Scientific Games claims the lawsuit brought against the gaming company over the recent “quick-picks” wagering situation cannot be judged in the California federal court system, and its settlement with the California Horse Racing Board was an appropriate measure to satisfy damages caused by any “alleged” defect in its betting systems.
In a dismissal motion filed Sept. 15, Scientific Games discounts the allegations raised in a styled class-action suit filed by horse owner Jerry Jamgotchian, including his charges of breach of contract, fraud, negligence, and unjust enrichment.
Jamgotchian in August filed the lawsuit, claiming Scientific Games purposely or otherwise mishandled several aspects of an alleged programming glitch in its BetJets self-wagering terminals. The snafu, which was acknowledged in the July settlement with the CHRB, apparently eliminated the highest-numbered post position from any quick-picks wagers made through BetJets terminals in California and other states.
In asking to have the Jamgotchian lawsuit thrown out, Scientific Games in its dismissal motion in part claims California law doesn’t allow for legal disputes over gambling to be heard in the court system.
“For more than a century, plaintiffs have been barred from bringing claims under California law arising out of a gambling contract or transaction, regardless of the theory under which the claims are brought, and regardless of whether the gambling activity at issue is legal or illegal,” the motion said, citing what it claims is extensive applicable case law.
Instead, Scientific Games calls the lawsuit of Jamgotchian “an ill-fated attempt to recover losing bets he (and a putative nationwide class of bettors) allegedly placed on horse races from the vendor who supplied equipment to the state-regulated racetracks where the bets were placed.”
“These hopelessly speculative claims are nothing more than an attempt to use the legal system as insurance for losing wagers,” the motion said.
A California-based attorney representing Scientific Games called Jamgothian’s complaint a “baffling, misguided lawsuit.”
“It’s hard to understand what is going on with this lawsuit, as we laid out in our motion to dismiss,” said Theodore J. Boutrous Jr. of the Gibson, Dunn & Crutcher law firm in Los Angeles. “California law is absolutely clear that this sort of lawsuit is absolutely prohibited. And when you look at the fact that the CHRB thoroughly investigated this issue, and that the company cooperated fully, there is no reason for this to go forward.”
Jamgotchian, who in interviews has alleged various levels of collusion between Scientific Games and one of his frequent targets, the CHRB, bristled at the premise the courts would throw out his lawsuit.
“According to the … motion, a California bettor does not have any contractual relationship with the racetrack where the bet is made,” he wrote in an e-mail to The Blood-Horse. “Therefore, if the bettor happens to win, (Scientific Games’) position is that the racetrack is not legally obligated to pay the bettor and the bettor has no judicial recourse.
“(Scientific Games) further states that they can't be liable for any quick-pick damages because (the company) merely ‘supplies equipment to a vendor,’ and since the vendor isn't liable to the bettor based upon state law, neither are they.
“If that really is the law, why would anyone make a horse racing bet in California?” he concluded.
Jamgotchian estimates damages to the class group are in excess of $5 million. Scientific Games and the CHRB counter that the pool is much smaller, and throwing out the highest-posted horse likewise often increased a bettor’s chance of winning a wager.
Scientific Games has said it will consider reimbursing bettors who made quick-pick wagers through its BetJets terminals while the glitch was present. Details of the refund policy have not been made public. It is believed that just a handful of inquiries on possible refunds have been made to Scientific Games.
(For additional background on this story, see this article).