A federal judge has dismissed a proposed class action lawsuit against MGM Resorts on behalf of players the lead plaintiff claims were short-changed. The suit alleged MGM’s “no-change policy” effectively taxed casino slots players who failed to cash out coin vouchers.
However, Judge Halil Suleyman Ozerden of Mississippi dismissed the case, ruling the court has no jurisdiction.
Suit Claimed ‘No-Change’ Policy Nickeled and Dimed Gamblers
According to the original September 2022 filing, plaintiff Leane Scherer argued MGM’s no-change policy deprived casino patrons by making gamblers visit the casino cage to cash in coin vouchers. Kiosks, which provide a quicker option for cash-outs, dispense only dollar amounts and return a receipt called a Tru Ticket for the remaining change.
That, Scherer’s suit alleged, amounts to “converting players’ funds into casino funds” and depriving customers of millions of dollars.
Scherer, of New Orleans, Louisiana, played at the MGM Resorts-owned Beau Rivage Resort and Casino in Biloxi in June 2022. During the visit, she cashed a voucher worth $18.19 at a redemption kiosk.
However, for that voucher, Scherer returned with $18 and a $0.19 Tru Ticket.
Scherer argued the hassle of lining up for the cashier to claim such small amounts encourages customers to abandon the change instead. Further, Scherer claimed MGM failed to provide instructions on how to claim their Tru Tickets, which expire after 30 days.
Specifically, Scherer said she was unaware of the redemption process when initially cashing out. As a result, she never retrieved her 19 cents.
According to the class action:
The Casinos fail to put an average player on reasonable notice that the TRU Ticket can only be converted into cash at the cage.
Judge Dismisses Case Without Prejudice Over Jurisdiction
Despite Scherer’s arguments, on April 4, Judge Ozerden ruled his court lacked “subject matter jurisdiction” over the suit. Notably, he agreed with MGM that the state Gaming Commission should hear the dispute, not Federal courts.
Ozerden also found Scherer failed to prove at least $5 million in controversy. Unfortunately for the suit, such damage is a requirement for federal jurisdiction under the Class Action Fairness Act.
Scherer’s original suit positioned the Gaming Commission’s remedies as inadequate, offering no chance for consumer protection.
However, Judge Ozerden disagreed, saying, in part, that Scherer failed to exhaust the gaming authority’s administrative process:
(B)ut it is unclear what remedies besides her change she would be entitled to before this court.
Based on the Court’s reading of the amended complaint, she is not seeking an injunction or other remedy besides monetary compensation… nor has she explained how this Court would have the authority to order Defendant to start dispensing coins at its kiosks or posting whatever notice she believes is necessary according to an implied contract of gambling.
Plaintiff has not shown how the Gaming Commission would be unable to provide her with the remedy she seeks here…
Mississippi Gaming Commission Holds Exclusive Jurisdiction
Scherer sought to represent a nationwide class of players deprived of change at any MGM property between September 2012 and the present.
The suit, now dismissed without prejudice, claimed MGM was guilty of unjust enrichment, breach of contract, and more.
Without prejudice, Scherer has the option to tweak the complaint and refile it at a later date. However, whether she’ll do so or not remains undecided.
According to Suzanne Montero, Scherer’s lawyer, they are still considering future options.
Also in question are similar lawsuits filed last year in New York and Louisiana.
In those cases, Vincent DiBenedetto of New York and Mike Young of Louisiana are suing Hard Rock Atlantic City and Caesars Entertainment over similar complaints.
How the MGM precedent could affect those actions remains unclear.
As yet, MGM has not commented on the Mississippi ruling.
Update (05/09/23): Caesars Case Dismissed
On May 8, the Louisiana federal judge in the Caesars case dismissed Young’s complaint. Here, too, the rationale was lack of jurisdiction.
Based on this precedent, it seems likely that the New York case will end the same way, though for now it remains open.