A California judge has dismissed the lawsuit against Scientific Games over the “quick-picks” wagering situation, agreeing with the company that state public policy prohibits such a complaint as it was presented.
U.S. District Judge George H. King entered the judgment Oct. 23 in the Central District Court of California after considering Scientific Game’s motion to dismiss the case. The lawsuit, which was filed in August by California horse owner Jerry Jamgotchian, sought at least $5 million in damages over an admitted glitch in the Scientific Games BetJets self-service terminals.
The BetJets terminals for a period of months produced quick-picks tickets that omitted the highest-numbered horse in the field. The situation came to light in May after an unidentified Bay Meadows bettor purchased $1,300 superfecta tickets on the Kentucky Derby Presented by Yum! Brands (gr. I), wagers that didn’t include in any leg eventual winner Big Brown, who broke from the outside No. 20 post.
Without specifically commenting on the merits of Jamgotchian’s complaint – which included charges of breach of contract, unjust enrichment, negligent misrepresentation, fraud, and negligence – King in published civil minutes of his decision instead focused on Scientific Game’s primary dismissal argument: That California case law prevents lawsuits by bettors attempting to collect lost wagers.
King wrote that the court didn’t agree with Jamgotchian’s assertion that the complaint, which was filed as a class-action lawsuit, was not about trying to recover lost bets.
“Moreover, though plaintiff claims that the identity of the winning horse is irrelevant under this theory, we doubt that he will seek to undo any transactions where he held a winning ticket,” he wrote.
In an accompanying order, King ruled that the lawsuit is dismissed with prejudice, which generally means that the lawsuit can’t be filed again.
Jamgotchian, who in interviews with The Blood-Horse also criticized the California Horse Racing Board for its part in the subsequent investigation and an eventual $200,000 settlement with Scientific Games, was not happy with the court decision.
“Judge King failed to understand that our action was based on (Scientific Games’) outright fraud, breach of contract and other claims which did not relate to gambling, (and) to Scientific Games latest ‘scheme’ to defraud all (California) bettors,” he wrote in an e-mail statement. “What makes it even worse is that CHRB chairman Richard Shapiro and the CHRB condoned these illegal activities and ‘partnered up’ with Scientific Games to continue defrauding California bettors, and then even extended the Scientific Games contract (to provide wagering products to the state)!
“Based upon this illegal and despicable conduct by both Scientific Games and the CHRB, why should anyone have confidence that wagering in California has any integrity or safeguards?” he continued. “The simple answer is that it doesn't, and the CHRB won't require any such integrity or safeguards from their ‘partner,’ Scientific Games.”
An attorney representing Scientific Games said the company was pleased with King’s ruling.
“Scientific Games acted just the way the betting public should want companies to act,” said Theodore J. Boutrous Jr. of the Gibson, Dunn & Crutcher law firm in Los Angeles. “The company moved quickly to work with regulatory authorities to resolve the issues and to protect the betting public. California law is very clear that these types of lawsuits are barred and meritless. The district court got it exactly right.
"All of the claims in the complaint were utterly baseless on the merits, but the district court didn't even have to reach those issues because California law so obviously prohibited this lawsuit in its entirety," he added. "The false attacks on the CHRB, Scientific Games and Judge King can't change the facts or the law."
Scientific Games in its motion to dismiss claimed Jamgotchian's lawsuit was a "crapshoot in the courts," arguing it was "nothing more than an attempt to use the legal system as insurance for losing wagers." The company also argued that in theory, not having the highest-numbered horse in the field also "enhanced" the winning chances of bettors in certain races.
King’s decision marks the third dismissal in lawsuits filed against Scientific Games related to the quick-picks situation. A federal case filed in California in June was dismissed following the July announcement of the settlement with the CHRB, while a California state case was voluntarily dismissed by the plaintiff Oct. 23.
Jamgotchian said he and his legal counsel will consider appealing to the California Supreme Court what he called an “irresponsible ruling” by Judge King, and would also consider filing claims to see if the CHRB and Scientific Game will actually refund wagers based upon the settlement agreement. The settlement terms allows for holders of quick-picks tickets purchased during the glitch-period to request refunds from Scientific Games.