M
Mac
Guest
QUOTE:
Nevertheless, in this r egard we do make the
following observation which demonstrates why this action,
which has generated a large recor d and required a
considerable expenditure of time and no doubt money is, at
bottom, at least with respect to the claims we have
considered, a fatuity.
CLOSE QUOTES
--- pg 22 of this this document
---Mac, the Medic
Filed November 2, 2000
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 98-5291
DOUG GRANT, INC., RICHARD ANDERSEN, JUDY L.
BINTLIFF, LYNN V. BOHSEN, THOMAS M. BOLICK,
MICHAEL BONN, ROLAND BRYANT, SR., EUGENE
CLAUSER, ELMER CONOVER, SCOTT CONOVER,
JOSEPH CURRAN, DINO D'ANDREA, MARK F. D'ANDREA,
WARREN DAVENPORT, FRANK DELIA, KAREN DWYER,
DENNIS F. FOREMAN, ROSEMARIE FRANCIS, STEPHEN
FREEL, STAVROS GEORGIOU, KENNETH GROSS, ADIB
HANNAH, G. HASSAN HATTINA, LEROY N. JORDAN,
ROMAN KERN, RICHARD H. KESSEL, SCOTT KLEE,
JEFFREY S. KRAH, KATHLEEN E. LANE-BOURGEOIS,
THOMAS J. LOTITO, JR., JAMES MACELROY, MAR TIN
MALTER, STANLEY P. MCANALL Y, ANNE T.
MCGOWAN-NOVAK, EUGENE L. MISERENDINO, DANIEL
G. NAUROTH, MATTHEW S. PELLENBERG, DANIEL
PILONE, STEPHEN F. PINCIOTTI, ROBERT E. PROUT,
MARTIN ROSE, LYNN RUFO, VINCENT SALEK, ARLEN
SCHWERIN, JOSEPH SCIOSCIA, WILLIAM F. STRAUSS,
DOUGLAS G. TELMAN, AINO TOMSON, ANTS TOMSON,
THOMAS TOMSON, LINWOOD C. UPHOUSE, DOLORES
VALANCY, ANDREW R. VARDZAL, JR., GRANT DOUGLAS
VON REIMAN, KENNETH J. WARNER, STEVEN W ATTERS,
PAUL V. YANNESSA, DOUG GRANT COLLEGE OF
WINNING BLACKJACK, INC., SIGMA RESEARCH, INC.,
BETA MANAGEMENT, INC., FA VORABLE SITUATIONS
ONLY INC., t/a DOUG GRANT INSTITUTE OF WINNING
BLACKJACK, JAN C. MUSZYNSKI, LINDA TOMPSON,
Appellants
v.
GREATE BAY CASINO CORPORATION, GREA TE BAY
HOTEL AND CASINO t/a SANDS HOTEL AND CASINO,
SANDS HOTEL AND CASINO, HILTON HOTELS
CORPORATION, GNOC CORP. t/a "A TLANTIC CITY
HILTON," ATLANTIC CITY HILTON, BALLY'S PARK PLACE,
INC. t/a "BALLY'S PARK PLACE," BALLY'S PARK PLACE,
ITT CORPORATION, ITT CORPORATION NV , CAESAR'S
WORLD, INC. a/k/a "CAESAR'S ATLANTIC CITY ,"
CAESAR'S WORLD, CLARIDGE HOTEL & CASINO CORP .,
CLARIDGE AT PARK PLACE, INC., HARRAH'S
ENTERTAINMENT, INC., MARINA ASSOCIATES d/b/a
"HARRAH'S CASINO HOTEL", HARRAH'S CASINO HOTEL,
SUN INTERNATIONAL NORTH AMERICA INC., SUN
INTERNATIONAL HOTELS LTD., RESORTS
INTERNATIONAL HOTEL, INC., RESORTS CASINO
HOTEL, SHOWBOAT, INC., SHOWBOAT , AZTAR
CORPORATION, ADAMAR OF NEW JERSEY, INC.,
(formerly Trop World Casino and Entertainment Resort)
t/a TROPICANA CASINO AND RESORT, TROPICANA
CASINO AND RESORT, TRUMP HOTELS & CASINO
RESORTS, INC., TRUMP HOTELS & CASINO RESOR TS
HOLDINGS, L. P., TRUMP ATLANTIC CITY A SSOCIATES,
TRUMP PLAZA ASSOCIATES, L. P., TRUMP P LAZA
ASSOCIATES, TRUMP PLAZA HOTEL AND CASINO,
TRUMP TAJ MAHAL ASSOCIATES, TRUMP T AJ MAHAL
CASINO RESORT, THE TRUMP ORGANIZA TION, INC.,
TRUMP'S CASTLE ASSOCIATES, L. P., TRUM P CASTLE
ASSOCIATES, TRUMP MARINA CASINO HOTEL RESOR T,
formerly Trump's Castle Casino Resort, JOHN DOES
1-100, GRIFFIN INVESTIGATIONS, INTERNATIONAL
CASINO SURVEILLANCE NETWORK, L. P.,
SURVEILLANCE INFORMATION NETWORK, JOHN DOES
101-200, F. MICHAEL DAILY, ESQ., QUINLAN, DUNNE,
DAILY & HIGGINS, ELLEN BARNEY BALINT, MERANZE &
KATZ, CAPLAN & LUBER, LLOYD S. MARKIND, ESQ.,
RICHARD L. CAPLAN, ESQ., SHARON MORGAN, ESQ.,
MICHELE DAVIS, ESQ.
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civ. No. 97-04291)
District Judge: Honorable Joseph E. Irenas
Argued October 5, 2000
BEFORE: NYGAARD, GREENBERG and COWEN,
Circuit Judges
2
(Filed: November 2, 2000)
Howard A. Altschuler (argued)
66 Saltonstall Parkway
East Haven, CT 06512
Attorney for Appellants
Frederick H. Kraus
Sands Hotel & Casino
Indiana Avenue & Brighton Park
Atlantic City, NJ 08401
Attorney for Appellees
Greate Bay Casino, Greate
Bay Hotel and Sands Hotel
and Casino
Adam N. Saravay (argued)
Tompkins, McGuire,
Wachenfeld & Barry, LLP
4 Gateway Center
Newark, NJ 07102
Attorneys for the Trump Casino
Appellees and Co-Counsel for the
Remaining Casino Appellees and
Griffin Investigations
John M. Donnelly (argued)
Levine, Staller, Sklar, Chan,
Brodsky, & Donnelly, P.A.
3030 Atlantic Ave.
Atlantic City, NJ 08401
Attorneys for Casino Appellees
(other than the Trump Casino
Defendants) and Griffin
Investigations
3
OPINION OF THE COURT
GREENBERG, Circuit Judge.
I. INTRODUCTION
This matter comes on before this court on appeal from an
order entered on May 1, 1998, partially dismissing this
action pursuant to Fed. R. Civ. P. 12(b)(6) for failure to
state a claim on which relief can be granted. 1 See Doug
Grant, Inc. v. Greate Bay Casino Corp., 3 F. Supp.2d 518
(D.N.J. 1998). The appellants had instituted this action in
the Superior Court of New Jersey but the appellees r emoved
it to the district court. Consequently, when the district
court entered the Rule 12(b)(6) order it r emanded
appellants' state-law claims that it did not addr ess to the
Superior Court. In view of the procedural posture of this
case, we treat the allegations of fact in the complaint as
true, and consider them in a light most favorable to the
appellants.2
The individual appellants are blackjack players who have
frequented Atlantic City casinos operated by the casino
appellees. Of the 60 individual appellants, all but six have
developed card-counting skills for playing blackjack
enabling them to reduce or eliminate the nor mal odds in
_________________________________________________________________
1. In our extensive Introduction and at other places in our opinion,
we
essentially have tracked the district court's compr ehensive opinion.
We
also note that the Supreme Court of New Jersey in Campione v. Adamar
of N. J., Inc., 714 A.2d 299, 301, 305-06 (N.J. 1998), discussed the
countermeasures the New Jersey Casino Control Commission has
allowed the casinos to take against card-counters. Of course, the
casinos' use of these countermeasures is at the heart of this case.
2. Inasmuch as the complaint references and relies on the content of
certain documents, we consider them on this appeal. See Churchill v.
Star Enter., 183 F.3d 184, 190 n.5 (3d Cir. 1999); Rose v. Bartle, 871
F.2d 331, 339 n.3 (3d Cir. 1989). Indeed, this case is unusual as the
appendix consists of four volumes and thus is of a length which might
be expected on an appeal from a summary judgment rather than on
appeal from a motion to dismiss.
4
favor of the casinos and, indeed, to turn the odds in their
favor. The corporate appellants are associated with
appellant Doug Grant, Inc., a New Jersey corporation,
whose predecessor corporations operated car d-counting
schools and mock casinos established by the appellant,
Doug Grant, a renowned card-counter . Doug Grant, Inc.
also provided the training for several cooperative player
groups, including many of the appellants her e, who pooled
their financial resources and agr eed to share their
blackjack winnings.
A. The Play of Blackjack, Card-Counting and Shuffling-
At-Will and Other Countermeasur es
The gravamen of appellants' complaint is that the casinos
have taken countermeasures that the appellants regard as
illegal to eliminate the advantage that a skilled card-
counter may have over them in playing blackjack, the one
casino game in which a player's skill may incr ease his
chance of winning to the point of eliminating the winning
odds in favor of the "house." See Campione v. Adamar of N.
J., Inc., 714 A.2d 299, 301 (N.J. 1998). Car d-counters use
intellect and memory to identify the time during the course
of play when a player's odds of winning are better or worse.
Thus, the individual appellants allege that the casinos have
impaired their ability to win money from the casinos in
blackjack. The corporate appellants allege that their schools
and mock casinos were forced to close as a result of the
casinos' countermeasures against car d-counters, and
because of bomb threats, break-ins, destruction of
property, theft of student lists, stalking and other
intimidation tactics.
It is necessary for us partially to describe how blackjack
games are run in order to put appellants' allegations in
context. Blackjack is played with decks containing 52 cards
of four suits (hearts, diamonds, clubs and spades) with
each suit containing 13 cards (Ace, King, Queen, Jack, 10,
9, 8, 7, 6, 5, 4, 3, 2). See N.J.A.C. S 19:46-1.17. Before a
blackjack game starts, the dealer receives one or more,
usually between six to eight, card decks fr om a casino
supervisor and inspects them in the presence of the
floorperson. See id. S 19:47-2.4(a). After inspecting the
cards, the dealer takes them to a blackjack table and
5
spreads them out in a fan, face upward, for visual
inspection by the first player or players to arrive at the
table. See id. S 19:47-2.4(b). After these players are afforded
an opportunity to inspect the cards, the dealer turns them
face downward on the table, mixes them thor oughly, and
shuffles them until they are "randomly intermixed." The
dealer then places the cards into a stack. See id. S 19:47-
2.4(c); id. S 19:47-2.5(a). After the shuffling is completed,
the dealer asks the player seated at a particular position at
the table, as defined by the regulations of the Casino
Control Commission ("CCC"), the casino r egulatory agency,
id. 19:47-2.5(e), to cut the deck. See id. S 19:47-2.5(b). The
player cuts the deck by placing a plastic cutting card in the
stack at least ten cards from either end. See id. S 19:47-
2.5(c).
Once the player has inserted the cutting car d, the dealer
takes all the cards in front of the cutting card and places
them at the back of the stack. See id. S 19:47-2.5(d). The
dealer then takes the entire stack of shuffled cards and
cuts and aligns it along the side of the dealing shoe which
has a mark on its side enabling the dealer to insert the
cutting card so that it is in a position "at least
approximately" one-quarter of the way fr om the back of the
stack. See id. S 19:47-2.5(d); id. S 19:46-1.19(d)(4). The
dealer then inserts the stack of cards into the dealing shoe
for commencement of play. See id. S 19:47-2.5(d). The cards
behind the cutting card will not be used during the game.
Once play has commenced the dealer deals the car ds to
the players in a series of hands until the dealer r eaches the
cutting card. When the dealer reaches the cutting card, the
dealer repeats the shuffling process and cutting procedures
described above. See id. S 19:47-2.5(h).
A blackjack player's object is to reach as close as possible
to a total card value of 21 without exceeding that value. A
player exceeding 21 loses regardless of the dealer's
subsequently acquired hand. Persons in the casino
industry and card-counters have come to r ecognize that, in
a player's endeavor to reach a value as close as possible to
21, certain cards are more favorable to the player and
certain cards are more favorable to the dealer. In particular,
appellants assert that the Ace, King, Queen, Jack and Ten
6
are favorable to a player, but the 6, 5, 4, 3, and 2 are
favorable to the dealer and thus to the house. The 7, 8, and
9 are said to be neutral. At any point during the play, the
cards in a shoe can contain more player -favorable cards or
more dealer-favorable cards. When there are more player-
favorable cards, a player's chances of winning are increased
but when there are more dealer -favorable cards, the
dealer's chances of winning are increased. Whether and
when a shoe will turn out to be player - or dealer-favorable
is purely random.
Card-counters attempt to "count cards" to determine
whether and when a shoe is player-favorable. They then
vary their bets, i.e., betting high when the shoe is player-
favorable and low when the shoe is dealer-favorable to
increase their chances of having a winning r ound of play.
