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McKee v. Isle of Capri Casinos, Inc.

Supreme Court of Iowa

April 24, 2015

PAULINE McKEE, Appellant,
v.
ISLE OF CAPRI CASINOS, INC. and IOC BLACK HAWK COUNTY, INC., Appellees

Page 519

Appeal from the Iowa District Court for Black Hawk County, Todd A. Geer, Judge. A casino patron who sued to recover a bonus allegedly won on a slot machine appeals the district court's grant of summary judgment to the casino.

Stephen J. Powell of Swisher & Cohrt, P.L.C., Waterloo, and Steven R. Enochian of Low McKinley Baleria & Salenko, Walnut Creek, California, for appellant.

Stacey L. Cormican of Nyemaster Goode, Cedar Rapids, and Mark A. Schultheis of Nyemaster Goode, P.C., Des Moines, for appellees.

OPINION

Page 520

MANSFIELD, Justice.

This case requires us to apply ordinary contract principles to an extraordinary event. While playing a penny slot machine, a casino patron obtained a win of 185 credits, or $1.85, based on how the symbols had lined up. However, at the same time a message appeared on the screen stating, " Bonus Award - $41797550.16." The casino refused to pay the alleged bonus, claiming it was an error and not part of the game. The patron brought suit against the casino, asserting breach of contract, estoppel, and consumer fraud. The district court granted summary judgment to the casino. The patron appealed.

On appeal, we conclude the district court's grant of summary judgment was proper. The rules of the game formed a contract between the patron and the casino, and the patron was not entitled to the bonus under those rules. Further, the patron failed to prove the necessary elements of either promissory or equitable estoppel. At no time did the casino represent to her that a bonus would be available if she played the game, nor did the casino promise to pay the $41 million after the notice was displayed. In any event, the patron did not detrimentally rely on any representation by the casino. Finally, the patron failed to present proof of an ascertainable loss sufficient to warrant recovery on her consumer fraud claim. We therefore affirm the district court's ruling granting summary judgment to the casino on all three counts.

I. Background Facts and Proceedings.

On July 2, 2011, Pauline McKee, an eighty-seven-year-old grandmother of thirteen living in Antioch, Illinois, was attending a family reunion in Waterloo. That evening, she and several members of her family gambled at the Isle Casino Hotel Waterloo operated by IOC Black Hawk County, Inc. (hereinafter jointly referred to as " the casino" ), a combination hotel and casino where some members of the reunion party were staying. Around nine o'clock, one of McKee's daughters invited McKee to sit down next to her and play a slot machine called " Miss Kitty." McKee had played slot machines two to three times per year since she was approximately twenty-one years old, but had never played this particular game before.

The Miss Kitty game is a penny slot machine manufactured by Aristocrat Technologies, Inc. (Aristocrat). It displays five reels and fifty paylines on a video screen. To play the game, a patron selects the number of paylines and the amount bet

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per line. One cent buys one credit, and one half credit buys one line. A player's total bet is calculated by multiplying the number of credits by the number of lines bet. Therefore, although it is called a penny machine, it is possible to bet more than just one cent per spin. As with other slot machines, a person wins at the Miss Kitty game by lining up different combinations of symbols from left to right on the paylines.

The game includes a button entitled " Touch Game Rules" in the lower left-hand corner of the screen. Tapping this button displays the rules that govern the game and a chart describing potential winning combinations of symbols, known as a paytable. The first page of the rules reads as follows:

TOTAL BET is the number of credits on the LINES button multiplied by the number on the BET button. TOTAL BET and lines played during the free games are the same as for the game that started the feature. Choose your number of paylines, then choose your bet per line to begin game. Highest win paid on any lit payline except for scatters which are added to payline wins. Scattered [moon emblem] wins added to payline wins. All wins shown in credits. All wins multiplied by credits bet per line except scatters. Wins on different lit paylines added. All wins on lines played except scatters which are added to payline wins.
MALFUNCTION VOIDS ALL PAYS AND PLAYS. . . .

The next rules screen states, " All wins begin with leftmost reel, and pay left to right only on adjacent reels." Additionally, the rules provide that when three " scattered moon" symbols appear left to right on adjacent wheels, the player wins double the total amount displayed. Furthermore, when three " scattered moon" symbols appear on the screen, the game enters a special mode called " Sticky Wild[TM] Free Games Feature" that lasts for ten games. During these ten games, any wild symbol (represented by a Miss Kitty emblem) that appears on the screen " sticks" and stays in place for the rest of the ten games, thereby making it easier for the patron to complete winning patterns.

The third rules screen explains there are eleven symbols other than the moon and Miss Kitty wild images, each with varying credit values. The fourth screen displays the paytable entitled " Paylines." Finally, a sign posted on the front of the machine reiterates, " MALFUNCTION VOIDS ALL PAYS AND PLAYS."

