Whale’s defense vs. Harrah’s gains traction

08.08.2009, Charges that company plied gambler with drugs will be investigated

Terrance K. Watanabe, claims to have lost $112 million at Harrah’s casinos in 2007. He alleges the company encouraged him to gamble while intoxicated. By Jeff German LasVegsSun.com

Gaming regulators are finally starting to acknowledge the seriousness of a Nebraska high roller’s allegations against Harrah’s Entertainment.

Philanthropist Terrance K. Watanabe gambled away tens of millions of dollars at Harrah’s casinos in 2007. This year Harrah’s asked the Clark County district attorney’s office to file criminal charges against the 52-year-old for allegedly failing to repay $14.7 million in markers at two of the corporation’s casinos, Caesars Palace and the Rio.

In his defense, the 52-year-old Watanabe accused Harrah’s of supplying him with alcohol and prescription painkillers to keep him intoxicated at the tables as his losses mounted.

If this is true, not only is it contrary to the responsible gambling standards Harrah’s has set for itself, but it’s also against the law. Gaming regulations prohibit casinos from allowing “visibly intoxicated” players to continue to gamble. And illegal trafficking of prescription narcotics is drug dealing no matter where it happens.

Watanabe’s potentially explosive allegations got the attention of Harrah’s because, as the Sun reported July 25, the casino giant has brought in a national law firm to help it conduct an internal investigation.

And, after regulators downplayed the case for three months, Dennis Neilander, chairman of the Nevada Gaming Control Board, last week said the board’s Corporate Securities Division is “monitoring” the budding scandal and is “making inquiries.”

But beyond the prospect of regulatory sanctions, Harrah’s has something else to worry about — its credibility as an opponent of irresponsible gambling.

The company devotes an entire section on its Web site to its accomplishments in advocating responsible gambling. In a public service video linked to the Web site, Harrah’s CEO Gary Loveman reminds casino patrons that “there are a lot of times when you shouldn’t gamble — like if you’re under 21 or you’ve had too much to drink.”

That certainly is the kind of advice Watanabe could have used. Did anyone from Harrah’s give him that advice while he was, as he says, losing a total of $112 million at Harrah’s casinos in 2007? That would have made him one of the most prolific gamblers of all time in Las Vegas and a cash cow for the world’s largest casino company.

Did Harrah’s set aside its role as a leader of responsible gambling, failing to apply a standard to a man who claims to have been its biggest gambler?

It’s a question that puts Harrah’s “in a horrible position,” says Robert Langford, a criminal defense lawyer who has fought the casinos and the district attorney’s office in other gambling marker cases. With the allegation hanging out there for all this time, Harrah’s “definitely has an image problem,” Langford says.

The company’s credibility has suffered in the eyes of the district attorney’s office. Chances are the office would not have filed criminal charges against Watanabe had Harrah’s informed prosecutors beforehand that these allegations might come back to bite them.

Watanabe’s lawyers are poised to unload on the casino giant in court in their bid to get the criminal charges dismissed, and word within the district attorney’s office is that it doesn’t plan to take the fall for Harrah’s. Prosecutors plan to look into the allegations themselves.

If that isn’t enough, Watanabe has hired one of the country’s most well-known crisis management firms, Sitrick and Company, to turn up the heat on Harrah’s. The Los Angeles- based firm, which has a long list of high-profile clients, including the estate of Michael Jackson, has extensive national media contacts.

With further embarrassment on the horizon, Harrah’s may have to start acting more responsibly in this case.

-------- Discussion: Allegations like this have always been the purview of the Gaming Control Board and Commission. If any of this is true, this will be a huge criticism for all of Las Vegas and Nevada! We do not need this kind of reputation. The persons responsible at Harrah's must be terminated and not be allowed to work in Gaming in Nevada again. Perhaps prison time too...why should they be allowed to put this industry and all of its jobs in jeapordy. Appropriate terminations and suspensions of the work privilege should not stop at mid level executives in Harrah's...it must go all the way to the executive offices of Caesar's and the Rio. Shame on the Gaming Control Board for downplaying this for three months or more; and how silly for Harrah's to go after a player for $14 Milion when he had just lost over $112 Million in one year. Very shortsighted as all of this could have been prevented. Another example of high paid, inexperienced management. All of our competitors throughout the world will play this one up to their own advantage. Wow!

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Let's see now; a working stiff is fed alcohol until his paycheck is gone, then he is tossed out into the street. A rich guy gets free booze (pills and broads too?) but he just signs a marker and keeps playing.

But if the rich guy doesn't pay up he goes to debtor's prison. But he can get out of it by paying a 10% bribe (Oh sorry, I should say "fee") to the District Attorney.

Oh Joy! At last, some social justice for the common man in Nevada. Just never mind the corrosive effect that criminalization of private debt has on democracy.

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This guy is pathetic. He redefines the meaning of the word loser and takes it to a new level.

I suppose when you inherit a bunch of money from Daddy then its OK to blow over one hundred million dollars on gambling and then blame someone else for your actions.

What is this world coming to? Step up to the plate, be a man, and take responsibility for your actions. The money is already gone, you're not getting it back dum-dum.

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Where did you read about Terrance Watanabe getting his gambling money from his rich parents? From what I have read, his wealth is derived from "the sale of the Omaha-based Oriental Trading Co., a wholesale novelty importer he ran from 1977 until 2000". Plus with his big bankroll, he gambled and won big at Harrah's the year before his gambling luck ran out.

Anyway, the guy for sure has a gambling problem. But Harrah's shows what an amateur it is in gaming by allowing its single largest gambler to lose that much money and take out so many markers/loans without someone higher in the corporate food chain to look in on it and make sure everything is kosher. Sure the whales may not care about losing a few millions, but after $10 million should be more than enough to get the attention of a team from corporate. To have one individual lose $112 million in 2007 just at Harrah's alone, and the alleged induced intoxication and failing to stop their gambling while intoxicated or under the influence is just idiotic.

Plus if Watanabe was intoxicated and not in his right mind (aka legally incompetent to enter into any contract) when he signed for those markers, I wonder if the markers he signed for can even stand up in court.

Whatever happens, I hope better procedures will be established (i.e., verifying someone is competent and mentally sound enough to enter into a contract when requesting a marker or to continue gambling) and additional trainings for all staff in gaming. And maybe even institute a mutually agreed upon "maximum loss threshold" for each whale per visit.

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Another thing, Harrah's and CEO Loveman better reimburse Nevada for all of its court expenses related to this case, since the taxpayers should not be stuck with the bill for the downright stupidity of Harrah's and some of its staff.

The DA should also exercise more prudence in the future when deciding which potentially high profile case to take on. I am sure the original vision of prosecuting a big case and gaining favorable political street creds has turned out thus far to be anything but what was expected.

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I'm interested in the credit aspect of this. An earlier article brought to light some really intersting things.

In a previous article, it was said that a handbook put out by the district attorney's own bad-check unit even states that the unit can't prosecute cases where checks are predated or postdated or "where an agreement was made to hold the check for later payment." That changes the case from a "bad check" case to a "loan" which can't be prosecuted by the DA.

I'm very surprised more emphasis is not placed on that fact because if that's true, casino credit as we've known it for many years will be turned in it's ear!

That is how it's being done. You verify account balances, run credit checks, and when you decide to extend a line of credit, you obtain a check for the amount the client wants to borrow. The check is not usually post dated, but it is held with the understanding that it will be deposited in 30 days if the marker has not been repaid.

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