Bets are placed before each individual r ound of blackjack,
usually within established minimum and maximum limits
for the table. According to the appellants, successful card-
counting contains several basic elements including the
assignment of a point value to each card, maintaining a
running total of those points during play, betting strategies,
playing strategies, money management, a sufficient
bankroll, and "the intangible ability to consistently apply
these interrelated strategies under fast-paced casino
conditions." See app. at 24.
For maximum advantage, card-counters need to be able
to view, through the rounds of play, as many of the cards
in the shoe as possible. The greater number of cards they
are able to view, the easier it is for them to determine to
whom the remaining cards in the shoe ar e favorable. For
this reason, card-counters prefer that the dealer place the
cutting card toward the end of the shoe, leaving a small
number of cards behind the cutting-card and increasing
the overall number of cards in play. Car d-counters also
prefer to have the entire shoe of car ds played. If the dealer
reshuffles prior to reaching the cutting card, then the card-
counters' opportunity to bet high on a shoe with a
remainder of mostly player-favorable car ds is impaired.
The casinos, on the other hand, prefer to decr ease the
card-counters' opportunity to bet high on a player-favorable
shoe. Therefore, it is in their inter est to decrease the card-
7
counters' chances of determining whether a shoe is player-
favorable by playing with fewer cards in the shoe, i.e.,
placing the cutting card as far from the back of the stack
as permitted by the CCC regulations. It is also in the
casinos' interest to reshuffle prior to reaching the cutting
card when the remaining cards in a shoe are player-
favorable. These practices, however, come at a cost to the
casino as the more often the dealer goes thr ough the
meticulous shuffling process, the shorter the actual time of
play and thus the smaller the casino's profits.
Appellants allege that the casinos maintain car d-counting
teams and/or video and computer surveillance equipment
to identify card-counters and inform the dealers of their
participation in a blackjack game so that the dealers can
take countermeasures against them. Appellants challenge
these practices, claiming they violate the New Jersey
"cheating games" section in the Casino Contr ol Act, N.J.
Stat. Ann. S 5:12-115 (West 1996), which provides that it
shall be unlawful:
Knowingly to deal, conduct, carry on, operate or expose
for play any game or games played with cards . . .
which have in any manner been marked or tamper ed
with, or placed in a condition, or operated in a manner,
the result of which tends to deceive the public or tends
to alter the normal random selection of characteristics
or the normal chance of the game which could
determine or alter the result of the game.
The appellants make several specific allegations to
support their claims. See Doug Grant, 3 F . Supp.2d at 524-
25. First, they argue that the card-counter identifying
process fundamentally is flawed because it tends unfairly to
misidentify non-card-counters as card-counters. They claim
casinos define card-counters as (1) any patr on who
increases a bet during a player-favorable count, or (2) any
patron who knows or is related to someone who has
increased a bet during a player-favorable count. According
to appellants, a player the casino identifies as a card-
counter is "branded for life" and never is able to play a
"fair" game of blackjack without being subjected to
countermeasures. The casinos allegedly share information
about suspected card-counters through defendant Griffin
8
Investigations and other similar agencies. These agencies
allegedly keep dossiers containing the pictur es of suspected
card-counters which casino employees then use to spot
card-counters for the purpose of knowing when to
implement countermeasures.
Second, appellants claim that the casinos utilize what
they term the "cheating-at-will" pr eferential shuffle and
which, as codified by the CCC regulations, generally is
known as the "shuffle-at-will." A dealer r eshuffling prior to
reaching the cut-card marker shuffles-at-will. A casino will
shuffle in this manner when its card-counting team
determines that the shoe is player-favorable at a table
where it suspects card-counters ar e playing. Appellants
allege that the shuffle-at-will provides an extra 2%
advantage to the casino, nearly double its nor mal chance of
winning, and thus providing the casinos with a windfall of
millions of dollars. Id. at 525. They also claim that a casino
can shuffle-at-will abusively to the disadvantage of players
who are not card-counters by shuffling-at-will even when
its employees do not suspect that there is a card-counter
playing at a table. Id.
Appellants recount specific instances in which individual
appellants allegedly were subjected to shuffling-at-will by
specific casinos throughout the past ten years. On some,
but not all, of these occasions, the player r eported the
shuffle-at-will to the CCC and/or the New Jersey
Department of Gaming Enforcement ("DGE") official on-site
at every casino. According to appellants, the casinos never
have responded to such complaints by admitting to
counting cards and shuffling during a player -favorable
count. Id.
Appellants also allege that because they have been
identified as card-counters, they are limited to one wager at
a time, are refused cards, have bets pushed back, and are
forced to bet below the original posted limit at the table. Id.
Moreover, they allege that "shills" associated with the
casinos sometimes occupy all seats at tables at which they
wish to play. Id. The appellants allege that they have been
treated in these adverse ways even though players who are
not card-counters are not so treated.
9
Appellants also claim that the casinos have denied them
hospitality "comps," such as meals, after identifying them
as card-counters. Id. Finally, appellants allege that they
have been threatened, assaulted and stalked because of
their suspected card-counter status. Id. They allege that
they have been threatened in person while at the casinos
by both known and unknown casino employees and that
they have been threatened and sent pornographic materials
over the Internet by unnamed John Does allegedly
connected to the casinos. Id.
B. The Casino Control Act and CCC Regulations
The New Jersey Casino Control Act, N.J. Stat. Ann.
S 5:12-1 et seq. (West 1996) (the "Act"), gives the CCC
comprehensive authority to define and r egulate the rules
and conduct of play for blackjack and other authorized
casino games. See Campione, 714 A.2d at 304; Uston v.
Resorts Int'l Hotel, Inc., 445 A.2d 370, 372-73 (N.J. 1982).
It also grants the CCC "exclusive jurisdiction" over the
interpretation and enforcement of r egulations governing "all
matters delegated to it or within the scope of its powers
under the provisions of [the Act]." N.J. Stat. Ann. S 5:12-
133b; see also id. 5:12-69, 70. That jurisdiction delegates
to the CCC the power to promulgate regulations regarding
the rules of casino games, including blackjack, id. SS 5:12-
69-70f, gambling related advertising, id. S 5:12-70o, and the
enforcement of gaming regulations, including the
investigation, adjudication, and punishment of r egulatory
violations, id. SS 5:12-63b, f, g;id. S 5:12-64; id. S 5:12-129.
The regulations governing blackjack ar e exhaustive and
set forth in great detail the rules for the conduct of the
game. See N.J.A.C. S 19:47-2.1 et seq. Indeed, the New
Jersey Supreme Court has stated that, "t is no
exaggeration to state that the Commission's r egulation of
blackjack is more extensive than the entir e administrative
regulation of many industries." Uston , 445 A.2d 373. The
CCC is very aware of the card-counter controversy. As the
parties have recognized, the CCC carefully has considered
and addressed in its regulatory capacity the effect card-
counters can have on the game and the ways in which
casinos should be permitted to respond to professional
card-counters. See, e.g., 14 N.J. Reg. 467-70 (May 17,
10
1982); 14 N.J. Reg. 559-69 (June 7, 1982); 14 N.J. Reg.
841 (Aug. 2, 1982); 23 N.J. Reg. 1784 (June 3, 1991); 23
N.J. Reg. 2613 (Sept. 3, 1991); 23 N.J. Reg. 3350 (Nov. 4,
1991); 23 N.J. Reg. 3354 (Nov. 4, 1991); 25 N.J. Reg. 3953
(Sept. 7, 1993); 25 N.J. Reg. 5521 (Dec. 6, 1993). The CCC
regulations authorize the casinos to use certain
countermeasures to prevent car d-counters from overcoming
the statistical advantage that is necessary to ensur e the
casinos' financial viability.
The CCC adopted many of its regulations authorizing
countermeasures in response to the New Jersey Supreme
Court's ruling in Uston, 445 A.2d 370, a case considering
whether casinos have the authority to exclude car d-
counters from their premises. The court determined that
casinos were not authorized to exclude car d-counters,
reasoning that the Act gave the CCC exclusive and plenary
authority to set the rules and methods of play of casino
games and that the CCC had not authorized the exclusion
of card-counters as a countermeasur e.3 The court
suggested, however, that if the CCC wanted to approve
measures to neutralize the card-counter threat, it might be
able to exclude card-counters, provided that the regulation
did not violate constitutional or statutory limits. Uston, 445
A.2d at 375-76.
Yet, prior to Uston, the CCC had codified a practice which
the casinos used as a card-counter counter measure even
though the CCC did not promulgate it for that purpose.
This regulation provides that: "[a] casino licensee, in its
discretion" may permit a player to"wager on [more than]
one box at a Blackjack table." N.J.A.C. S 19:47-2.14. The
CCC had been allowing the use of this practice against
card-counters through its approval of casinos' internal
control pursuant to N.J. Stat. Ann. S 5:12-99. The rule
specifically grants casinos discretion to allow players
(usually non-card-counters) to bet on mor e than one box,
and presumably, in light of the discretionary language,
allows them to preclude card-counters fr om betting on
more than one box.
_________________________________________________________________
3. It appears that prior to Uston the casinos on at least some
occasions
excluded card-counters and did so with "overwhelming force." See State
v. Sanders, 448 A.2d 481, 485 (N.J. Super . Ct. App. Div. 1982).
11
After Uston, the CCC held a series of hearings on the
issue of card-counters and decided to enact r egulations
authorizing the casinos to use certain measur es to
neutralize the potential negative effect car d-counters could
have on their financial viability. See Campione, 714 A.2d at
305. The new regulations, which the New Jersey Supreme
Court urged the CCC to consider in lieu of allowing the
casinos to exclude card-counters, balanced the statutory
goals of casino viability and fair odds to all players. See
N.J. Stat. Ann. S 5:12-100e. The CCC intended the
regulations to ensure both the fair ness and integrity of
casino gambling and "the right of the casinos to have the
rules drawn so as to allow some reasonable pr ofit." Uston,
445 A.2d at 376; see also 14 N.J. Reg. 560-61 (June 7,
1982); 23 N.J. Reg. 1784 (June 3, 1991).
Several of these countermeasures involved the manner by
which casinos could shuffle the blackjack car ds. The first
approved shuffling method is known as the"Bart Carter
Shuffle," a "shuffling procedur e in which approximately one
deck of cards is shuffled after being dealt, segregated into
separate stacks and each stack is inserted into pr emarked
locations within the remaining decks contained in the
dealing shoe." N.J.A.C. S 19:47-2.1; see also 14 N.J. Reg.
559 (June 7, 1982); 14 N.J. Reg. 841 (Aug. 2, 1982). The
CCC also approved the "shuffle-at-will," which we have
described above, to allow the casinos to shuffle after any
round of play. To implement this appr oval, the CCC
amended the existing shuffle regulation by adding language
regarding the casinos' authority to shuffle "after each round
of play":
(a) Immediately prior to commencement of play, after
any round of play as may be determined by the casino
licensee and after each shoe of cards is dealt, the
dealer shall shuffle the cards so that they are randomly
intermixed.
. . .
(h) A reshuffle of the cards in the shoe shall take
place after the cutting card is reached in the shoe . . .
except that:
12
1. The casino licensee may determine aft er each
round of play that the cards should be r eshuffled;
2. When the `Bart Carter Shuffle' is util ized a
reshuffle shall take place after the car ds in the discard
rack exceed approximately one deck in number .
N.J.A.C. S 19:47-2.5; see 14 N.J. Reg. 559 (June 7, 1982),
14 N.J. Reg. 841 (Aug. 2, 1982).
The CCC also has approved the use of a device known as
the continuous shuffling shoe. In place of the dealing and
shuffling requirements set forth in N.J.A.C. 19:47-2.5 and
2.6, a casino licensee may utilize a dealing shoe or other
device designed to reshuffle the cards automatically,
provided that the CCC or its authorized designatee has
approved such shoe or device and the pr ocedures for
dealing and shuffling the cards through the use of this
device. See N.J.A.C. S 19:47-2.21; see also 14 N.J. Reg. 559
(June 7, 1982), 14 N.J. Reg. 841 (Aug. 2, 1982).
The shuffling regulations, particularly the most
commonly used shuffle-at-will, have enabled the casinos to
lessen the card-counters' ability to deter mine whether cards
remaining in the shoe are player-favorable. As we already
have noted, when the cards are reshuffled continuously or
prior to the dealer reaching the cutting-car d in the shoe,
card-counters lose their potential advantage over the
casinos because they no longer can increase their bets,
secure in the knowledge that their chance of r eceiving
player-favorable cards has been incr eased.
The CCC also authorized one non-shuffling
countermeasure after the Uston decision--an increase in
the number of decks casinos are allowed to use in
blackjack play. See N.J.A.C. S 19:47-2.2. This change
helped the casinos combat card-counters by incr easing the
number of cards card-counters would need to track to
determine whether a shoe was player-favorable. Plainly, the
more cards in the shoe, the more difficult a player's task is
to keep track of the cards.
After the CCC authorized these initial counter measures,
in 1991 it approved another regulation which provides that:
13
[A] casino licensee may at any time change the
permissible minimum or maximum wager at a table
game, without notifying the Commission of such
change, upon posting a sign at the gaming table
advising patrons of the new permissible minimum or
maximum wager and announcing the change to
patrons who are at the table.
