now by simply refusing to pay any winners.
    The fools who play these games will learn a good lesson and may then consider that they would be better off not gambling at all.
    The casinos’ clientèle will go elsewhere and the casinos will go bankrupt and will have to be converted into homeless shelters.
    Money that used to go to the tribes would then go toward the engines of production rather than big contributions to the Democratic Party.

  20. Agree, Dog, but:
    “The fools who play these games will learn a good lesson and may then consider that they would be better off not gambling at all.”
    That will happen the day porn purveyors and pimps start losing money.
    Besides, with legalized gambling becoming more and more pervasive, soon there will be slot machines in every rest room, to provide tax revenue for the states (i.e. “the idiot tax”).
    State lotteries are the biggest ripoffs there are, with terrible odds, they prey on poor people, yet they are more popular than ever.
    And once Delaware legalizes sports betting and starts making a mint off of that, that barrier is going to fall as well.
    In about a decade, states will be legalizing prostitution. That way, you can legally get literally what the states are doing to people (via the lottery), figuratively.

  21. How DARE these money-grubbing, profit-hoarding Native American shysters go back on a deal!
    Geez, one might get the impression they think they’re White or something.

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