Can I Go to Jail for Unpaid Gambling Debts at a Casino?

The answer: it depends. In real estate, the mantra is “location, location, location.” In criminal law, it should be “intention, intention, intention.”

The question as to whether someone who cannot pay his or her gambling debts can be convicted of a crime depends on his or her state of mind or mens rea. It is the intention of the person doing the act which separates a crime from a civil (non-criminal) wrong, such as breach of contract or a tort–something you can be sued over, but for which you won’t go to jail. For example, say that as you are driving–your phone on the seat next to you– rings and you reflexively glance over it; in doing so, you fail to see a pedestrian–struck and kill him. This is a tragedy, but you won’t go to jail over it. You never had an intention to kill the pedestrian. On the other hand, if you see your ex and in a fit of bitter anger run him or her over, killing the individual, that is a crime, because it was your obvious intention to harm or kill them. The act of hitting and killing someone while driving is the same in both situations, but only one is a crime. The key takeaway was that it was the criminal intent to cause the death of another person which elevated one of the incidents to a criminal act.

The same is true regarding debts, including gambling debts. It is the debtor’s intention when they incurred the debt that determines whether or not a crime was committed. It is not a crime to lose a job and so be unable to repay a debt. It is not a crime to have some illness or injury or death occur in the family, or lose your car to an unexpected accident or house to a fire, and be unable to repay a debt because you are dealing with more urgent expenses. It is not a crime to misjudge your taxes and not get the refund you were counting on to dig you out of a financial hole; and so forth.

Therefore, the issue about whether a gambling debt could give rise to criminal liability depends on the circumstances of you borrowing or incurring it. If you were truthful when you asked or applied for the credit from the casino, you cannot go to jail if you later become unable to pay. Similarly, if you can’t pay your mortgage, you might lose your house but you won’t go to jail; if you fail to pay your credit card balance, you may receive a lawsuit from the credit card company or its collections agency, but the police will not show up at your door to arrest you.

But to borrow money–including money for gambling, whether in the form of cash, or chips or credit–when you know you could not repay it, that could be a crime. For example, to use New Jersey (home of the Atlantic City casinos) as an example, it is the crime of “theft by deception” to “purposely obtain property of another by deception. A person deceives if he purposely: a. Creates or reinforces a false impression, including false impressions as to law, value, intention or other state of mind. . . .” N.J.S.A. 2C:20-4.

Example: You received a line of credit at the casino by filling out an accurate credit application, honestly believing you could pay the debt back at that time. Then your car needed $1,500 of repairs, and/or your child was sick and needed medical care, and/or an elderly relative passed away insolvent and you paid for the funeral. In none of those cases did you commit a crime. In none of them, did you borrow money without a legitimate intention to repay. You can be sued, but you won’t go to prison for failing to pay the medical bill, funeral expenses or car repair.

On the other hand, say you took out credit clearly knowing that there would be no way you could pay it back unless you won the jackpot at the casino. Of course, you did not disclose such information to the casino. Rather you told them you absolutely could and would repay the money. In that case, you “obtain[ed] property”–money–of another by a “false impression as to . . . intention or other state of mind”–and you committed the crime of theft by deception. You would also have committed criminal fraud when you provided false or intentionally misleading information about your assets on the financial application —e.g., your “value”—which was why they extended credit to you in the first place.

Passing bad checks

The same principal applies when writing checks – which later bounce–to obtain chips.

If your check was dishonored because your spouse, with whom you share a checking account, wrote a check at more or less the same time but which was cashed first, so that your account was depleted even though it looked like you had the money to cover the check when you wrote it, you did not commit a crime. You can expect to be sued for the money if you don’t make good on the bounced check (plus the “NSF” or “not sufficient funds” fee), but you won’t go to jail. You wrote the check in good faith that it would be honored; there was no criminal intent on your part.

On the other hand, writing the check knowing you do not have the money (or knowing your account was closed), but hoping you win at the casino and be able to make good with your winnings, that is check fraud, a criminal offense.  You knew the check would bounce the moment you wrote it.

The same principle also applies to gambling at Indian or Tribal casinos. Your intention when you incurred the debt or wrote the check is what separates something you can be sued over from something you can be jailed for.

Steps to take if you are unable to pay a casino debt

Negotiate with the casino. Casinos do not make money by jailing people–they make money when gambling debts are paid. And casinos are in the business of making money. So don’t obfuscate; don’t bluster; don’t put your head down and hope the problem goes away. Speak to the casino, explain that you misjudged your finances but want to pay the debt, and ask for a payment plan. (Be sure to ask for one you can afford, and then stick to it–getting an unfeasible payment plan then defaulting on it will not help you.) Show them that you made a mistake and are owning up to it and want to fix it–and that they will receive their money by working with you. The police only know what is reported to them–if the casino never reports the debt as a crime, but treats it as simply a misunderstanding being corrected voluntarily, you won’t have to face criminal liability.

State criminal laws

Each state has its own laws and definitions of what is and is not criminal; criminal law, like gambling regulation, is primarily state-by-state. But all states will have laws making it illegal to lie about your income, assets, resources, or intentions in order to obtain a loan or credit. Therefore, while owing money is not itself a crime, if you obtained the money or credit or loan under false pretenses, it is criminal, and you could face criminal liability (e.g., jail time).

Case Studies: Unpaid Gambling Debts at a Casino and Legal Consequences

Case Study 1: Unintentional Inability to Repay

In this case study, Lisa visited a casino and incurred gambling debts. However, due to unforeseen circumstances such as a job loss and unexpected financial obligations, she became unable to repay the debts. Lisa did not intend to deceive the casino or borrow money without the intention to repay. Although she faced the prospect of being sued for unpaid debts, she did not commit a crime and was not at risk of going to jail.

Case Study 2: Deceptive Intent

John, on the other hand, knowingly borrowed money from a casino with the intention of not repaying the debts. He provided false information about his assets and misled the casino about his ability to repay the funds. John committed theft by deception and engaged in criminal fraud. His actions could lead to potential criminal prosecution and the possibility of facing jail time.

Case Study 3: Bounced Checks and Check Fraud

Sarah wrote a check to a casino to obtain chips but later realized that her account did not have sufficient funds to cover the check. However, Sarah’s inability to pay was not due to deceptive intent. It was a result of circumstances such as other checks clearing before hers, causing her account balance to fall below the required amount. Although Sarah faced potential legal consequences and could be sued for the bounced check, she did not commit check fraud and was not at risk of going to jail.