N.J.A.C. S 19:47-8.3(c); see also 23 N.J. Reg. 1784 (June 3,
1991); 23 N.J. Reg. 2613 (Sept. 3, 1991); 23 N.J. Reg. 3350
(Nov. 4, 1991); 23 N.J. Reg. 3354 (Nov. 4, 1991). This
regulation gives the casinos the authority to lower the
betting limit whenever it identifies a car d-counter so that
the card-counter will not be able to bet high when the shoe
becomes player-favorable. Then, in 1993, the CCC made a
further addition to its regulations which, as further
amended in 1999, provides:
(b) A casino licensee may offer:
1. Different maximum wagers at one gaming table for
each permissible wager in an authorized game; and
2. Different maximum wagers at dif ferent gaming
tables for each permissible wager in an authorized
game.
(c) A casino licensee shall provide notice of the
minimum and maximum wagers in effect at each
gaming table, and any changes thereto, in accor dance
with N.J.A.C. 19:47-8.3.
(d) Notwithstanding (c) above, a casino licensee may, in
its discretion, permit a player to wager below the
established minimum wager or above the established
maximum wager at a gaming table.
(e) Any wager accepted by a dealer which is in excess
of the established maximum permitted wager at that
gaming table shall be paid or lost in its entir ety in
accordance with the rules of the game, notwithstanding
that the wager exceeded the current table maximum or
was lower than the current table maximum.
N.J.A.C. 19:47-8.2(b) to (e); see 25 N.J. Reg. 3953 (Sept. 7,
1993); 25 N.J. Reg. 5521 (Dec. 6, 1993). This r egulation
14
clarified that the casinos could limit specifically the wagers
of only those patrons identified as car d-counters, while
permitting non-card-counters to continue betting at higher
limits.
The New Jersey courts seem not to doubt the legality of
the CCC-authorized countermeasures. In particular, the
trial court in Campione recognized that the practice of
"shuffling at will," the central concer n in this case identified
by the district court, is authorized by CCC r egulation, see
N.J.A.C. S 19:47-2.5, and affects all patrons, even those not
counting cards, at a blackjack table. See Campione v.
Adamar of N. J., Inc., 643 A.2d 42, 50-51 (N.J. Super. Ct.
Law Div. 1993), rev'd on other gr ounds, 694 A.2d 1045 (N.J.
Super. Ct. App. Div. 1997), mod. and af f 'd, 714 A.2d 299
(N.J. 1998). Further, on appeal in Campione, the New
Jersey Superior Court, Appellate Division, found that the
CCC "authorizes the disparate treatment of card-counters."
694 A.2d at 1050. The court noted that the CCC has
approved the countermeasures allowing for betting limits
and permitting casinos to vary the number of boxes in
which particular players can wager. Id. at 1047. Finally, the
New Jersey Supreme Court in Campione, while not
expressly upholding the countermeasur es the CCC has
allowed, implicitly made it clear the CCC lawfully may
permit such countermeasures. 714 A.2d at 305, 308.
II. JURISDICTION
The complaint in this action alleged violations of the
United States Constitution, 42 U.S.C. S 1983, and the
federal RICO statute, as well as causes of action under the
New Jersey RICO statute, constitution and common law.
Thus, the district court had jurisdiction under 28 U.S.C.
SS 1441, 1331, and 1367. We have jurisdiction pursuant to
28 U.S.C. S 1291.
III. STANDARD OF REVIEW
Our review of a district court's order of dismissal of a
complaint pursuant to Rule 12(b)(6) for failur e to state a
claim upon which relief may be granted, is plenary and we
apply the same test as the district court. See Maio v. Aetna,
15
Inc., 221 F.3d 472, 481 (3d Cir. 2000). Thus, "[a] motion to
dismiss pursuant to Rule 12(b)(6) may be granted only if,
accepting all well-pleaded allegations in the complaint as
true, and viewing them in the light most favorable to
plaintiff, plaintiff is not entitled to relief." Id. at 481-82.
However, while our standard of r eview requires us to accept
as true all factual allegations in the complaint,"we need
not accept as true `unsupported conclusions and
unwarranted inferences.' " City of Pittsburgh v. West Penn
Power Co., 147 F.3d 256, 263 n.13 (3d Cir . 1998) (quoting
Schuylkill Energy Res., Inc. v. Pennsylvania Power & Light
Co., 113 F.3d 405, 417 (3d Cir. 1997)). "[C]ourts have an
obligation in matters before them to view the complaint as
a whole and to base rulings not upon the presence of mere
words but, rather, upon the presence of a factual situation
which is or is not justiciable. We do draw on the allegations
of the complaint, but in a realistic, rather than a slavish,
manner." Id. at 263.
IV. DISCUSSION
A. RICO Claims
Appellants' first count alleges claims for racketeering
under federal RICO, 18 U.S.C. S 1964(c), New Jersey RICO,
N.J. Stat. Ann. S 2C:41-4c (West 1995), and the RICO
provisions of the Act, N.J. Stat. Ann. S 5:12-127c (West
1996). As appellees point out, the predicate acts of alleged
racketeering on which appellants' base their RICO claims
consist almost exclusively of the use of counter measures or
alleged violations of other CCC regulations. In order to
make out a RICO claim, appellants first must show that the
casinos committed the predicate criminal acts enumerated
by RICO. See, e.g., 18 U.S.C. SS 1961, 1962. Appellants
claim that the casinos committed the following pr edicate
acts: shuffling-at-will when the count was player -favorable,
using computer and video technology to assist in counting
cards and identifying card-counters, denying comps to
appellants, using shills, limiting plaintiffs to one hand of
blackjack at a time, lowering betting limits, and failing to
disclose the use and nature of the disputed
countermeasures. See br. 30-41; Doug Grant, 3 F. Supp.2d
at 531-32. Based on the premise that these uses of
16
authorized countermeasures and other alleged regulatory
violations are criminal acts, appellants' complaint alleges
that the casinos' operation of blackjack violates criminal
statutes regarding unlawful debt collection, transmission of
gambling information, operation of illegal gambling
business, and interstate commerce for an unlawful activity.
The district court believed that the primary purported
predicate act on which appellants relied is the shuffling of
cards when the count is favorable to the players.4 The
complaint alleges that use of the "shuffling-at-will"
countermeasure constitutes a predicate act of racketeering
because it violates the criminal casino "cheating" statute,
N.J. Stat. Ann. S 5:12-115. The trial court in Campione
rejected this precise claim. Campione , 643 A.2d at 51
("labeling of the shuffling at will as `cheating' is specious").
Moreover, despite appellants' pr otestations, the regulation
itself makes clear that a casino at its discr etion may shuffle
at the conclusion of any round of play:
(a) Immediately prior to commencement of play, after
any round of play as may be determined by the casino
licensee and after each shoe of cards is dealt, the
dealer shall shuffle the cards so that they are randomly
intermixed.
. . .
(h) A reshuffle of the cards in the shoe shall take place
after the cutting card is reached in the shoe as
provided in N.J.A.C. 19:47-2.6(1) except that:
1. The casino licensee may determine after each
round of play that the cards shall be r eshuffled.
_________________________________________________________________
4. In their brief, the appellants contend that the district court was
incorrect in this characterization, as their"central concern is the
deceptive, unadvertised and clandestine use of countermeasures only
when the cards favor players." See br. at 31. We will not linger on
this
point for two reasons. First, the casinos take their countermeasures
quite openly. For example, it should be appar ent to anyone at a table
when the dealer shuffles before the cutting card is reached. Second,
it
seems clear that, as the district court recognized, the principal
countermeasure is shuffling-at-will.
17
N.J.A.C. S 19:47-2.5(a), (h).
Appellants attempt at length to skew the plain meaning
of this regulation and the relevant r egulatory history
leading to its adoption to convince us that the CCC has
authorized only a "random shuffle-at-will," i.e., not a
reshuffle that occurs only during player favorable counts.
See br. at 33. Appellants' restrictive interpretation of the
shuffle-at-will regulation, however, runs contrary to its
express language.
The regulatory history makes clear that the CCC is fully
aware of and allows the practice of shuffling-at-will when
there is a player-favorable count as a countermeasure
against card-counters. When the CCC published the
proposed regulation to allow the casinos to shuffle-at-will,
it noted that the casinos might shuffle when the count is
favorable and that this practice might affect the odds of the
game:
The economic impact of this proposed amendment
would vary depending on when in fact the car ds were
shuffled. For example, if the cards wer e always shuffled
after the first round of play regar dless of the point
count, then the casino advantage against the basic
strategy player and average player would probably
remain the same with the advantage enjoyed by the
card counter being decreased. If the car ds, however,
were only shuffled in positive point count situations
and not in negative point count situations, the casino
advantage against all types of players would incr ease.
14 N.J. Reg. 470 (May 17, 1982).
Appellants appear to take issue with the propriety of the
shuffle-at-will regulation. But even assuming that in this
action we should entertain a challenge to the r egulation, we
perceive nothing illegal in it.5 In any event, even if the
_________________________________________________________________
5. There have been numerous state administrative and judicial
proceedings regarding the issues before us but it is difficult from
the
parties' briefs and appendix to discern their exact status. In any
event,
we do not find any state determination inconsistent with the result we
reach. Significantly, the parties are in agreement that shortly after
18
regulation is an improper exercise of the CCC's authority,
a conclusion that we reject, a casino following it before its
invalidation hardly could be subject to RICO liability for
that conduct. In our view, a casino does not commit a
predicate RICO act when it engages in conduct the CCC
expressly permits.
We are disturbed that appellants have couched their
arguments in dramatic hyperbole obfuscating the real
issues. Indeed, we are satisfied that the appellants have
mischaracterized the facts. For instance, appellants
characterize the use of the shuffle-at-will as"secretly
removing cards from a blackjack game in progress." See br.
at 30. But the reshuffle is hardly secr et as the dealer does
it openly in the view of the players. Moreover , a dealer
reshuffling does not remove cards from the deck. Rather,
the reshuffle simply places the cards in a different random
order for the next hands.
Appellants further allege that the shuffle-at-will is a RICO
criminal predicate act because it has a tendency to alter the
normal random chance of the game. See br. at 32-39. What
appellants fail to realize, however, is that the normal
random chance of the game is defined pursuant to the
statutory rules and CCC regulations. As the CCC has
explained:
[T]he normal chance and random character of any
casino game is necessarily defined and deter mined by
the rules governing the conduct of the game. Since the
Commission has the statutory authority to initially
establish the rules of the game, N.J.S.A. S 5:12-100e
_________________________________________________________________
appellants filed this action, the individual appellants "filed a
petition
with the CCC with claims identical to those raised in the federal
complaint." See appellants' br. at 4; appellees' br. at 5-6. In
addition, the
individual appellants later filed a declaratory petition with the CCC
seeking its "interpretive ruling on pr ovisions of the Act, blackjack
regulations and casino practices that ar e at issue in this appeal."
See
appellants' br. at 6; appellees' br. at 6. Apparently, appellants were
not
satisfied with the outcome of the declaratory petition, see 31 N.J.
Reg.
555 (Feb. 16, 1999), as they have appealed fr om the determination to
the
New Jersey Superior Court, Appellate Division.
19
and 70f, and primary jurisdiction to resolve any issues
concerning interpretation of the Act and the rules
promulgated thereunder, . . . it is absurd to allege that
practices approved by the Commission as being
consistent with its rules constitute `cheating' under
section 115 of the Act.
31 N.J. Reg. 556 (Feb. 16, 1999). While appellants may
wish to have the CCC rethink the scope of the shuffle-at-
will regulation, we are satisfied that after being stripped of
its conclusory legal dressing, there is no allegation in the
complaint regarding reshuffling sufficient to support a
RICO claim against the casino defendants.
Appellants' other alleged predicate acts ar e similarly
insufficient to support a RICO claim. The alleged violations
of criminal statutes regarding unlawful debt collection, 18
U.S.C. S 1962, transmission of gambling infor mation, 18
U.S.C. S 1084, interference with commerce by threats or
violence, 18 U.S.C. S 1951, interstate commer ce for
unlawful activity, 18 U.S.C. S 1952, and operating an illegal
gambling business, 18 U.S.C. S 1955, all derive from the
allegations regarding the use of authorized
countermeasures and other alleged but in fact nonexistent
violations of the CCC regulations. Any debts allegedly
"unlawfully collected" are those lost by players during
blackjack games played in accordance with the CCC
regulations. Any "illegal gambling business" or "unlawful
activity in interstate commerce" is simply the play of
blackjack as authorized by the CCC. Similarly, the casinos
do not engage "in unlawful activity" or "operating an illegal
gambling business" by not offering appellants or anyone
else "comps," which are nothing mor e than free gifts from
the casinos. While appellants claim that the casinos are
obliged to offer "comps," in our view if they fail to do so
they are not committing criminal acts in any way impacting
on the integrity of the blackjack game. If appellants want to
bring a judicial action to recover the value of"comps,"
surely their forum should be a New Jersey state court, at
least in some instances the small claims part. Plainly, the
casinos' activities of which appellants complain do not
constitute crimes and therefore ar e not predicate RICO
acts.
20
Furthermore, appellants, although mentioning the use of
"shills" in their complaint, have not made any allegations
that the casinos violate the statutory prohibition of the use
of "shills," i.e., persons who induce potential patrons to
enter a casino or induce them to play any game. See N.J.
Stat. Ann. S 5:12-1001 (West 1996). Certainly the casinos
have not used shills to encourage appellants to play
blackjack in their premises.
