Pauline McKee v. Isle of Capri Casinos, Inc. and Ioc Black Hawk County, Inc.
2015 Iowa Sup. LEXIS 50
| Iowa | 2015Background
- Pauline McKee played a Miss Kitty penny slot machine at Isle Casino; a spin entitled her to 185 credits ($1.85) under the machine's posted rules and paytable.
- Simultaneously the screen displayed “Bonus Award - $41,797,550.16,” which McKee believed was a valid payout; she summoned casino staff and was paid $18.10 but not the alleged bonus.
- The Iowa Racing and Gaming Commission (IRGC) and independent lab (GLI) investigated and concluded the $41M display was erroneous/a machine error; Aristocrat (manufacturer) had warned of such erroneous legacy-bonusing displays.
- McKee sued the casino alleging breach of contract, promissory and equitable estoppel, and violation of Iowa’s Consumer Fraud Act; the casino moved for summary judgment.
- The district court granted summary judgment for the casino on all counts, holding the game rules (approved by IRGC) formed the express contract, no estoppel or detrimental reliance existed, and McKee suffered no ascertainable loss under the consumer-fraud statute.
- The Iowa Supreme Court affirmed: the posted rules controlled the parties’ contract; the $41M message was not a contractual entitlement; estoppel and consumer-fraud claims failed as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the casino breached a contract by refusing to pay the $41,797,550.16 bonus | McKee: the machine display created a right to whatever the machine announced (or an implied bonus contract) | Casino: the IRGC‑approved rules/paytable formed the express contract and contained no bonus; the screen message was gratuitous/error | Court: Rules constituted the express gambling contract; McKee limited to $1.85 paid under paytable — no breach |
| Whether equitable or promissory estoppel bars the casino from denying the $41M | McKee: the display (and casino conduct) induced reliance that she had won the bonus | Casino: no clear promise or representation before play; no detrimental reliance by McKee | Court: No evidence of a promise inducing detrimental reliance; both estoppel claims fail |
| Whether McKee stated an actionable consumer fraud claim under Iowa Code § 714H | McKee: casino’s conduct/false display constituted deceptive practice causing loss | Casino: no ascertainable loss — she had no contractual right to the bonus and actually won money that night | Court: No ascertainable loss tied to a prohibited practice; consumer‑fraud claim fails |
| Whether McKee’s appeal was timely after her rule 1.904(2) motion | McKee: her postjudgment motion tolled the appeal period | Casino: motion was improper/new evidence and should not toll appeal time | Court: Motion had a proper purpose (challenged district court’s characterization and relied on record evidence); appeal timely |
Key Cases Cited
- Blackford v. Prairie Meadows Racetrack & Casino, 778 N.W.2d 184 (Iowa 2010) (gambling contracts governed by contract principles and regulatory scheme)
- Eash v. Imperial Palace of Mississippi, LLC, 4 So. 3d 1042 (Miss. 2009) (player limited to payout under posted rules despite erroneous higher electronic display)
- Pickle v. IGT, 830 So. 2d 1214 (Miss. 2002) (machine’s symbolic display governed outcome over celebratory lights/sounds; no jackpot when paytable does not support it)
- Ledoux v. Grand Casino–Coushatta, 954 So. 2d 902 (La. Ct. App. 2007) (distinguishing cases where rules granted bonus; casino must show objective proof of malfunction if denying an otherwise rule‑based payout)
- Miller v. Sodak Gaming, Inc., [citation="93 F. App'x 847"] (6th Cir. 2004) (promissory estoppel rejected where no promise to pay outside the clearly posted rules)
- Coleman v. State, 258 N.W.2d 84 (Mich. Ct. App. 1977) (lottery/prize entitlement governed by advertised rules; erroneous announcement does not create new contract)