Only in the casino world does the following quotation serve as a logical defense against felony charges: The defendant “disputes the amount owed and filed a counterclaim in the civil lawsuit over the marker asserting that (the casino) forged markers, failed to give him his promised discount, and induced him to take out excessive credit by providing him alcohol and prostitutes, among other arguments.”
The defendant referenced above is Joe Francis, known in Las Vegas as a high roller who likes to gamble at high stakes. If this name sounds familiar, it’s because he’s known throughout the rest of the world as the founder of GGW Brands, the company that produced Girls Gone Wild.
In an order from the Clark County district court dated Sept. 15, when the theft and check-fraud charges against Francis were dismissed, he became known as the guy who, at least for a short while, beat the Wynn Las Vegas out of $2 million. While that may be the end of the charges, it’s only the beginning of the story.
Francis began his gambling exploits at the Wynn during 2005 or 2006, and by 2007 his credit limit had increased to $2 million. During a week in February 2007, he was extended credit to $2.5 million, paying back only about $500,000.
Representatives from the casino met with Francis while he was incarcerated in Reno, then presented his marker to the bank for payment on June 18, 2008, about 16 months after it was issued. During that time, in connection with Francis’ legal troubles, the accounts listed on the marker were frozen by the federal government and closed.
The Wynn, unable to collect the money, contacted the Clark County prosecutor’s office and on Feb. 2, 2011, the State of Nevada filed felony charges alleging Francis committed theft and check fraud. Many of the facts of the case were undisputed, but the amount in controversy, the legitimacy of the markers and allegations of alcohol-induced bad decision-making swirled throughout the case.
Eventually, the charges were dismissed, not entirely because he was induced into signing huge markers by booze and prostitutes, but because the casino failed to collect the debt in its “usual course of business.” The Wynn waited 16 months to collect on a debt that should’ve been collected in 30 days. The fact that the government closed the account doesn’t make Francis a thief or prove he wrote a bad check. The Wynn failed to follow the law, its own internal controls and basic collections procedures, and in so doing proved you really can’t beat the house, but the house can, sometimes, beat itself.
Though things went well for Francis in criminal court, the same could not be said for his civil case against the Wynn, in which the Supreme Court of Nevada upheld a lower court’s summary judgment ruling in favor of the casino.
In holding that the Wynn was owed $2 million for breach of contract and unjust enrichment, among other things, the court pointed out Francis provided “no contrary evidence” to the Wynn’s argument that it was owed $2 million worth of unpaid markers.
Though Francis may have avoided prison time for his failure to pay his markers, he is nonetheless responsible for the debts and other legal fees incurred in result of his Las Vegas exploits. As the saying goes, “the house ALWAYS wins.”
— Marc W. Dunbar represents several gaming clients before the Florida Legislature and teaches gambling and parimutuel law at the Florida State’s College of Law. Follow him on Twitter (@FLGamingWatch) or his website (floridagamingwatch.com).