In their brief, appellants further assert that the CCC
stated in an administrative proceeding that it would be
deceptive for casinos actively to solicit a player to count
cards in its casino without letting the player know that
countermeasures will be used against those suspected of
counting cards. See br. at 11, 25. Appellants, however, fail
to cite the full text of the CCC's statement, which
concluded:
[T]he Commission does not believe that any of the
exhibits submitted by the commenters come even close
to supporting an allegation of active solicitation of card
counter play by a casino licensee.
31 N.J. Reg. 556 (Feb. 6, 1999). Thus, appellants' r eference
to the CCC's statement adds nothing to their allegation that
the casinos' use of shills constitutes a RICO act.
Appellants also assert that it is deceptive for the casinos
to fail to provide players with a complete text of the rules
governing the play of blackjack. This allegation also fails to
support a claim for relief. As we set forth above, the rules
and regulations governing blackjack ar e numerous and
thus they do not lend themselves to inclusion in a short
manual. Further, the sample casino br ochure in the
appendix explaining blackjack on its face is not deceptive.
See app. at 832-34. While it does not purport to set forth
all of the blackjack rules, it does give the infor mation
needed by a player to play the game.
The appellants also allege that it is impermissible for the
casinos to require one player's wager to be less than that of
other players at the same table. See br . at 40 (citing N.J.
Stat. Ann. S 5:12-100g (West 1996)). As we mentioned,
however, the CCC has adopted a regulation that specifically
allows casinos to set different wager limits, even among
21
players at the same table, if a player is suspected of card
counting. See N.J.A.C. S 19:47-8.2(b)-(d). As a result, the
casinos cannot be said to have violated the Act in a manner
to support a RICO cause of action. While appellants may
wish to challenge the propriety of the r egulation, they have
not stated a RICO cause of action against the casinos
whose actions are in compliance with the law and the
CCC's regulations.
Appellants next argue that the casinos' failur e to obtain
prior approval for the countermeasur es they implement
constitutes a predicate act. See br . at 40-41. Yet appellants
also recognize that the CCC has determined that the
casinos do not need prior approval to implement the
measures. See id. at 41. While the appellants note that that
ruling is being challenged on appeal, it will be time enough
for a federal court to consider the RICO implications if and
when the CCC determines that the casinos' practices are
illegal and the casinos do not comply prospectively with the
CCC's determinations.
The only alleged predicate acts that ar e not based on
CCC regulations are the allegations of assaults, threats,
and stalking-in-person and via the Internet. Appellants
allege that one appellant was knocked off his seat on one
occasion, that some appellants were followed ar ound
casinos, and that one appellant was grabbed by the arm
while being escorted out of a casino. However , these minor
altercations cannot be regarded as conduct egregious
enough to serve as predicate acts sufficient to support what
appellants apparently believe is massive litigation, in which,
before trebling, they are seeking at least $347,532,800 in
damages. See Doug Grant, 3 F. Supp.2d at 522 n.1. Nor do
the appellants' claims of receiving anonymous
pornographic, offensive and threatening messages over the
Internet from John Doe defendants constitute predicate
acts attributable to the appellees, as appellants put forth
no basis for concluding or even alleging that anyone
associated with the casinos sent the messages. Accor dingly,
we will affirm the order of the district court dismissing the
state and federal RICO causes of action.
For the reasons we have set forth, we have r eached the
conclusion that appellants' allegations that the casinos or
22
any appellee has committed predicate RICO acts are
completely insubstantial and border on the frivolous. In the
circumstances, inasmuch as appellants have failed to allege
any predicate act upon which to base a RICO claim, we
need not determine conclusively whether appellants
properly have pleaded injury to business or pr operty as
required for a RICO damages action. See 18 U.S.C.
S 1964(c); N.J. Stat. Ann. S 2C:41-4c (W est 1995); Maio, 221
F.3d at 483-84. Nevertheless, in this r egard we do make the
following observation which demonstrates why this action,
which has generated a large recor d and required a
considerable expenditure of time and no doubt money is, at
bottom, at least with respect to the claims we have
considered, a fatuity.
Unlike an ordinary RICO victim, in this case the allegedly
injured plaintiffs, i.e., the players, can avoid any injury
simply by walking away from the alleged wr ongdoers, the
casinos, by not playing blackjack in casinos. In fact, that is
what the casinos apparently want them to do, at least as
long as they count cards. While this abstention would
deprive them of the opportunity to enrich themselves at the
casinos' expense, surely it would be difficult to characterize
that lost speculative opportunity as an injury to"business
or property." If the appellants have played blackjack in the
past, aware of the casinos' countermeasur es, and if they
continue to play blackjack in the future in the hope of
profiting by counting cards, they have suffered and will
suffer self-inflicted wounds. Accordingly, at least with
respect to individual players who are awar e of the casinos'
countermeasures, it is difficult to consider this case within
a RICO formulation.6
_________________________________________________________________
6. In their brief, the casinos assert as an alter native ground for
affirmance that the statute of limitations has run as to some of the
appellants' claims. See br. at 14 & n.5. Appellants respond that they
have alleged continuing violations that render their claims timely.
See
reply br. at 9. Appellants seem to overlook, however, that the
corporate
plaintiffs all ceased operations by 1992. See app. at 930-32. In the
circumstances, inasmuch as appellants instituted this action in 1997,
the corporate appellants' federal RICO claims ar e barred by the
four-year
RICO statute of limitations. See Forbes v. Eagleson, No. 99-1803, ___
F.3d. ___, 2000 WL 1529852, at 10 (3d Cir. Oct. 17, 2000).
23
B. Leave to Amend
The appellants originally pleaded a cause of action under
the New Jersey Consumer Fraud Act, but omitted that
claim in their amended complaint. In the district court, and
here, they have asked permission to amend their complaint
to reinclude the Consumer Fraud Act claim. The district
court denied appellants leave to amend because it found
that the Consumer Fraud Act claim was completely without
merit and it would be futile to amend the complaint to
include a meritless claim. See Doug Grant, 3 F. Supp.2d at
536-37.
As noted by the district court, the New Jersey Supr eme
Court recently has held that the Consumer Fraud Act does
not apply to a heavily regulated industry to the extent that
application of the statute would create a "r eal possibility" of
conflict between the Consumer Fraud Act, as administered
by the Division of Consumer Affairs, and the r egulatory
schemes of other administrative bodies. See Lemelledo v.
Beneficial Mgmt. Corp. of Am., 696 A.2d 546, 553 (N.J.
1997). Thus, the Consumer Fraud Act is inapplicable where
"the other source or sources of r egulation deal specifically,
concretely, and pervasively with the particular activity,
implying a legislative intent not to subject parties to
multiple regulations that, as applied, will work at cross-
purposes." Id. at 554.
Certainly the Casino Control Act evidences the New
Jersey legislature's intent to vest in the CCC exclusive
control of the regulation of casino gaming, including the
content of related advertising. See N.J. Stat. Ann. S 5:12-
133b (West 1996); id. S 5:12-70(o); see also Greate Bay
Hotel & Casino v. Tose, 34 F.3d 1227, 1232-33 (3d Cir.
1994). If we allowed claims such as the appellants'
proposed consumer fraud claim to proceed in the district
court, we would interfere with the CCC's regulatory
scheme. The regulation of the game of blackjack, including
shuffling-at-will and the advertisement regulations, is
within the exclusive jurisdiction of the CCC. Mor eover, the
CCC has particularized expertise in these matters not
possessed by courts and juries. While it is true that the
Supreme Court of New Jersey in Campione, approving our
opinion in Tose, see 714 A.2d at 307-08, held that the
24
courts were not ousted of jurisdiction over common law
damage claims against casinos merely because the claims
arose from gambling transactions, this holding does not
inform our result here on the very different question of the
applicability of a different regulatory act to casino
operations with respect to running blackjack games. Thus,
the district court properly denied appellants' motion for
leave to amend for, as a matter of law, the amended
complaint would not have stated a claim on which r elief
could be granted. See Smith v. National Collegiate Athletic
Ass'n, 139 F.3d 180, 190 (3d Cir. 1999), vacated on other
grounds, 525 U.S. 459, 119 S.Ct. 924 (1999).
In reaching our result on this point, we emphasize that
the goals of the Consumer Fraud and the Casino Contr ol
Acts are not entirely consistent. The Consumer Fraud Act
is concerned with the protection of consumers. The Casino
Control Act, however, has dual purposes that must be
balanced -- the protection of gambling patr ons and the
protection of the financial viability of the casino industry.
N.J. Stat. Ann. S 5:12-1b (12) (West 1996). Thus, the Casino
Control Act presupposes that the consumers as a group,
i.e., the players, will lose their money, a contemplated
result that hardly is the object of the Consumer Fraud Act.
C. Dismissal Against John Does with Prejudice
The sixth count of the complaint alleges various state
and federal statutory claims against John Does for sending
offensive messages and alleged threats over the Internet.
But while the appellants in the complaint sought r elief
against the casino appellees for these acts, see app. at 104,
they failed to offer any link between the John Does and the
casinos. Thus, the district court properly dismissed this
aspect of the complaint, though it did so with pr ejudice. We
conclude, however, that the dismissal should have been
without prejudice, allowing appellants to bring a claim at a
later time if they uncover sufficient facts to per mit them to
plead facts supporting a conclusion that the casinos were
responsible for these acts. Accordingly, we will vacate the
order dismissing the sixth count with pr ejudice to the
extent that it included claims relating to the sending of the
offensive messages and threats over the Internet, and with
respect to that aspect of the order will r emand the matter
25
to the district court to modify the order so that it dismisses
the count without prejudice.
D. Constitutional and Civil Rights Claims
Appellants' sixth count also alleges violations of the
Equal Protection Clause, the Due Process Clause, Article 1,
paragraph 1 of the New Jersey Constitution, and 42 U.S.C.
S 1983. As the district court correctly noted, this count fails
to state a claim upon which relief can be granted for several
reasons. First, appellants' allegations of state action are
insufficient. State regulation and the CCC's authorization of
casino activities do not transform the casinos into state
actors. See Uston v. Hilton Hotels Corp., 448 F. Supp. 116,
118 (D. Nev. 1978); State v. Sanders, 448 A.2d 481, 486
(N.J. Super. Ct. App. Div. 1982) (sear ch by casino
employees does not constitute state action). It is well
established that "[m]ere approval of or acquiescence in the
initiatives of a private party is not sufficient to justify
holding the State responsible for those initiatives under the
terms of the Fourteenth Amendment." Blum v. Yaretsky,
457 U.S. 991, 1004-05, 102 S.Ct. 2777, 2786 (1982);
Jackson v. Metropolitan Edison Co., 419 U.S. 345, 350-51,
95 S.Ct. 449, 453-54 (1974). Second, appellants have not
suffered any equal protection clause violation inasmuch as
under the rational basis test applicable for a non-protected
class such as card-counters subject to CCC r egulations,
see Bally Mfg. Corp. v. New Jersey Casino Contr ol Comm'n,
426 A.2d 1000, 1005 (N.J.) (casino regulations examined
under rational basis test), appeal dismissed, 454 U.S. 804,
102 S.Ct. 77 (1981), the countermeasur es used by the
casinos and authorized by the CCC are rationally related to
the legitimate state interest in protecting the financial
viability of the casino industry. See N.J. Stat. Ann. S 5:12-
1b(12). Third, we are satisfied that the appellants do not
have a constitutionally protected property interest in the
opportunity to gamble and thus the activities of which they
complain do not violate their due process rights. Therefore,
the district court properly dismissed the constitutional and
civil rights claims in the sixth count of the complaint for
failure to state a claim upon which relief can be granted.7
_________________________________________________________________
7. We hasten to add that we do not suggest that our holding means that
the casinos have carte blanche in dealing with their patrons and they
do
not suggest otherwise. For example, both federal and state
discrimination laws would be implicated if casinos discriminated among
their patrons on the basis of their inclusion in protected groups.
26
V. CONCLUSION
We have carefully considered all of appellants'
arguments, including those that we may not have
addressed specifically, and have concluded that the district
court properly dismissed this action with pr ejudice with
respect to the counts of the complaint that it addressed,
except that it should have dismissed count six without
prejudice to the extent that the count r elated to sending
offensive messages and threats over the Internet.8
Consequently, we will modify the order of dismissal to
provide that count six partially is dismissed without
prejudice, and we otherwise will affir m the order of
dismissal with prejudice, and will affir m the order
remanding the remaining aspects of the complaint to the
Superior Court of New Jersey. We will r emand the case to
the district court to enter an order consistent with this
opinion. Costs on this appeal will be taxed against
appellants.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
_________________________________________________________________
8. Immediately before oral argument on this appeal, appellants filed a
motion requesting "an evidentiary hearing on possible conflicts of
interest of the district court" because of what appellants said were
their
"serious concerns" that the court "may have undisclosed conflicts of
interest or financial interests." W e have considered this application
carefully and will deny the motion as we find it to be without merit.
In
any event, the appellants' "serious concer ns" are quite immaterial,
as we
have exercised plenary review on all the issues on this appeal so that
it
would not matter if the appellants' concerns were justified. While we
recognize that we review the denial of a motion for leave to amend on
an
abuse of discretion basis, here we ar e upholding the denial on the
legal
basis that the proposed amendment would not survive a motion to
dismiss under Rule 12(b)(6). See Smith, 139 F.3d at 190. Thus, we have
not deferred to the district court on any issue on which we have
passed.
