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Research Project (Casino Markers and BK)

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  • Research Project (Casino Markers and BK)

    Ok, this might be fun. I have a research project for whoever would like to try.

    Question: what is the status of Casino Markers in a BK. Can they be discharged?

    Note: Please site your sources and provide links. Ideally, I would like to see a Bankruptcy Court case

    My preliminary google has not yield good results as of yet.

    Some of the issues you will encounter.
    Nevada considers markers more like checks, not IOU's. In many ways, they are like payday loans. But, at the same time, if you default, the casino now has a "claim" against the gambler. The BK code simply defines 'Debt' as "liability on a claim".

    Good luck and good hunting.
    Last edited by HHM; 12-18-2008, 05:16 PM.

  • #2
    It depends.

    If so, then there are several questions that I would consider as to whether it's dischargeable.
    1. Is a Marker considered an extension of credit, or it the underlying instrument (the check) considered to be like a payday loan, or is it presentment for services (underlying State non-bankruptcy law). (If it's a line of credit, then the debt is dischargeable... if it's a backed by a check, the underlying law prevails).
    2. whether a bad check is civil or criminal (underlying State non-bankruptcy law)
    3. Whether the Casino holding the marker presses charges pre-discharge and objects to dischargeability


    My first scenario would say it's not Nevada (where we know it's criminal), and the Marker is an extension of credit, and it's a civil matter on the check, and regardless of whether the Casino files suit or presses charges, then the debt it Dischargeable.

    My second scenario, regardless of Nevada, is if the Marker is not an extension of credit. Also, that a check was uttered with or without the intent to defraud. That the underlying non-bankruptcy law regards uttering a negotiable instrument which one knows wont' be paid at the agreed upon time of presentment... as a criminal matter. I would say it's not dischargeable because you can't discharge any debt due to a crime. 11 USC 523(a)

    Having wrote that, I would argue that the marker was an extension of credit. That the check was a payment on the credit account, and as such, uttering a "bad check" for payment on a credit account is not present consideration, and therefore is non-criminal. Although that won't fly in Nevada and a couple of other States.

    Research:
    1. Norwood, John, “Are Casino Markers Credit Instruments?” Clarke County Bankruptcy
      Attorneys, March 13, 2003. Note: I can't find this refrence anywhere
    2. http://www.gaminglawmasters.com/mslj/02-NORWO.htm Note: lots of caselaw here
    3. MANDALAY RESORT GROUP v.RICHARD BRADLEY MILLER http://207.41.19.15/web/bap.nsf/0/64.../?opendocument
      Note: jurisdiction problems, but looks at enforce-ability
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog


    I am not an attorney. Any advice provided is not legal advice.

    Comment


    • #3
      It looks like 99% of the cases where a marker would end up being a debt are because some type of fraud has been committed. When the debtor signs the marked he/she is certifying the funds are available at the bank to cover the marker.



      With the expanding legalization of gambling and the pervasiveness of casino
      business operations almost nationwide, other courts have been called upon to analyze
      the legal effect of markers. Louisiana and Nevada have both concluded that a marker
      falls within the definition of a check under the UCC and markers are therefore
      enforceable under state bad check criminal enforcement laws
      http://www.ca8.uscourts.gov/opndir/02/05/011949P.pdf
      Chapter 7 07/30/2008
      341 09/17/2008
      Discharge 11/21/2008

      Comment


      • #4
        Originally posted by TEW View Post
        It looks like 99% of the cases where a marker would not be dischargeable debt because some type of fraud has been committed. When the debtor signs the marked he/she is certifying the funds are available at the bank to cover the marker.
        A marker is not really a debt but a payment for chips.



        With the expanding legalization of gambling and the pervasiveness of casino
        business operations almost nationwide, other courts have been called upon to analyze
        the legal effect of markers. Louisiana and Nevada have both concluded that a marker
        falls within the definition of a check under the UCC and markers are therefore
        enforceable under state bad check criminal enforcement laws
        http://www.ca8.uscourts.gov/opndir/02/05/011949P.pdf
        type on first post
        Chapter 7 07/30/2008
        341 09/17/2008
        Discharge 11/21/2008

        Comment


        • #5
          Thank you for your help. I still need to read the text of the case you cited, but thank you for your work so far.

