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Gambling venues, province owe duty of care: study

|Written By Ron Stang

WINDSOR - The province’s burgeoning gambling industry is setting itself up for lawsuits, analogous to liquor being served to intoxicated patrons in bars, by not effectively supervising how so-called problem gamblers are treated by gaming establishments.

A study by lawyers at Sutts Strosberg posits that gaming venues and the province owe problem gamblers a duty of care.

Acknowledging the province’s gambling industry is relatively new - legislation permitting the government to oversee casinos and “games of chance” was only passed in 1993 - “there is no such developed body of common law” in the area of the gaming industry or duty of care, says William Sasso, a commercial litigator with Sutts, Strosberg LLP in Windsor and a faculty member at the University of Windsor.

Sasso and Jasminka Kalajdzic, a specialist with Sutts Strosberg in civil litigation and professional negligence, were co-authors of an opinion commissioned by the Ontario Problem Gambling Research Centre, the Guelph, Ont.-based, arms-length government agency whose mandate is to study the prevention and treatment of problem gambling.

Their task was to determine whether the government, its agency the Ontario Lottery and Gaming Corp. (OLG) and individual casinos and slots operators, could be held liable for harm suffered by problem gamblers.

“The investigators conclude that it is arguable [that the institutions] owe a positive duty of care to assist the problem gambler in certain circumstances,” they say in their summary.

The American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders classifies “pathological” gambling as an impulse-control disorder. A 2001 study estimated 4.8 per cent of adults who gambled were problem gamblers and they contributed 35 per cent of all gaming revenue.

“Clearly, government-sponsored gambling comes at a significant social cost to a vulnerable segment of society,” says the study.

Yet the authors say the government has not put anything into its gaming law offering protection to this group, unlike in Nova Scotia where legislation explicitly states gaming activity be carried out in a way “to minimize the opportunities that give rise to problem gambling” and that casino operators prohibit from premises “individuals who appear to be addicted to gambling.”

Ontario, by contrast, has only fleetingly “acknowledged that problem gambling is a social problem” yet has limited its scope of official activity to areas like problem gambling research and a helpline.

Moreover, it has no regulations “prohibiting casino operators from permitting entry to known problem gamblers or requiring casino operators to eject the problem gamblers after they have shown themselves to be unable to control their gambling habit.”

“So,” Sasso tells Law Times, “the question is whether we need to address this as a matter of good social conscience or indeed if we don’t, as a province, whether or not Ontario could be held accountable in a court of law.”

With no statutory provisions existing to aid a problem gambler from taking legal action the gambler can resort to a negligent tort action, Sasso and Kalajdzic write. And the most analogous area of law is the duty of care found in commercial host liability relating to the sale of alcohol to people who’ve been drinking excessively.

“Canadian courts have imposed on individuals who stood to benefit economically from a relationship a duty to take affirmative action to assist or prevent the other person from being injured within the context of that relationship,” they say.

The leading alcohol-related case is Jordan House Ltd. v. Menow dating from 1973 in which the Supreme Court of Canada found that the innkeeper and staff owed a duty of care to the patron.

The authors also reference an October 2005 Ontario Superior Court case (Edmonds v. Laplante et al) in which the OLG was found to have a duty of care in defrauding a customer out of $250,000 in the sale of a lottery ticket, a case recently highlighted on CBC-TV’s the fifth estate.

They call it a “precedent” because it answers the question of whether the province and  gaming venues owe a duty of care. “Under the current state of the law the answer would appear to be ‘yes.’”

Sasso tells Law Times it was not their intent to recommend the government change its policies to prevent legal action being taken against it.

“All I’m doing is providing an answer . . . to the question as to whether this is a legitimate legal issue, and I think it is,” he says.

Or, as he and Kalajdzic write, “a problem gambler will likely succeed” in establishing the casino operator and government owe a duty of care.

Michael Lipton, of Toronto’s Elkind Lipton & Jacobs LLP and president of the International Masters of Gaming Law, says Sasso and Kalajdzic’s opinion “makes a good deal of sense.”

He notes gaming operators and the government simply aren’t “taking a strong enough role” in preventing problem gamblers from continuing to gamble.

“I just think they could put their oar in the water more, so to speak, and do more about it.”

One recent duty of care gambling case, a claim for $3 million by Hamilton, Ont., businessman Gabe Macaluso against Casino Niagara, has now been “resolved,” his lawyer Roger Yachetti, says, indicating he could produce no further details.

Judith Glynn, director of grants operation for the Ontario Problem Gambling Research Centre, says her agency commissioned the opinion to “examine the risk exposure” and it is now “giving us some direction in terms of what we can and should be doing to reduce risk for gamblers.”

She added that the question has never been tested in Ontario nor Canadian courts and the Sutts Strosberg’s opinion examines the kind of legal criteria a judge would require in making a ruling on duty of care.

“And it’s exactly that information that gives us direction in terms of how we reduce risk.”

Glynn’s agency and the OLG announced last month an innovative pilot project to test how frequent players respond to mailed messages discussing key signs of risk and show them how to self-assess and link to counselling.

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