27
Nevertheless, in this r egard we do make the
following observation which demonstrates why this action,
which has generated a large recor d and required a
considerable expenditure of time and no doubt money is, at
bottom, at least with respect to the claims we have
considered, a fatuity.
CLOSE QUOTES
--- pg 22 of this this document
---Mac, the Medic
Filed November 2, 2000
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 98-5291
DOUG GRANT, INC., RICHARD ANDERSEN, JUDY L.
BINTLIFF, LYNN V. BOHSEN, THOMAS M. BOLICK,
MICHAEL BONN, ROLAND BRYANT, SR., EUGENE
CLAUSER, ELMER CONOVER, SCOTT CONOVER,
JOSEPH CURRAN, DINO D'ANDREA, MARK F. D'ANDREA,
WARREN DAVENPORT, FRANK DELIA, KAREN DWYER,
DENNIS F. FOREMAN, ROSEMARIE FRANCIS, STEPHEN
FREEL, STAVROS GEORGIOU, KENNETH GROSS, ADIB
HANNAH, G. HASSAN HATTINA, LEROY N. JORDAN,
ROMAN KERN, RICHARD H. KESSEL, SCOTT KLEE,
JEFFREY S. KRAH, KATHLEEN E. LANE-BOURGEOIS,
THOMAS J. LOTITO, JR., JAMES MACELROY, MAR TIN
MALTER, STANLEY P. MCANALL Y, ANNE T.
MCGOWAN-NOVAK, EUGENE L. MISERENDINO, DANIEL
G. NAUROTH, MATTHEW S. PELLENBERG, DANIEL
PILONE, STEPHEN F. PINCIOTTI, ROBERT E. PROUT,
MARTIN ROSE, LYNN RUFO, VINCENT SALEK, ARLEN
SCHWERIN, JOSEPH SCIOSCIA, WILLIAM F. STRAUSS,
DOUGLAS G. TELMAN, AINO TOMSON, ANTS TOMSON,
THOMAS TOMSON, LINWOOD C. UPHOUSE, DOLORES
VALANCY, ANDREW R. VARDZAL, JR., GRANT DOUGLAS
VON REIMAN, KENNETH J. WARNER, STEVEN W ATTERS,
PAUL V. YANNESSA, DOUG GRANT COLLEGE OF
WINNING BLACKJACK, INC., SIGMA RESEARCH, INC.,
BETA MANAGEMENT, INC., FA VORABLE SITUATIONS
ONLY INC., t/a DOUG GRANT INSTITUTE OF WINNING
BLACKJACK, JAN C. MUSZYNSKI, LINDA TOMPSON,
Appellants
v.
GREATE BAY CASINO CORPORATION, GREA TE BAY
HOTEL AND CASINO t/a SANDS HOTEL AND CASINO,
SANDS HOTEL AND CASINO, HILTON HOTELS
CORPORATION, GNOC CORP. t/a "A TLANTIC CITY
HILTON," ATLANTIC CITY HILTON, BALLY'S PARK PLACE,
INC. t/a "BALLY'S PARK PLACE," BALLY'S PARK PLACE,
ITT CORPORATION, ITT CORPORATION NV , CAESAR'S
WORLD, INC. a/k/a "CAESAR'S ATLANTIC CITY ,"
CAESAR'S WORLD, CLARIDGE HOTEL & CASINO CORP .,
CLARIDGE AT PARK PLACE, INC., HARRAH'S
ENTERTAINMENT, INC., MARINA ASSOCIATES d/b/a
"HARRAH'S CASINO HOTEL", HARRAH'S CASINO HOTEL,
SUN INTERNATIONAL NORTH AMERICA INC., SUN
INTERNATIONAL HOTELS LTD., RESORTS
INTERNATIONAL HOTEL, INC., RESORTS CASINO
HOTEL, SHOWBOAT, INC., SHOWBOAT , AZTAR
CORPORATION, ADAMAR OF NEW JERSEY, INC.,
(formerly Trop World Casino and Entertainment Resort)
t/a TROPICANA CASINO AND RESORT, TROPICANA
CASINO AND RESORT, TRUMP HOTELS & CASINO
RESORTS, INC., TRUMP HOTELS & CASINO RESOR TS
HOLDINGS, L. P., TRUMP ATLANTIC CITY A SSOCIATES,
TRUMP PLAZA ASSOCIATES, L. P., TRUMP P LAZA
ASSOCIATES, TRUMP PLAZA HOTEL AND CASINO,
TRUMP TAJ MAHAL ASSOCIATES, TRUMP T AJ MAHAL
CASINO RESORT, THE TRUMP ORGANIZA TION, INC.,
TRUMP'S CASTLE ASSOCIATES, L. P., TRUM P CASTLE
ASSOCIATES, TRUMP MARINA CASINO HOTEL RESOR T,
formerly Trump's Castle Casino Resort, JOHN DOES
1-100, GRIFFIN INVESTIGATIONS, INTERNATIONAL
CASINO SURVEILLANCE NETWORK, L. P.,
SURVEILLANCE INFORMATION NETWORK, JOHN DOES
101-200, F. MICHAEL DAILY, ESQ., QUINLAN, DUNNE,
DAILY & HIGGINS, ELLEN BARNEY BALINT, MERANZE &
KATZ, CAPLAN & LUBER, LLOYD S. MARKIND, ESQ.,
RICHARD L. CAPLAN, ESQ., SHARON MORGAN, ESQ.,
MICHELE DAVIS, ESQ.
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civ. No. 97-04291)
District Judge: Honorable Joseph E. Irenas
Argued October 5, 2000
BEFORE: NYGAARD, GREENBERG and COWEN,
Circuit Judges
2
(Filed: November 2, 2000)
Howard A. Altschuler (argued)
66 Saltonstall Parkway
East Haven, CT 06512
Attorney for Appellants
Frederick H. Kraus
Sands Hotel & Casino
Indiana Avenue & Brighton Park
Atlantic City, NJ 08401
Attorney for Appellees
Greate Bay Casino, Greate
Bay Hotel and Sands Hotel
and Casino
Adam N. Saravay (argued)
Tompkins, McGuire,
Wachenfeld & Barry, LLP
4 Gateway Center
Newark, NJ 07102
Attorneys for the Trump Casino
Appellees and Co-Counsel for the
Remaining Casino Appellees and
Griffin Investigations
John M. Donnelly (argued)
Levine, Staller, Sklar, Chan,
Brodsky, & Donnelly, P.A.
3030 Atlantic Ave.
Atlantic City, NJ 08401
Attorneys for Casino Appellees
(other than the Trump Casino
Defendants) and Griffin
Investigations
3
OPINION OF THE COURT
GREENBERG, Circuit Judge.
I. INTRODUCTION
This matter comes on before this court on appeal from an
order entered on May 1, 1998, partially dismissing this
action pursuant to Fed. R. Civ. P. 12(b)(6) for failure to
state a claim on which relief can be granted. 1 See Doug
Grant, Inc. v. Greate Bay Casino Corp., 3 F. Supp.2d 518
(D.N.J. 1998). The appellants had instituted this action in
the Superior Court of New Jersey but the appellees r emoved
it to the district court. Consequently, when the district
court entered the Rule 12(b)(6) order it r emanded
appellants' state-law claims that it did not addr ess to the
Superior Court. In view of the procedural posture of this
case, we treat the allegations of fact in the complaint as
true, and consider them in a light most favorable to the
appellants.2
The individual appellants are blackjack players who have
frequented Atlantic City casinos operated by the casino
appellees. Of the 60 individual appellants, all but six have
developed card-counting skills for playing blackjack
enabling them to reduce or eliminate the nor mal odds in
_________________________________________________________________
1. In our extensive Introduction and at other places in our opinion,
we
essentially have tracked the district court's compr ehensive opinion.
We
also note that the Supreme Court of New Jersey in Campione v. Adamar
of N. J., Inc., 714 A.2d 299, 301, 305-06 (N.J. 1998), discussed the
countermeasures the New Jersey Casino Control Commission has
allowed the casinos to take against card-counters. Of course, the
casinos' use of these countermeasures is at the heart of this case.
2. Inasmuch as the complaint references and relies on the content of
certain documents, we consider them on this appeal. See Churchill v.
Star Enter., 183 F.3d 184, 190 n.5 (3d Cir. 1999); Rose v. Bartle, 871
F.2d 331, 339 n.3 (3d Cir. 1989). Indeed, this case is unusual as the
appendix consists of four volumes and thus is of a length which might
be expected on an appeal from a summary judgment rather than on
appeal from a motion to dismiss.
4
favor of the casinos and, indeed, to turn the odds in their
favor. The corporate appellants are associated with
appellant Doug Grant, Inc., a New Jersey corporation,
whose predecessor corporations operated car d-counting
schools and mock casinos established by the appellant,
Doug Grant, a renowned card-counter . Doug Grant, Inc.
also provided the training for several cooperative player
groups, including many of the appellants her e, who pooled
their financial resources and agr eed to share their
blackjack winnings.
A. The Play of Blackjack, Card-Counting and Shuffling-
At-Will and Other Countermeasur es
The gravamen of appellants' complaint is that the casinos
have taken countermeasures that the appellants regard as
illegal to eliminate the advantage that a skilled card-
counter may have over them in playing blackjack, the one
casino game in which a player's skill may incr ease his
chance of winning to the point of eliminating the winning
odds in favor of the "house." See Campione v. Adamar of N.
J., Inc., 714 A.2d 299, 301 (N.J. 1998). Car d-counters use
intellect and memory to identify the time during the course
of play when a player's odds of winning are better or worse.
Thus, the individual appellants allege that the casinos have
impaired their ability to win money from the casinos in
blackjack. The corporate appellants allege that their schools
and mock casinos were forced to close as a result of the
casinos' countermeasures against car d-counters, and
because of bomb threats, break-ins, destruction of
property, theft of student lists, stalking and other
intimidation tactics.
It is necessary for us partially to describe how blackjack
games are run in order to put appellants' allegations in
context. Blackjack is played with decks containing 52 cards
of four suits (hearts, diamonds, clubs and spades) with
each suit containing 13 cards (Ace, King, Queen, Jack, 10,
9, 8, 7, 6, 5, 4, 3, 2). See N.J.A.C. S 19:46-1.17. Before a
blackjack game starts, the dealer receives one or more,
usually between six to eight, card decks fr om a casino
supervisor and inspects them in the presence of the
floorperson. See id. S 19:47-2.4(a). After inspecting the
cards, the dealer takes them to a blackjack table and
5
spreads them out in a fan, face upward, for visual
inspection by the first player or players to arrive at the
table. See id. S 19:47-2.4(b). After these players are afforded
an opportunity to inspect the cards, the dealer turns them
face downward on the table, mixes them thor oughly, and
shuffles them until they are "randomly intermixed." The
dealer then places the cards into a stack. See id. S 19:47-
2.4(c); id. S 19:47-2.5(a). After the shuffling is completed,
the dealer asks the player seated at a particular position at
the table, as defined by the regulations of the Casino
Control Commission ("CCC"), the casino r egulatory agency,
id. 19:47-2.5(e), to cut the deck. See id. S 19:47-2.5(b). The
player cuts the deck by placing a plastic cutting card in the
stack at least ten cards from either end. See id. S 19:47-
2.5(c).
Once the player has inserted the cutting car d, the dealer
takes all the cards in front of the cutting card and places
them at the back of the stack. See id. S 19:47-2.5(d). The
dealer then takes the entire stack of shuffled cards and
cuts and aligns it along the side of the dealing shoe which
has a mark on its side enabling the dealer to insert the
cutting card so that it is in a position "at least
approximately" one-quarter of the way fr om the back of the
stack. See id. S 19:47-2.5(d); id. S 19:46-1.19(d)(4). The
dealer then inserts the stack of cards into the dealing shoe
for commencement of play. See id. S 19:47-2.5(d). The cards
behind the cutting card will not be used during the game.
Once play has commenced the dealer deals the car ds to
the players in a series of hands until the dealer r eaches the
cutting card. When the dealer reaches the cutting card, the
dealer repeats the shuffling process and cutting procedures
described above. See id. S 19:47-2.5(h).
A blackjack player's object is to reach as close as possible
to a total card value of 21 without exceeding that value. A
player exceeding 21 loses regardless of the dealer's
subsequently acquired hand. Persons in the casino
industry and card-counters have come to r ecognize that, in
a player's endeavor to reach a value as close as possible to
21, certain cards are more favorable to the player and
certain cards are more favorable to the dealer. In particular,
appellants assert that the Ace, King, Queen, Jack and Ten
6
are favorable to a player, but the 6, 5, 4, 3, and 2 are
favorable to the dealer and thus to the house. The 7, 8, and
9 are said to be neutral. At any point during the play, the
cards in a shoe can contain more player -favorable cards or
more dealer-favorable cards. When there are more player-
favorable cards, a player's chances of winning are increased
but when there are more dealer -favorable cards, the
dealer's chances of winning are increased. Whether and
when a shoe will turn out to be player - or dealer-favorable
is purely random.
Card-counters attempt to "count cards" to determine
whether and when a shoe is player-favorable. They then
vary their bets, i.e., betting high when the shoe is player-
favorable and low when the shoe is dealer-favorable to
increase their chances of having a winning r ound of play.
