08/12/2004 11:00PM

Industry dodges a bullet


The gaming industry won big this week. Not at the tables, but in court.

On Tuesday, the U.S. 9th Circuit Court of Appeals refused to allow class-action status to a lawsuit filed by three individuals who are accusing more than 60 gaming companies of civil racketeering.

The suit, originally filed in Orlando, Fla., in 1994 by William Poulos, then later amended in 1996 to include Brenda McElmore and Larry Schreier, claims that gaming companies falsely advertised video poker and other electronic slot machines as games of chance when they are actually determined by control of a computer program.

The suit contends there is a big difference between the electronic slot and video poker machines and the old reel slot machines.

The suit compares live poker, where the deck of cards is shuffled and randomly dealt, to video poker, where computers determine which card will be dealt. This gives casinos the ability to set the chances of winning, the suit alleges.

In the case of the slot machines, the suit contends that the old mechanical slots operated on spinning wheels that created random alignments of symbols - such as cherries or other fruits - on the payoff line. With the electronic versions, the suit contends, computers pre-determine when the symbols line up on the payoff line.

Had it been allowed to become a class action, allowing millions of people who have lost money on electronic slot machines over the years to be included as plaintiffs, the suit could have become the largest and most expensive case ever against the gaming industry.

In a statement following the ruling on Tuesday, Lionel Sawyer & Collins, the high-profile Las Vegas law firm representing the gaming industry, said there was a collective sigh of relief around the globe from casinos and manufacturers when the ruling came down.

The court still must rule on the merits of the case. On Tuesday, the court rejected a motion by the casino industry to dismiss the suit.

Now, the three plaintiffs must decide whether to continue with the lawsuit. The defense attorneys for the casinos reported that the plaintiffs lost only "hundreds of dollars" in the casinos named in the suit. And, the expense of pressing on with an individual lawsuit may not be worth the potential damages they could recover.

Ralph Siraco is turf editor for the Las Vegas Sun and host of the Race Day Las Vegas radio show.