Ontario casinos could be liable after problem gambler loses millions

Ontario’s gaming authority could yet be on the hook for a claim by victims of a gambling addict who ripped off more than $4 million to feed her casino habit, Ontario’s top court ruled Friday.

In a split decision, the Court of Appeal said the claim against the Ontario Lottery and Gaming Corporation was not doomed to fail as a lower court had decided, and should proceed to trial.

“This case illustrates, once again, the catastrophic social consequences caused by problem gamblers, those unable to resist the allure of a casino,” the Appeal Court said in its ruling.

“While the action is by no means certain to succeed, nor is it necessarily certain to fail.”

Documents show Shellee Spinks, a law clerk in Hamilton, stole the millions from two estates and others by forging documents and selling estate assets. Spinks lost about $3 million of the money gambling at two Ontario casinos over a 14-month period between 2006 and 2008.

The two estates in question allege Spinks, who pretended to the casinos she was a lawyer, defrauded them of about $1.5 million. They sued the gaming corporation to recover some of their losses, arguing the casinos knew Spinks was a problem gambler, and should be held liable for knowingly receiving trust funds, unjust enrichment and negligence.

However, Superior Court Justice Peter Hambly in March last year struck down the claim without a hearing on its merits on the basis that it was “plain and obvious” the lawsuit had no chance of success.

Among other things, Hambly concluded the casinos didn’t know Spinks was gambling with trust funds or should have investigated. He noted many people lose money gambling, the casinos had legitimate reasons to keep the cash, and the gaming corporation had no “duty of care” to problem gamblers.

The Appeal Court, citing complicated legal principles, rejected the conclusions.

“Casinos cannot be expected to conduct an individualized assessment of each of their customers to determine the wisdom of the decision to gamble,” Justice Gladys Pardu wrote on behalf of the majority. “However, more may be expected when an individual is obviously addicted to gambling and out of control.”

The court went on to say the “novel claims” at play deserve to be aired at trial so a court can properly decide whether it is fair to expect casinos to pay compensation for the steep social costs of gambling, and make judgments about the legal and policy issued raised.

In a dissenting opinion that ran longer than the majority decision, Associate Chief Justice Alexandra Hoy said she would dismiss the appeal. Hoy said the estates had never alleged the casinos actually knew Spinks was a problem gambler or was wilfully blind to that fact.

Hoy also said, among other things, that it would be unfair for the gaming corporation to have investigated the source of the money simply because Spinks held herself out to be a lawyer.

She said the claim had no prospect of success and agreed with Hambly it should be struck.

Spinks, then 47, was given a four-year sentence in August 2010 after pleading guilty to 16 criminal charges.