What is a Casino Marker and is Casino Credit dischargeable in Bankruptcy?

Certain people who like to gamble go into the casino with a specific amount of money that they believed before-hand would be all they would use to play.  However, for one reason or another, they make the ill-fated decision to request a credit line from the casino called a “Marker”.  Casino markers are lines of credit that allow frequent gambling clientele easy access to substantial sums of money to use at the table games or slots in a casino.  Casino markers are short-term, interest-free loans. However, repayment must be prompt or the patron faces high interest fees and possible criminal charges.

In general, a player will apply for casino credit by completing a standard form setting forth the name of the applicant, his or her address, the name of the applicant’s bank, and the bank account number. Casino personnel approve the applications pending verification of the basic bank information, including the average balance of the applicant’s account.  A marker is a gambling credit instrument that allows a gambler to receive all or part of the credit line the casino has approved for him, based on the gambler’s prior credit application with the casino. Once the gambler and a casino representative sign the marker, the gambler may exchange the marker for gambling tokens, or chips. If the gambler does not pay the marker when he has finished gambling, the marker is outstanding and the casino may later submit the marker, like a check, to the gambler’s bank for payment.

If the marker remains outstanding, casino personnel attempt to notify the customer and, after a specified period of time, submit the marker to the applicant’s bank for collection. If the bank account does not have sufficient funds, the casino will again attempt contact the customer and make demand for payment.  If payment is not forthcoming, the casino has the option to refer the customer for possible criminal prosecution, similar to passing a bad check.  However, it should be noted that so long as you file for bankruptcy before any criminal complaint is made, the automatic stay would stop the claim from commencing, as the Bankruptcy code stays any attempt to collect a prepetition debt during the course of a bankruptcy, pursuant to 11 U.S.C. §362(a).

Many pathological gamblers will seek to discharge the over extended marker or credit lines they have obtained in a casino just like a cash advance at the ATM in the casino through a Chapter 7 bankruptcy filing.  However, in some situations, a casino will challenge the ability to discharge the credit line through an adversary proceeding due to false pretenses, or if the debt exceeded $750 with in 90 days of the bankruptcy filing, pursuant to 11 U.S.C. §523(a).  Relative to casino markers, as with a cash advance, the key question is did the gambler have the intent to repay the debt at the time they took out the marker?

Since a casino marker is generally charged against a future check from the Debtor’s bank account, a casino may argue fraudulent misrepresentation to the casino of the Debtor’s ability to repay the loan, if they did not have the money in their bank account at the time they took out the marker.  However, the terms “false pretenses” and “false representation” are equivalent to “actual fraud,” as these terms are used in 11 U.S.C. § 523(a)(2)(A) A debt based solely on an unpaid check is nondischargeable (if at all) only as a debt arising from willful and malicious injury under 11 U.S.C. § 523(a)(6).  Moreover, a creditor casino has the burden to prove that the debtor intended to injure or harm the casino when taking the marker in order to obtain an order for non dischargeability.

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