Bets are placed before each individual r ound of blackjack,
usually within established minimum and maximum limits
for the table. According to the appellants, successful card-
counting contains several basic elements including the
assignment of a point value to each card, maintaining a
running total of those points during play, betting strategies,
playing strategies, money management, a sufficient
bankroll, and "the intangible ability to consistently apply
these interrelated strategies under fast-paced casino
conditions." See app. at 24.
For maximum advantage, card-counters need to be able
to view, through the rounds of play, as many of the cards
in the shoe as possible. The greater number of cards they
are able to view, the easier it is for them to determine to
whom the remaining cards in the shoe ar e favorable. For
this reason, card-counters prefer that the dealer place the
cutting card toward the end of the shoe, leaving a small
number of cards behind the cutting-card and increasing
the overall number of cards in play. Car d-counters also
prefer to have the entire shoe of car ds played. If the dealer
reshuffles prior to reaching the cutting card, then the card-
counters' opportunity to bet high on a shoe with a
remainder of mostly player-favorable car ds is impaired.
The casinos, on the other hand, prefer to decr ease the
card-counters' opportunity to bet high on a player-favorable
shoe. Therefore, it is in their inter est to decrease the card-
7
counters' chances of determining whether a shoe is player-
favorable by playing with fewer cards in the shoe, i.e.,
placing the cutting card as far from the back of the stack
as permitted by the CCC regulations. It is also in the
casinos' interest to reshuffle prior to reaching the cutting
card when the remaining cards in a shoe are player-
favorable. These practices, however, come at a cost to the
casino as the more often the dealer goes thr ough the
meticulous shuffling process, the shorter the actual time of
play and thus the smaller the casino's profits.
Appellants allege that the casinos maintain car d-counting
teams and/or video and computer surveillance equipment
to identify card-counters and inform the dealers of their
participation in a blackjack game so that the dealers can
take countermeasures against them. Appellants challenge
these practices, claiming they violate the New Jersey
"cheating games" section in the Casino Contr ol Act, N.J.
Stat. Ann. S 5:12-115 (West 1996), which provides that it
shall be unlawful:
Knowingly to deal, conduct, carry on, operate or expose
for play any game or games played with cards . . .
which have in any manner been marked or tamper ed
with, or placed in a condition, or operated in a manner,
the result of which tends to deceive the public or tends
to alter the normal random selection of characteristics
or the normal chance of the game which could
determine or alter the result of the game.
The appellants make several specific allegations to
support their claims. See Doug Grant, 3 F . Supp.2d at 524-
25. First, they argue that the card-counter identifying
process fundamentally is flawed because it tends unfairly to
misidentify non-card-counters as card-counters. They claim
casinos define card-counters as (1) any patr on who
increases a bet during a player-favorable count, or (2) any
patron who knows or is related to someone who has
increased a bet during a player-favorable count. According
to appellants, a player the casino identifies as a card-
counter is "branded for life" and never is able to play a
"fair" game of blackjack without being subjected to
countermeasures. The casinos allegedly share information
about suspected card-counters through defendant Griffin
8
Investigations and other similar agencies. These agencies
allegedly keep dossiers containing the pictur es of suspected
card-counters which casino employees then use to spot
card-counters for the purpose of knowing when to
implement countermeasures.
Second, appellants claim that the casinos utilize what
they term the "cheating-at-will" pr eferential shuffle and
which, as codified by the CCC regulations, generally is
known as the "shuffle-at-will." A dealer r eshuffling prior to
reaching the cut-card marker shuffles-at-will. A casino will
shuffle in this manner when its card-counting team
determines that the shoe is player-favorable at a table
where it suspects card-counters ar e playing. Appellants
allege that the shuffle-at-will provides an extra 2%
advantage to the casino, nearly double its nor mal chance of
winning, and thus providing the casinos with a windfall of
millions of dollars. Id. at 525. They also claim that a casino
can shuffle-at-will abusively to the disadvantage of players
who are not card-counters by shuffling-at-will even when
its employees do not suspect that there is a card-counter
playing at a table. Id.
Appellants recount specific instances in which individual
appellants allegedly were subjected to shuffling-at-will by
specific casinos throughout the past ten years. On some,
but not all, of these occasions, the player r eported the
shuffle-at-will to the CCC and/or the New Jersey
Department of Gaming Enforcement ("DGE") official on-site
at every casino. According to appellants, the casinos never
have responded to such complaints by admitting to
counting cards and shuffling during a player -favorable
count. Id.
Appellants also allege that because they have been
identified as card-counters, they are limited to one wager at
a time, are refused cards, have bets pushed back, and are
forced to bet below the original posted limit at the table. Id.
Moreover, they allege that "shills" associated with the
casinos sometimes occupy all seats at tables at which they
wish to play. Id. The appellants allege that they have been
treated in these adverse ways even though players who are
not card-counters are not so treated.
9
Appellants also claim that the casinos have denied them
hospitality "comps," such as meals, after identifying them
as card-counters. Id. Finally, appellants allege that they
have been threatened, assaulted and stalked because of
their suspected card-counter status. Id. They allege that
they have been threatened in person while at the casinos
by both known and unknown casino employees and that
they have been threatened and sent pornographic materials
over the Internet by unnamed John Does allegedly
connected to the casinos. Id.
B. The Casino Control Act and CCC Regulations
The New Jersey Casino Control Act, N.J. Stat. Ann.
S 5:12-1 et seq. (West 1996) (the "Act"), gives the CCC
comprehensive authority to define and r egulate the rules
and conduct of play for blackjack and other authorized
casino games. See Campione, 714 A.2d at 304; Uston v.
Resorts Int'l Hotel, Inc., 445 A.2d 370, 372-73 (N.J. 1982).
It also grants the CCC "exclusive jurisdiction" over the
interpretation and enforcement of r egulations governing "all
matters delegated to it or within the scope of its powers
under the provisions of [the Act]." N.J. Stat. Ann. S 5:12-
133b; see also id. 5:12-69, 70. That jurisdiction delegates
to the CCC the power to promulgate regulations regarding
the rules of casino games, including blackjack, id. SS 5:12-
69-70f, gambling related advertising, id. S 5:12-70o, and the
enforcement of gaming regulations, including the
investigation, adjudication, and punishment of r egulatory
violations, id. SS 5:12-63b, f, g;id. S 5:12-64; id. S 5:12-129.
The regulations governing blackjack ar e exhaustive and
set forth in great detail the rules for the conduct of the
game. See N.J.A.C. S 19:47-2.1 et seq. Indeed, the New
Jersey Supreme Court has stated that, "t is no
exaggeration to state that the Commission's r egulation of
blackjack is more extensive than the entir e administrative
regulation of many industries." Uston , 445 A.2d 373. The
CCC is very aware of the card-counter controversy. As the
parties have recognized, the CCC carefully has considered
and addressed in its regulatory capacity the effect card-
counters can have on the game and the ways in which
casinos should be permitted to respond to professional
card-counters. See, e.g., 14 N.J. Reg. 467-70 (May 17,
10
1982); 14 N.J. Reg. 559-69 (June 7, 1982); 14 N.J. Reg.
841 (Aug. 2, 1982); 23 N.J. Reg. 1784 (June 3, 1991); 23
N.J. Reg. 2613 (Sept. 3, 1991); 23 N.J. Reg. 3350 (Nov. 4,
1991); 23 N.J. Reg. 3354 (Nov. 4, 1991); 25 N.J. Reg. 3953
(Sept. 7, 1993); 25 N.J. Reg. 5521 (Dec. 6, 1993). The CCC
regulations authorize the casinos to use certain
countermeasures to prevent car d-counters from overcoming
the statistical advantage that is necessary to ensur e the
casinos' financial viability.
The CCC adopted many of its regulations authorizing
countermeasures in response to the New Jersey Supreme
Court's ruling in Uston, 445 A.2d 370, a case considering
whether casinos have the authority to exclude car d-
counters from their premises. The court determined that
casinos were not authorized to exclude car d-counters,
reasoning that the Act gave the CCC exclusive and plenary
authority to set the rules and methods of play of casino
games and that the CCC had not authorized the exclusion
of card-counters as a countermeasur e.3 The court
suggested, however, that if the CCC wanted to approve
measures to neutralize the card-counter threat, it might be
able to exclude card-counters, provided that the regulation
did not violate constitutional or statutory limits. Uston, 445
A.2d at 375-76.
Yet, prior to Uston, the CCC had codified a practice which
the casinos used as a card-counter counter measure even
though the CCC did not promulgate it for that purpose.
This regulation provides that: "[a] casino licensee, in its
discretion" may permit a player to"wager on [more than]
one box at a Blackjack table." N.J.A.C. S 19:47-2.14. The
CCC had been allowing the use of this practice against
card-counters through its approval of casinos' internal
control pursuant to N.J. Stat. Ann. S 5:12-99. The rule
specifically grants casinos discretion to allow players
(usually non-card-counters) to bet on mor e than one box,
and presumably, in light of the discretionary language,
allows them to preclude card-counters fr om betting on
more than one box.
_________________________________________________________________
3. It appears that prior to Uston the casinos on at least some
occasions
excluded card-counters and did so with "overwhelming force." See State
v. Sanders, 448 A.2d 481, 485 (N.J. Super . Ct. App. Div. 1982).
11
After Uston, the CCC held a series of hearings on the
issue of card-counters and decided to enact r egulations
authorizing the casinos to use certain measur es to
neutralize the potential negative effect car d-counters could
have on their financial viability. See Campione, 714 A.2d at
305. The new regulations, which the New Jersey Supreme
Court urged the CCC to consider in lieu of allowing the
casinos to exclude card-counters, balanced the statutory
goals of casino viability and fair odds to all players. See
N.J. Stat. Ann. S 5:12-100e. The CCC intended the
regulations to ensure both the fair ness and integrity of
casino gambling and "the right of the casinos to have the
rules drawn so as to allow some reasonable pr ofit." Uston,
445 A.2d at 376; see also 14 N.J. Reg. 560-61 (June 7,
1982); 23 N.J. Reg. 1784 (June 3, 1991).
Several of these countermeasures involved the manner by
which casinos could shuffle the blackjack car ds. The first
approved shuffling method is known as the"Bart Carter
Shuffle," a "shuffling procedur e in which approximately one
deck of cards is shuffled after being dealt, segregated into
separate stacks and each stack is inserted into pr emarked
locations within the remaining decks contained in the
dealing shoe." N.J.A.C. S 19:47-2.1; see also 14 N.J. Reg.
559 (June 7, 1982); 14 N.J. Reg. 841 (Aug. 2, 1982). The
CCC also approved the "shuffle-at-will," which we have
described above, to allow the casinos to shuffle after any
round of play. To implement this appr oval, the CCC
amended the existing shuffle regulation by adding language
regarding the casinos' authority to shuffle "after each round
of play":
(a) Immediately prior to commencement of play, after
any round of play as may be determined by the casino
licensee and after each shoe of cards is dealt, the
dealer shall shuffle the cards so that they are randomly
intermixed.
. . .
(h) A reshuffle of the cards in the shoe shall take
place after the cutting card is reached in the shoe . . .
except that:
12
1. The casino licensee may determine aft er each
round of play that the cards should be r eshuffled;
2. When the `Bart Carter Shuffle' is util ized a
reshuffle shall take place after the car ds in the discard
rack exceed approximately one deck in number .
N.J.A.C. S 19:47-2.5; see 14 N.J. Reg. 559 (June 7, 1982),
14 N.J. Reg. 841 (Aug. 2, 1982).
The CCC also has approved the use of a device known as
the continuous shuffling shoe. In place of the dealing and
shuffling requirements set forth in N.J.A.C. 19:47-2.5 and
2.6, a casino licensee may utilize a dealing shoe or other
device designed to reshuffle the cards automatically,
provided that the CCC or its authorized designatee has
approved such shoe or device and the pr ocedures for
dealing and shuffling the cards through the use of this
device. See N.J.A.C. S 19:47-2.21; see also 14 N.J. Reg. 559
(June 7, 1982), 14 N.J. Reg. 841 (Aug. 2, 1982).
The shuffling regulations, particularly the most
commonly used shuffle-at-will, have enabled the casinos to
lessen the card-counters' ability to deter mine whether cards
remaining in the shoe are player-favorable. As we already
have noted, when the cards are reshuffled continuously or
prior to the dealer reaching the cutting-car d in the shoe,
card-counters lose their potential advantage over the
casinos because they no longer can increase their bets,
secure in the knowledge that their chance of r eceiving
player-favorable cards has been incr eased.
The CCC also authorized one non-shuffling
countermeasure after the Uston decision--an increase in
the number of decks casinos are allowed to use in
blackjack play. See N.J.A.C. S 19:47-2.2. This change
helped the casinos combat card-counters by incr easing the
number of cards card-counters would need to track to
determine whether a shoe was player-favorable. Plainly, the
more cards in the shoe, the more difficult a player's task is
to keep track of the cards.
After the CCC authorized these initial counter measures,
in 1991 it approved another regulation which provides that:
13
[A] casino licensee may at any time change the
permissible minimum or maximum wager at a table
game, without notifying the Commission of such
change, upon posting a sign at the gaming table
advising patrons of the new permissible minimum or
maximum wager and announcing the change to
patrons who are at the table.
