Japanese tycoon Terrance Watanabe gambled away nearly $127 million at the Caesar’s Palace and Rio casinos in 2007, and now is suing the casinos even as he faces criminal charges for refusing to pay them over $15 million in additional debts. He claims that the gambling establishments allowed him to gamble while intoxicated in violation of state casino regulations, and otherwise share blame for his outlandish losses, believed to be the most any gambler has amassed in a single year.
In a comment on the Ethics Alarms thread about card counting, casino ethics are compared to Bizarro World, the richly metaphorically planet in Superman Comics populated by flawed clones of Superman and his friends whose logic and customs are the opposite of what we would call sensible. On Bizarro World, logic is illogical, just as in the world of large scale legalized gambling (itself unethical, in my view) unethical conduct may seem ethical. Watanabe was what casinos call a “whale”— a fanatic gambler with a lot of money to lose. The practice with “whales’ is to make them happy and treat them well, so they will lose as much money as possible. How can it be unethical to trust someone well? Well, this is Bizarro World.
As whales go, Watanabe was Moby Dick. He would stay at the tables for up to 24 hours, sometimes losing as much as $5 million in a single binge. He was allowed to play three blackjack hands simultaneously with a $50,000 limit for each hand. At one point, the casino raised his credit to $17 million, according to court documents. Watanabe was also an incredibly dumb gambler. His favorite games were slots and roulette, two games where the odds against a player are prohibitive, and in which skill is irrelevant. He also liked blackjack, a skill game at which he had no skill.
Caesar’s gave him every incentive imaginable to make sure he kept playing and losing. Mr. Watanabe lived in a complimentary three-bedroom hotel suite, surrounded by attendants who served his every need, like delivering a seven-course meal from the casino’s restaurant to him while he was gambling. The casino gave him tickets to the Rolling Stones, $12,500 a month for air transportation, and a half-million dollar credit line at its gift stores. Watanabe was even offered 15% cash back on table losses greater than $500,000. It makes sense: he would lose up to $5 million dollars a day. These are sound investments in human folly.
The casino also kept him drinking, and, Watanabe says in his lawsuit, drugged. Sources have told reporters that they literally never saw the gambler sober. Caesar’s supplied him with a personal bartender and his own special brand of vodka.
Unless he can show that the casino drugged him, most observers seem to believe that Watanabe’s chances of winning his lawsuit are slim. Though Nevada law prohibits casinos from letting patrons gamble when they are intoxicated, it seems that the enforcement of the law is lax or non-existent. In practice, the casinos ask drunk gamblers to stop, but so not force them to stop, as the law requires. The gambling industry’s approach to gambling addicts is to prohibit them from playing if the addicts request them to do so in advance. The casinos are not required to diagnose gambling addicts, a reasonable policy except in cases like Terry Watanabe, who might as well have been walking around with a neon sign reading, “I am a out-of-control gambling addict!” on his head.
Legal matters aside, the ethical issues come down to these questions:
- Does the casino have an ethical obligation to stop a very rich man, who enjoys gambling even when he loses, from playing as much as he chooses?
- Is it wrong for the casino to do everything in its power to make him want to continue gambling and losing there?
- If a gambler is foolish enough to gamble while impaired by alcohol or drugs, does a casino have an ethical duty to protect him from himself?
- Is there any ethical difference between allowing a billionaire to lose millions, and allowing a man who makes $40,000 a year to lose $20,000?
In a normally ethical culture, I would give the answers as “yes,” “yes,” “Hell, yes!” and “Sure…letting the man lose $20,000 is worse.” In the Bizarro World of legal casino gambling, however, the answers are four times “no.”
This is a business that preys on people’s weakness and irresponsibility. It is, by its very nature, an unethical business, one that a state government sullies itself by permitting and profiting from. To argue that a business has an ethical obligation to stop its best customers from using its product makes no sense, even when the business itself is unethical. Watanabe was a victim of a state sanctioned activity that thrives on victims. He is its biggest loser, but far, far from its greatest victim. He still has assets. He still has a job. He is sick and he is a fool, but the people of Nevada (and, tragically, many other states now) have decided that they want to profit from illness and folly.
In the classic film “Chinatown,” the shady section of Los Angeles that gives the movie its title is described as a place where normal expectations and values don’t apply, and chaos and tragedy reign. “Forget it, Jake,” Jack Nicholson’s soul-weary detective is told as he ponders the story’s horrible climax, “It’s Chinatown.” An adaptation of this is the best I can muster after trying to unravel the ethical issues in Terry Watanabe’s saga.
“Forget it, everybody. It’s Bizarro World.”