Court overturns ruling on unpaid Venetian marker

The 9th U.S. Circuit Court of Appeals has overturned a lower court ruling that awarded The Venetian an unpaid gambling debt of $499,000 plus interest, saying the judge erred by excluding evidence that the customer had terminated his line of credit.

An attorney for California resident Amine Nehme said the ruling, filed Tuesday in San Francisco, could change how casinos govern lines of credit, or markers. Under Nevada law, if a customer who has been given a line of credit does not repay a marker when gambling is concluded, the casino can submit the marker to the player’s bank for payment.

A three-judge panel of the 9th U.S. Circuit said in its ruling that then-U.S. District Judge Brian Sandoval should not have excluded evidence The Venetian made a mistake by granting Nehme a $500,000 line of credit in September 2005. Seven months earlier, a Los Angeles-area attorney representing Nehme sent a letter to the Strip resort asking that all of his client’s credit lines be terminated.

A Venetian employee signed for the letter three days after it was sent, according to a U.S. Postal Service receipt.

Las Vegas attorney Gary Logan, who argued the case on behalf of Nehme at the 9th U.S. Circuit, said the lawyer sent similar letters to Caesars Palace and Paris Las Vegas, requesting that Nehme’s lines of credit at those resorts be terminated.

However, on Sept. 5, 2005, Nehme signed for a casino marker for $500,000 payable to The Venetian and then lost the entire amount playing blackjack. When the casino sought payment, Nehme’s bank returned the marker saying there were insufficient funds in his account.

The Venetian sued Nehme in July 2007. In 2008, Sandoval, without a hearing, excluded the letter and return receipt. The judge then granted summary judgment to The Venetian on Nehme’s failure to satisfy the unpaid markers.

“The district court’s improper exclusion of the … letter and return receipt was harmful because those pieces of evidence raise a triable issue of fact as to whether Venetian’s right to enforce the marker against Nehme is subject to Nehme’s defense based on common law contract principles,” Judge Carlos Bea wrote in the 9th U.S. Circuit Court’s decision.

Sandoval resigned from the U.S. District Court in September 2009 to begin his successful campaign for governor of Nevada. The 9th U.S. Circuit heard arguments on the case in June.

Logan said Nehme had paid a $1.5 million marker to The Venetian before his attorney asked that his line of credit be terminated.

“He paid every obligation that he owed,” Logan said. “It was The Venetian’s duty to cancel his line of credit and they didn’t do that. The judge refused to allow that information to come back into evidence.”

A Venetian spokesperson was in Singapore and unavailable for comment.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.