N.J.A.C. S 19:47-8.3(c); see also 23 N.J. Reg. 1784 (June 3,
1991); 23 N.J. Reg. 2613 (Sept. 3, 1991); 23 N.J. Reg. 3350
(Nov. 4, 1991); 23 N.J. Reg. 3354 (Nov. 4, 1991). This
regulation gives the casinos the authority to lower the
betting limit whenever it identifies a car d-counter so that
the card-counter will not be able to bet high when the shoe
becomes player-favorable. Then, in 1993, the CCC made a
further addition to its regulations which, as further
amended in 1999, provides:
(b) A casino licensee may offer:
1. Different maximum wagers at one gaming table for
each permissible wager in an authorized game; and
2. Different maximum wagers at dif ferent gaming
tables for each permissible wager in an authorized
game.
(c) A casino licensee shall provide notice of the
minimum and maximum wagers in effect at each
gaming table, and any changes thereto, in accor dance
with N.J.A.C. 19:47-8.3.
(d) Notwithstanding (c) above, a casino licensee may, in
its discretion, permit a player to wager below the
established minimum wager or above the established
maximum wager at a gaming table.
(e) Any wager accepted by a dealer which is in excess
of the established maximum permitted wager at that
gaming table shall be paid or lost in its entir ety in
accordance with the rules of the game, notwithstanding
that the wager exceeded the current table maximum or
was lower than the current table maximum.
N.J.A.C. 19:47-8.2(b) to (e); see 25 N.J. Reg. 3953 (Sept. 7,
1993); 25 N.J. Reg. 5521 (Dec. 6, 1993). This r egulation
14
clarified that the casinos could limit specifically the wagers
of only those patrons identified as car d-counters, while
permitting non-card-counters to continue betting at higher
limits.
The New Jersey courts seem not to doubt the legality of
the CCC-authorized countermeasures. In particular, the
trial court in Campione recognized that the practice of
"shuffling at will," the central concer n in this case identified
by the district court, is authorized by CCC r egulation, see
N.J.A.C. S 19:47-2.5, and affects all patrons, even those not
counting cards, at a blackjack table. See Campione v.
Adamar of N. J., Inc., 643 A.2d 42, 50-51 (N.J. Super. Ct.
Law Div. 1993), rev'd on other gr ounds, 694 A.2d 1045 (N.J.
Super. Ct. App. Div. 1997), mod. and af f 'd, 714 A.2d 299
(N.J. 1998). Further, on appeal in Campione, the New
Jersey Superior Court, Appellate Division, found that the
CCC "authorizes the disparate treatment of card-counters."
694 A.2d at 1050. The court noted that the CCC has
approved the countermeasures allowing for betting limits
and permitting casinos to vary the number of boxes in
which particular players can wager. Id. at 1047. Finally, the
New Jersey Supreme Court in Campione, while not
expressly upholding the countermeasur es the CCC has
allowed, implicitly made it clear the CCC lawfully may
permit such countermeasures. 714 A.2d at 305, 308.
II. JURISDICTION
The complaint in this action alleged violations of the
United States Constitution, 42 U.S.C. S 1983, and the
federal RICO statute, as well as causes of action under the
New Jersey RICO statute, constitution and common law.
Thus, the district court had jurisdiction under 28 U.S.C.
SS 1441, 1331, and 1367. We have jurisdiction pursuant to
28 U.S.C. S 1291.
III. STANDARD OF REVIEW
Our review of a district court's order of dismissal of a
complaint pursuant to Rule 12(b)(6) for failur e to state a
claim upon which relief may be granted, is plenary and we
apply the same test as the district court. See Maio v. Aetna,
15
Inc., 221 F.3d 472, 481 (3d Cir. 2000). Thus, "[a] motion to
dismiss pursuant to Rule 12(b)(6) may be granted only if,
accepting all well-pleaded allegations in the complaint as
true, and viewing them in the light most favorable to
plaintiff, plaintiff is not entitled to relief." Id. at 481-82.
However, while our standard of r eview requires us to accept
as true all factual allegations in the complaint,"we need
not accept as true `unsupported conclusions and
unwarranted inferences.' " City of Pittsburgh v. West Penn
Power Co., 147 F.3d 256, 263 n.13 (3d Cir . 1998) (quoting
Schuylkill Energy Res., Inc. v. Pennsylvania Power & Light
Co., 113 F.3d 405, 417 (3d Cir. 1997)). "[C]ourts have an
obligation in matters before them to view the complaint as
a whole and to base rulings not upon the presence of mere
words but, rather, upon the presence of a factual situation
which is or is not justiciable. We do draw on the allegations
of the complaint, but in a realistic, rather than a slavish,
manner." Id. at 263.
IV. DISCUSSION
A. RICO Claims
Appellants' first count alleges claims for racketeering
under federal RICO, 18 U.S.C. S 1964(c), New Jersey RICO,
N.J. Stat. Ann. S 2C:41-4c (West 1995), and the RICO
provisions of the Act, N.J. Stat. Ann. S 5:12-127c (West
1996). As appellees point out, the predicate acts of alleged
racketeering on which appellants' base their RICO claims
consist almost exclusively of the use of counter measures or
alleged violations of other CCC regulations. In order to
make out a RICO claim, appellants first must show that the
casinos committed the predicate criminal acts enumerated
by RICO. See, e.g., 18 U.S.C. SS 1961, 1962. Appellants
claim that the casinos committed the following pr edicate
acts: shuffling-at-will when the count was player -favorable,
using computer and video technology to assist in counting
cards and identifying card-counters, denying comps to
appellants, using shills, limiting plaintiffs to one hand of
blackjack at a time, lowering betting limits, and failing to
disclose the use and nature of the disputed
countermeasures. See br. 30-41; Doug Grant, 3 F. Supp.2d
at 531-32. Based on the premise that these uses of
16
authorized countermeasures and other alleged regulatory
violations are criminal acts, appellants' complaint alleges
that the casinos' operation of blackjack violates criminal
statutes regarding unlawful debt collection, transmission of
gambling information, operation of illegal gambling
business, and interstate commerce for an unlawful activity.
The district court believed that the primary purported
predicate act on which appellants relied is the shuffling of
cards when the count is favorable to the players.4 The
complaint alleges that use of the "shuffling-at-will"
countermeasure constitutes a predicate act of racketeering
because it violates the criminal casino "cheating" statute,
N.J. Stat. Ann. S 5:12-115. The trial court in Campione
rejected this precise claim. Campione , 643 A.2d at 51
("labeling of the shuffling at will as `cheating' is specious").
Moreover, despite appellants' pr otestations, the regulation
itself makes clear that a casino at its discr etion may shuffle
at the conclusion of any round of play:
(a) Immediately prior to commencement of play, after
any round of play as may be determined by the casino
licensee and after each shoe of cards is dealt, the
dealer shall shuffle the cards so that they are randomly
intermixed.
. . .
(h) A reshuffle of the cards in the shoe shall take place
after the cutting card is reached in the shoe as
provided in N.J.A.C. 19:47-2.6(1) except that:
1. The casino licensee may determine after each
round of play that the cards shall be r eshuffled.
_________________________________________________________________
4. In their brief, the appellants contend that the district court was
incorrect in this characterization, as their"central concern is the
deceptive, unadvertised and clandestine use of countermeasures only
when the cards favor players." See br. at 31. We will not linger on
this
point for two reasons. First, the casinos take their countermeasures
quite openly. For example, it should be appar ent to anyone at a table
when the dealer shuffles before the cutting card is reached. Second,
it
seems clear that, as the district court recognized, the principal
countermeasure is shuffling-at-will.
17
N.J.A.C. S 19:47-2.5(a), (h).
Appellants attempt at length to skew the plain meaning
of this regulation and the relevant r egulatory history
leading to its adoption to convince us that the CCC has
authorized only a "random shuffle-at-will," i.e., not a
reshuffle that occurs only during player favorable counts.
See br. at 33. Appellants' restrictive interpretation of the
shuffle-at-will regulation, however, runs contrary to its
express language.
The regulatory history makes clear that the CCC is fully
aware of and allows the practice of shuffling-at-will when
there is a player-favorable count as a countermeasure
against card-counters. When the CCC published the
proposed regulation to allow the casinos to shuffle-at-will,
it noted that the casinos might shuffle when the count is
favorable and that this practice might affect the odds of the
game:
The economic impact of this proposed amendment
would vary depending on when in fact the car ds were
shuffled. For example, if the cards wer e always shuffled
after the first round of play regar dless of the point
count, then the casino advantage against the basic
strategy player and average player would probably
remain the same with the advantage enjoyed by the
card counter being decreased. If the car ds, however,
were only shuffled in positive point count situations
and not in negative point count situations, the casino
advantage against all types of players would incr ease.
14 N.J. Reg. 470 (May 17, 1982).
Appellants appear to take issue with the propriety of the
shuffle-at-will regulation. But even assuming that in this
action we should entertain a challenge to the r egulation, we
perceive nothing illegal in it.5 In any event, even if the
_________________________________________________________________
5. There have been numerous state administrative and judicial
proceedings regarding the issues before us but it is difficult from
the
parties' briefs and appendix to discern their exact status. In any
event,
we do not find any state determination inconsistent with the result we
reach. Significantly, the parties are in agreement that shortly after
18
regulation is an improper exercise of the CCC's authority,
a conclusion that we reject, a casino following it before its
invalidation hardly could be subject to RICO liability for
that conduct. In our view, a casino does not commit a
predicate RICO act when it engages in conduct the CCC
expressly permits.
We are disturbed that appellants have couched their
arguments in dramatic hyperbole obfuscating the real
issues. Indeed, we are satisfied that the appellants have
mischaracterized the facts. For instance, appellants
characterize the use of the shuffle-at-will as"secretly
removing cards from a blackjack game in progress." See br.
at 30. But the reshuffle is hardly secr et as the dealer does
it openly in the view of the players. Moreover , a dealer
reshuffling does not remove cards from the deck. Rather,
the reshuffle simply places the cards in a different random
order for the next hands.
Appellants further allege that the shuffle-at-will is a RICO
criminal predicate act because it has a tendency to alter the
normal random chance of the game. See br. at 32-39. What
appellants fail to realize, however, is that the normal
random chance of the game is defined pursuant to the
statutory rules and CCC regulations. As the CCC has
explained:
[T]he normal chance and random character of any
casino game is necessarily defined and deter mined by
the rules governing the conduct of the game. Since the
Commission has the statutory authority to initially
establish the rules of the game, N.J.S.A. S 5:12-100e
_________________________________________________________________
appellants filed this action, the individual appellants "filed a
petition
with the CCC with claims identical to those raised in the federal
complaint." See appellants' br. at 4; appellees' br. at 5-6. In
addition, the
individual appellants later filed a declaratory petition with the CCC
seeking its "interpretive ruling on pr ovisions of the Act, blackjack
regulations and casino practices that ar e at issue in this appeal."
See
appellants' br. at 6; appellees' br. at 6. Apparently, appellants were
not
satisfied with the outcome of the declaratory petition, see 31 N.J.
Reg.
555 (Feb. 16, 1999), as they have appealed fr om the determination to
the
New Jersey Superior Court, Appellate Division.
19
and 70f, and primary jurisdiction to resolve any issues
concerning interpretation of the Act and the rules
promulgated thereunder, . . . it is absurd to allege that
practices approved by the Commission as being
consistent with its rules constitute `cheating' under
section 115 of the Act.
31 N.J. Reg. 556 (Feb. 16, 1999). While appellants may
wish to have the CCC rethink the scope of the shuffle-at-
will regulation, we are satisfied that after being stripped of
its conclusory legal dressing, there is no allegation in the
complaint regarding reshuffling sufficient to support a
RICO claim against the casino defendants.
Appellants' other alleged predicate acts ar e similarly
insufficient to support a RICO claim. The alleged violations
of criminal statutes regarding unlawful debt collection, 18
U.S.C. S 1962, transmission of gambling infor mation, 18
U.S.C. S 1084, interference with commerce by threats or
violence, 18 U.S.C. S 1951, interstate commer ce for
unlawful activity, 18 U.S.C. S 1952, and operating an illegal
gambling business, 18 U.S.C. S 1955, all derive from the
allegations regarding the use of authorized
countermeasures and other alleged but in fact nonexistent
violations of the CCC regulations. Any debts allegedly
"unlawfully collected" are those lost by players during
blackjack games played in accordance with the CCC
regulations. Any "illegal gambling business" or "unlawful
activity in interstate commerce" is simply the play of
blackjack as authorized by the CCC. Similarly, the casinos
do not engage "in unlawful activity" or "operating an illegal
gambling business" by not offering appellants or anyone
else "comps," which are nothing mor e than free gifts from
the casinos. While appellants claim that the casinos are
obliged to offer "comps," in our view if they fail to do so
they are not committing criminal acts in any way impacting
on the integrity of the blackjack game. If appellants want to
bring a judicial action to recover the value of"comps,"
surely their forum should be a New Jersey state court, at
least in some instances the small claims part. Plainly, the
casinos' activities of which appellants complain do not
constitute crimes and therefore ar e not predicate RICO
acts.
20
Furthermore, appellants, although mentioning the use of
"shills" in their complaint, have not made any allegations
that the casinos violate the statutory prohibition of the use
of "shills," i.e., persons who induce potential patrons to
enter a casino or induce them to play any game. See N.J.
Stat. Ann. S 5:12-1001 (West 1996). Certainly the casinos
have not used shills to encourage appellants to play
blackjack in their premises.