          Comment


          • #6
            I found this one too
            http://www.google.com/search?hl=en&c...&start=10&sa=N
            Chapter 7 07/30/2008
            341 09/17/2008
            Discharge 11/21/2008

            Comment


            • #7
              I discharged markers from several Nevada casinos in a chapter 7 in 1997.

              My lawyer supposedly at one time worked for NJ DGE (Division of Gaming Enforcement) and there were no objections, nobody came to extradite me to NV, etc.
              Last edited by catleg; 01-17-2009, 06:49 PM.
              filed chapter 13..confirmed...converted to chapter 7...DISCHARGED!

              Comment


              • #8
                What in the heck is a marker?
                Chapter 13 filed 08/07 60 month plan... $250.00 per month. 2 years to go!

                Comment


                • #9
                  It's an IOU to a casino that you sign when you take out an advance on your credit line, it is printed on check stock as a post dated check which they will deposit in the bank if you don't settle up with them.

                  As someone pointed it out is both a receipt for the money advanced and a payment instrument to return the money. The casinos have occasionally used the Las Vegas DA's office as a collection agency for markers because of some elements of Nevada law about writing bad checks to small business. Because of this there is some fear that not paying markers is a criminal rather than civil issue. There is language on the marker which says stuff like "by signing I represent that the money is really in my account blah blah blah"...which technically is almost never true, and cannot be because the casino literally does not put the banking information on the check until the last moment before they deposit it. I can scan one in and post it if there is any serious interest. (blacking out my personal info).

                  Part of the cat and mouse game that gamblers play with casinos is hiding their bank accounts where the money really is. Because the casinos are known to "remember" which bank accounts you've paid them from and try to guess which account has money in it when they deposit markers. So if you're behind, it is wise to pay with money orders if you're mailing it in.
                  filed chapter 13..confirmed...converted to chapter 7...DISCHARGED!

                  Comment


                  • #10
                    That sound bogus... I am a fraud investigator in CO, (Criminal Courts) and it ain't criminal here. Post dated checks are not criminal at all. I'd do some digging w/ the DA's policy if they would file criminal charges and/or extraditions if anyone is afraid of Criminal ramifications. But, again, I guess the Casinos have pull in NV based on its funding.

                    Are the BK 7 Judges actually ruling in favor of this apparent legalized racketeering by the creditors? Sorry for the humor.
                    Chapter 13 filed 08/07 60 month plan... $250.00 per month. 2 years to go!

                    Comment


                    • #11
                      The problem is that Nevada has certain laws criminalizing post-dated checks, even if it's payment for a "credit line". I feel that the Nevada issue is garbage, as giving a bad check to a creditor, is not a criminal offense!!!

                      However, the Casinos in Nevada, basically have a very strong lobby.
                      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                      Status: (Auto) Discharged and Closed! 5/10
                      Visit My BKForum Blog: justbroke's Blog


                      I am not an attorney. Any advice provided is not legal advice.

                      Comment


                      • #12
                        What's interesting, and I'm not sure I made this clear, is that the marker is like a postdated check, but only the amount, drawer's name and address, and signature are completed at issuance. The casino subsequently adds both a date and all the banking info (bank name and address, MICR-encoded routing and account numbers) when they deposit.
                        filed chapter 13..confirmed...converted to chapter 7...DISCHARGED!

                        Comment


                        • #13
                          I asked one of our partners about this a few weeks ago, and he said quite confidently that gambling debts can be treated as unsecureds
                          I do not provide legal advice. All I do here is give my two cents as an opinion and at least share some of the facts that I know. Attorneys can provide legal advice, so go ask them or hire one.

                          Comment


                          • #14
                            Originally posted by CH33 Paralegal View Post
                            I asked one of our partners about this a few weeks ago, and he said quite confidently that gambling debts can be treated as unsecureds
                            This is true, but beware, in the last 10 years Nevada has gotten much more aggressive about prosecuting criminally. Which is insane, but that's NV.
                            filed chapter 13..confirmed...converted to chapter 7...DISCHARGED!

                            Comment


                            • #15
                              well i have a marker in NJ and tried to do a repayment program with them however was told one month one payment then the next month went up triple the amount. besides that debt I hope of 18K I have credit card debt over 100K and going to file bk. would I be able to file the 18K as well ?

                              Comment

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