On appeal from Superior Court of New Jersey, Law Division, Atlantic County.
Morton I. Greenberg, J. H. Coleman and Havey. The opinion of the Court was delivered by J. H. Coleman, J.A.D.
[205 NJSuper Page 418] The novel issue raised by this appeal is whether a loan made to a casino gambler by one other than a licensed casino operator
is collectible. Defendant admits that Reda Gottlob (plaintiff) loaned her $5,500 in markers obtained from the Tropicana Casino in Atlantic City. Plaintiff and her husband instituted this action for payment. Cross motions for summary judgment were filed. The trial judge granted summary judgment to plaintiffs for liability and damages. He denied defendant's motion. Defendant has appealed. We now affirm the summary judgment for liability and reverse as to damages.
The pertinent facts are taken from the affidavits and certifications in support of and in opposition to the cross motions for summary judgment. While defendant was gambling at the Tropicana Casino, plaintiff would obtain markers from the cashier in plaintiff's name and turn them over to defendant so defendant could continue to gamble. The markers totaled $5,500. Defendant used the markers as cash at the gaming tables. Defendant issued two checks to plaintiff in the total sum of $5,500 as repayment of the loans. These checks were returned for insufficient funds. Defendant alleges that she made some unspecified cash payments on the indebtedness.
Defendant argues that the debt is unenforceable because plaintiff was not authorized by the Casino Control Act, N.J.S.A. 5:12-1 et seq., to make loans for casino gambling. Prior to the November 2, 1976 amendment to the New Jersey Constitution, casino gambling was illegal throughout this State. The amendment to N.J. Const. (1947), Art. 4, § 7, para. 2 which added subsection (D), authorized casino gambling in Atlantic City. Before that amendment, casino and other forms of illegal gambling debts contracted in this State were unenforceable as against public policy. See Schwartz v. Battifarano, 2 N.J. 478, 483-484 (1949); cf. Caribe Hilton Hotel v. Toland, 63 N.J. 301 (1973), (enforcing a gambling debt evidenced by a check lawfully issued in Puerto Rico). The 1976 constitutional amendment and the enactment of the Casino Control Act altered our public policy regarding enforcement of gambling debts incurred while wagering in a licensed casino. The Casino Control Act regulates the extension of credit to gamblers by licensed casino
operators, see N.J.S.A. 5:12-101 and Resorts Internat'l Hotel, Inc. v. Salomone, 178 N.J. Super. 598, 604-605 (App.Div.1981), but the present case involves the extension of credit by a nonlicensee to a casino gambler. Resorts did not address that issue.
Before the 1976 constitutional amendment, N.J.S.A. 2A:40-1 and N.J.S.A. 2A:40-3 made loans to facilitate unlawful gambling unenforceable. N.J.S.A. 2A:40-3 provides:
All promises, agreements, notes, bills, bonds, contracts, judgments, mortgages, leases or other securities or conveyances which shall be made, given, entered into or executed by any person, the whole or part of the consideration of which is for any money, property or thing in action whatsoever laid, won or bet in violation of section 2A:40-1 of this title, or for reimbursing or repaying any money knowingly lent or advanced to help or facilitate such violation, shall be utterly void and of no effect.
N.J.S.A. 2A:40-1 provides:
All wagers, bets or stakes made to depend upon any race or game, or upon any gaming by lot or chance, or upon any lot, chance, casualty or unknown or contingent event, shall be unlawful.
Those statutes, however, were effectively amended by the Casino Control Act which was enacted to implement the constitutional amendment. N.J.S.A. 5:12-124 exempts legalized casino gambling in a licensed casino in Atlantic City from the scope of N.J.S.A. 2A:40-1. It follows, ...