Casino Control Act Does Not Preempt Consumer Fraud Claims for Alleged False Advertising of Poker Tournament

Bandler v. Landry’s, Inc., ___ N.J. Super. ___ (App. Div. 2020). Plaintiff, a competitive poker player, saw an advertisement for a “Grand Poker Series” tournament to be held at the Golden Nugget casino in Atlantic City. Plaintiff alleged that the ad promised $150,000 in prize money. from twelve “one day tournaments” to be held over the course of ten days. The ad did not state whether that prize money was guaranteed, but it did say, in small print at the bottom, that “Management reserves all rights to change or cancel at any time.”

Plaintiff traveled from Vermont, paid the required admission fee, and played successfully in one event. But the Golden Nugget then cancelled the rest of the tournament due to the small number of players and paid plaintiff a portion of the prize money generated by the admission fees. received. Plaintiff sued on Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. (“CFA”), and other theories, asserting misrepresentation as to the $150,000 in prize money and claiming expenses for his travel, lodging, and meals in attending the tournament.

The Law Division granted summary judgment to defendants, finding that it lacked jurisdiction. The judge held that the Casino Control Act, N.J.S.A. 5:12-1 et seq. (“CCA”), gave the New Jersey Division of Gaming Enforcement (“the Division”) exclusive jurisdiction over all gaming-related advertising, as opposed to advertising to induce people to visit casinos themselves.

Plaintiff appealed, and the Appellate Division invited the Attorney General’s office to participate as an amicus curiae. The Attorney General joined plaintiff in arguing for reversal. The Appellate Division reversed, applying de novo review, and giving “great weight to [the] agency’s interpretation of a statute it is implementing,” including where, as here, the agency’s interpretation is presented in an amicus brief.

Relying on Lemelledo v. Beneficial Mgmt. Corp., 150 N.J. 255 (1997), Judge Ostrer noted that regulation of an area by administrative agencies is “frequently complementary, overlapping, and comprehensive,” and that there is a “high bar” for preemption. “Absent a nearly irreconcilable conflict,” applying preemption would defeat the purposes of regulation.

There was no such conflict between the CCA and CFA, both of which “bar false, misleading, and deceptive advertising, including advertising that is misleading by omission.” Since the CCA does not contain “an explicit grant of exclusive jurisdiction to the Division over plaintiff’s claims,” Judge Ostrer looked to “the general statutory scheme to determine whether the Legislature intended to grant exclusive jurisdiction.”

Relying on Smerling v. Harrah’s Entertainment, Inc., 389 N.J. Super. 181 (App. Div. 2006), another deceptive advertising case that had rejected a similar argument of conflict between the CCA and the CFA, and Lemelledo, which required “a direct and unavoidable conflict … patent and sharp,” before another statute will be held to preempt the CFA, Judge Ostrer rebuffed the conflict argument here. Doug Grant, Inc. v. Greate Bay Casino Corp., 3 F. Supp. 2d 518 (D.N.J. 1998), which held that the CCA preempted the CFA, was distinguishable because that case involved the rules for blackjack, a “highly technical” area “within the special expertise” of the Division.

In contrast, the advertisement here did not involve “arcane or technical rules of the game” or the Division’s “special expertise.” There was no “direct and unavoidable [or] patent and sharp” conflict between the CCA and the CFA in this circumstance., and no significant risk that the two statutes would “work at cross-purposes.” Accordingly, the summary judgment for defendants was reversed and the case was remanded for further proceedings..