The parties agree that all the potential ways of winning from lining up various combinations of symbols are accurately listed in the rules and paytable. The rules and paytable do not mention any additional bonuses, jackpots, or prizes available to a patron playing the Miss Kitty game.

McKee did not read the rules of the game or look at the paytable before playing the Miss Kitty game. Around 10:00 p.m., after McKee had been using the machine for a while, she wagered $0.25 on a particular spin. The following message appeared:

Credit Bet Win
1810 25 185
The reels have rolled your way!
Bonus Award - $41797550.16

Beneath this message was a five-by-four configuration of symbols. It is undisputed that under the rules of the game, McKee was entitled to a win of 185 credits, or $1.85, based on that alignment of symbols. The dispute, of course, concerns the " Bonus Award" of $41,797,550.16.

Believing she had won a large bonus, McKee and her daughter summoned a casino

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attendant to the machine. An employee responded and accessed the main door of the game to clean the central processing unit. The senior supervisor/shift manager on duty that night was also called to the machine to investigate. The supervisor photographed the display on the Miss Kitty machine. A slot technician restarted the game. The supervisor informed McKee and her daughter that she needed to make a few phone calls and gave McKee a $10 card to play other games while she waited. Eventually, a casino manager instructed the supervisor to block off the machine pending further investigation. The supervisor paid McKee the $18.10 she had won on the Miss Kitty machine up to that point. The supervisor explained the casino was looking into the machine and informed McKee her room would be paid for by the casino. No employee of the casino ever informed McKee that she would actually receive the $41,797,550.16 bonus.

The next day, the vice president/general manager of the casino also investigated the incident and left a note and her business card for McKee. She concluded it was an " unusual situation" and comped the additional rooms that McKee's family members were staying in. She explained the casino had informed the Iowa Racing and Gaming Commission (IRGC) of the situation and that the machine would be secured and studied.

The IRGC conducted an independent investigation. As part of this investigation, it sent the hardware and software from the Miss Kitty machine to a testing laboratory, Gaming Laboratories Inc. (GLI), along with related documentation and other materials. GLI's analysis concluded as follows:

The logs on the machine do indicate that it thought it received a legacy bonus.[1] However, in reviewing the legacy bonusing aspect of SAS [the casino's " slot accounting system" ] it was noticed that the SAS legacy bonus command can send a bonus up to $99999.99, which is far less than was awarded by the game. Furthermore, the system does not support legacy bonusing. As a result, it appears the SPC board [hardware inside the Miss Kitty machine] erroneously determined that it received a legacy bonus award from the system and sent it to the game.
. . . .
In conclusion, GLI was unable to definitively determine the exact cause of the erroneous bonus award. However, it is apparent, based on the reviewed information that the bonus award was not valid. Unfortunately, given the lack of conclusive evidence, GLI cannot confidently speculate as to how the bonus amount was received and displayed at the gaming machine in question. However, it is highly likely that the erroneous message originated from the SPC 2.0 communication board and was then relayed to the game.

The IRGC also requested information from the manufacturer of the machine, Aristocrat. Aristocrat responded to the IRGC with a letter concluding that the bonus displayed on the screen was an error. It noted it had previously issued a bulletin regarding the issue:

ATI [Aristocrat Technologies, Inc.] has been aware of the possibility of an erroneous value being displayed under this type of situation, i.e., where " Legacy

Page 523

Bonusing" is enabled on the gaming machine without the required poll. In response to the possibility of this type of erroneous display, ATI previously provided a Technical Information Bulletin to the Industry in November, 2010. The Technical Bulletin outlined the issue and the course of action Aristocrat was taking in developing a new System Base and SPC2, as well as ATI's recommendation to casinos for disabling of the bonus option as a preventative action.

The technical bulletin the casino had received from Aristocrat described the problem as follows:

A rare and unlikely circumstance has been discovered when legacy bonusing is enabled on the MKVI[TM] platform when used with the SPC2.0 -- an erroneous bonus amount can be awarded to the machine, which may cause the machine to go into an attendant hand pay condition with the erroneous bonus amount displayed on the screen. Aristocrat believes that SPC2.0 component degradation over time may increase the susceptibility to this rare occurrence.

An accompanying product notification described the solution to the problem as a " Non-Mandatory upgrade" and stated " [t]he conditionally revoked version must be replaced in the field by August 31, 2011."

The record also indicates that this machine had been serviced earlier in the evening of July 2 and that the CPU had been cleaned and reinstalled around 7:30 p.m.

As a result of the IRGC's investigation, administrator Brian Ohorilko wrote a letter to the casino manager concluding the bonus was an invalid ...


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