In their brief, appellants further assert that the CCC
stated in an administrative proceeding that it would be
deceptive for casinos actively to solicit a player to count
cards in its casino without letting the player know that
countermeasures will be used against those suspected of
counting cards. See br. at 11, 25. Appellants, however, fail
to cite the full text of the CCC's statement, which
concluded:
[T]he Commission does not believe that any of the
exhibits submitted by the commenters come even close
to supporting an allegation of active solicitation of card
counter play by a casino licensee.
31 N.J. Reg. 556 (Feb. 6, 1999). Thus, appellants' r eference
to the CCC's statement adds nothing to their allegation that
the casinos' use of shills constitutes a RICO act.
Appellants also assert that it is deceptive for the casinos
to fail to provide players with a complete text of the rules
governing the play of blackjack. This allegation also fails to
support a claim for relief. As we set forth above, the rules
and regulations governing blackjack ar e numerous and
thus they do not lend themselves to inclusion in a short
manual. Further, the sample casino br ochure in the
appendix explaining blackjack on its face is not deceptive.
See app. at 832-34. While it does not purport to set forth
all of the blackjack rules, it does give the infor mation
needed by a player to play the game.
The appellants also allege that it is impermissible for the
casinos to require one player's wager to be less than that of
other players at the same table. See br . at 40 (citing N.J.
Stat. Ann. S 5:12-100g (West 1996)). As we mentioned,
however, the CCC has adopted a regulation that specifically
allows casinos to set different wager limits, even among
21
players at the same table, if a player is suspected of card
counting. See N.J.A.C. S 19:47-8.2(b)-(d). As a result, the
casinos cannot be said to have violated the Act in a manner
to support a RICO cause of action. While appellants may
wish to challenge the propriety of the r egulation, they have
not stated a RICO cause of action against the casinos
whose actions are in compliance with the law and the
CCC's regulations.
Appellants next argue that the casinos' failur e to obtain
prior approval for the countermeasur es they implement
constitutes a predicate act. See br . at 40-41. Yet appellants
also recognize that the CCC has determined that the
casinos do not need prior approval to implement the
measures. See id. at 41. While the appellants note that that
ruling is being challenged on appeal, it will be time enough
for a federal court to consider the RICO implications if and
when the CCC determines that the casinos' practices are
illegal and the casinos do not comply prospectively with the
CCC's determinations.
The only alleged predicate acts that ar e not based on
CCC regulations are the allegations of assaults, threats,
and stalking-in-person and via the Internet. Appellants
allege that one appellant was knocked off his seat on one
occasion, that some appellants were followed ar ound
casinos, and that one appellant was grabbed by the arm
while being escorted out of a casino. However , these minor
altercations cannot be regarded as conduct egregious
enough to serve as predicate acts sufficient to support what
appellants apparently believe is massive litigation, in which,
before trebling, they are seeking at least $347,532,800 in
damages. See Doug Grant, 3 F. Supp.2d at 522 n.1. Nor do
the appellants' claims of receiving anonymous
pornographic, offensive and threatening messages over the
Internet from John Doe defendants constitute predicate
acts attributable to the appellees, as appellants put forth
no basis for concluding or even alleging that anyone
associated with the casinos sent the messages. Accor dingly,
we will affirm the order of the district court dismissing the
state and federal RICO causes of action.
For the reasons we have set forth, we have r eached the
conclusion that appellants' allegations that the casinos or
22
any appellee has committed predicate RICO acts are
completely insubstantial and border on the frivolous. In the
circumstances, inasmuch as appellants have failed to allege
any predicate act upon which to base a RICO claim, we
need not determine conclusively whether appellants
properly have pleaded injury to business or pr operty as
required for a RICO damages action. See 18 U.S.C.
S 1964(c); N.J. Stat. Ann. S 2C:41-4c (W est 1995); Maio, 221
F.3d at 483-84. Nevertheless, in this r egard we do make the
following observation which demonstrates why this action,
which has generated a large recor d and required a
considerable expenditure of time and no doubt money is, at
bottom, at least with respect to the claims we have
considered, a fatuity.
Unlike an ordinary RICO victim, in this case the allegedly
injured plaintiffs, i.e., the players, can avoid any injury
simply by walking away from the alleged wr ongdoers, the
casinos, by not playing blackjack in casinos. In fact, that is
what the casinos apparently want them to do, at least as
long as they count cards. While this abstention would
deprive them of the opportunity to enrich themselves at the
casinos' expense, surely it would be difficult to characterize
that lost speculative opportunity as an injury to"business
or property." If the appellants have played blackjack in the
past, aware of the casinos' countermeasur es, and if they
continue to play blackjack in the future in the hope of
profiting by counting cards, they have suffered and will
suffer self-inflicted wounds. Accordingly, at least with
respect to individual players who are awar e of the casinos'
countermeasures, it is difficult to consider this case within
a RICO formulation.6
_________________________________________________________________
6. In their brief, the casinos assert as an alter native ground for
affirmance that the statute of limitations has run as to some of the
appellants' claims. See br. at 14 & n.5. Appellants respond that they
have alleged continuing violations that render their claims timely.
See
reply br. at 9. Appellants seem to overlook, however, that the
corporate
plaintiffs all ceased operations by 1992. See app. at 930-32. In the
circumstances, inasmuch as appellants instituted this action in 1997,
the corporate appellants' federal RICO claims ar e barred by the
four-year
RICO statute of limitations. See Forbes v. Eagleson, No. 99-1803, ___
F.3d. ___, 2000 WL 1529852, at 10 (3d Cir. Oct. 17, 2000).
23
B. Leave to Amend
The appellants originally pleaded a cause of action under
the New Jersey Consumer Fraud Act, but omitted that
claim in their amended complaint. In the district court, and
here, they have asked permission to amend their complaint
to reinclude the Consumer Fraud Act claim. The district
court denied appellants leave to amend because it found
that the Consumer Fraud Act claim was completely without
merit and it would be futile to amend the complaint to
include a meritless claim. See Doug Grant, 3 F. Supp.2d at
536-37.
As noted by the district court, the New Jersey Supr eme
Court recently has held that the Consumer Fraud Act does
not apply to a heavily regulated industry to the extent that
application of the statute would create a "r eal possibility" of
conflict between the Consumer Fraud Act, as administered
by the Division of Consumer Affairs, and the r egulatory
schemes of other administrative bodies. See Lemelledo v.
Beneficial Mgmt. Corp. of Am., 696 A.2d 546, 553 (N.J.
1997). Thus, the Consumer Fraud Act is inapplicable where
"the other source or sources of r egulation deal specifically,
concretely, and pervasively with the particular activity,
implying a legislative intent not to subject parties to
multiple regulations that, as applied, will work at cross-
purposes." Id. at 554.
Certainly the Casino Control Act evidences the New
Jersey legislature's intent to vest in the CCC exclusive
control of the regulation of casino gaming, including the
content of related advertising. See N.J. Stat. Ann. S 5:12-
133b (West 1996); id. S 5:12-70(o); see also Greate Bay
Hotel & Casino v. Tose, 34 F.3d 1227, 1232-33 (3d Cir.
1994). If we allowed claims such as the appellants'
proposed consumer fraud claim to proceed in the district
court, we would interfere with the CCC's regulatory
scheme. The regulation of the game of blackjack, including
shuffling-at-will and the advertisement regulations, is
within the exclusive jurisdiction of the CCC. Mor eover, the
CCC has particularized expertise in these matters not
possessed by courts and juries. While it is true that the
Supreme Court of New Jersey in Campione, approving our
opinion in Tose, see 714 A.2d at 307-08, held that the
24
courts were not ousted of jurisdiction over common law
damage claims against casinos merely because the claims
arose from gambling transactions, this holding does not
inform our result here on the very different question of the
applicability of a different regulatory act to casino
operations with respect to running blackjack games. Thus,
the district court properly denied appellants' motion for
leave to amend for, as a matter of law, the amended
complaint would not have stated a claim on which r elief
could be granted. See Smith v. National Collegiate Athletic
Ass'n, 139 F.3d 180, 190 (3d Cir. 1999), vacated on other
grounds, 525 U.S. 459, 119 S.Ct. 924 (1999).
In reaching our result on this point, we emphasize that
the goals of the Consumer Fraud and the Casino Contr ol
Acts are not entirely consistent. The Consumer Fraud Act
is concerned with the protection of consumers. The Casino
Control Act, however, has dual purposes that must be
balanced -- the protection of gambling patr ons and the
protection of the financial viability of the casino industry.
N.J. Stat. Ann. S 5:12-1b (12) (West 1996). Thus, the Casino
Control Act presupposes that the consumers as a group,
i.e., the players, will lose their money, a contemplated
result that hardly is the object of the Consumer Fraud Act.
C. Dismissal Against John Does with Prejudice
The sixth count of the complaint alleges various state
and federal statutory claims against John Does for sending
offensive messages and alleged threats over the Internet.
But while the appellants in the complaint sought r elief
against the casino appellees for these acts, see app. at 104,
they failed to offer any link between the John Does and the
casinos. Thus, the district court properly dismissed this
aspect of the complaint, though it did so with pr ejudice. We
conclude, however, that the dismissal should have been
without prejudice, allowing appellants to bring a claim at a
later time if they uncover sufficient facts to per mit them to
plead facts supporting a conclusion that the casinos were
responsible for these acts. Accordingly, we will vacate the
order dismissing the sixth count with pr ejudice to the
extent that it included claims relating to the sending of the
offensive messages and threats over the Internet, and with
respect to that aspect of the order will r emand the matter
25
to the district court to modify the order so that it dismisses
the count without prejudice.
D. Constitutional and Civil Rights Claims
Appellants' sixth count also alleges violations of the
Equal Protection Clause, the Due Process Clause, Article 1,
paragraph 1 of the New Jersey Constitution, and 42 U.S.C.
S 1983. As the district court correctly noted, this count fails
to state a claim upon which relief can be granted for several
reasons. First, appellants' allegations of state action are
insufficient. State regulation and the CCC's authorization of
casino activities do not transform the casinos into state
actors. See Uston v. Hilton Hotels Corp., 448 F. Supp. 116,
118 (D. Nev. 1978); State v. Sanders, 448 A.2d 481, 486
(N.J. Super. Ct. App. Div. 1982) (sear ch by casino
employees does not constitute state action). It is well
established that "[m]ere approval of or acquiescence in the
initiatives of a private party is not sufficient to justify
holding the State responsible for those initiatives under the
terms of the Fourteenth Amendment." Blum v. Yaretsky,
457 U.S. 991, 1004-05, 102 S.Ct. 2777, 2786 (1982);
Jackson v. Metropolitan Edison Co., 419 U.S. 345, 350-51,
95 S.Ct. 449, 453-54 (1974). Second, appellants have not
suffered any equal protection clause violation inasmuch as
under the rational basis test applicable for a non-protected
class such as card-counters subject to CCC r egulations,
see Bally Mfg. Corp. v. New Jersey Casino Contr ol Comm'n,
426 A.2d 1000, 1005 (N.J.) (casino regulations examined
under rational basis test), appeal dismissed, 454 U.S. 804,
102 S.Ct. 77 (1981), the countermeasur es used by the
casinos and authorized by the CCC are rationally related to
the legitimate state interest in protecting the financial
viability of the casino industry. See N.J. Stat. Ann. S 5:12-
1b(12). Third, we are satisfied that the appellants do not
have a constitutionally protected property interest in the
opportunity to gamble and thus the activities of which they
complain do not violate their due process rights. Therefore,
the district court properly dismissed the constitutional and
civil rights claims in the sixth count of the complaint for
failure to state a claim upon which relief can be granted.7
_________________________________________________________________
7. We hasten to add that we do not suggest that our holding means that
the casinos have carte blanche in dealing with their patrons and they
do
not suggest otherwise. For example, both federal and state
discrimination laws would be implicated if casinos discriminated among
their patrons on the basis of their inclusion in protected groups.
26
V. CONCLUSION
We have carefully considered all of appellants'
arguments, including those that we may not have
addressed specifically, and have concluded that the district
court properly dismissed this action with pr ejudice with
respect to the counts of the complaint that it addressed,
except that it should have dismissed count six without
prejudice to the extent that the count r elated to sending
offensive messages and threats over the Internet.8
Consequently, we will modify the order of dismissal to
provide that count six partially is dismissed without
prejudice, and we otherwise will affir m the order of
dismissal with prejudice, and will affir m the order
remanding the remaining aspects of the complaint to the
Superior Court of New Jersey. We will r emand the case to
the district court to enter an order consistent with this
opinion. Costs on this appeal will be taxed against
appellants.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
_________________________________________________________________
8. Immediately before oral argument on this appeal, appellants filed a
motion requesting "an evidentiary hearing on possible conflicts of
interest of the district court" because of what appellants said were
their
"serious concerns" that the court "may have undisclosed conflicts of
interest or financial interests." W e have considered this application
carefully and will deny the motion as we find it to be without merit.
In
any event, the appellants' "serious concer ns" are quite immaterial,
as we
have exercised plenary review on all the issues on this appeal so that
it
would not matter if the appellants' concerns were justified. While we
recognize that we review the denial of a motion for leave to amend on
an
abuse of discretion basis, here we ar e upholding the denial on the
legal
basis that the proposed amendment would not survive a motion to
dismiss under Rule 12(b)(6). See Smith, 139 F.3d at 190. Thus, we have
not deferred to the district court on any issue on which we have
passed.
27
