Casino Not Required To Pay $41 Million Error

The Iowa Supreme Court unanimously ruled that the Isle Hotel Casino in Waterloo, Iowa does not have to pay 87-year old Pauline McKee $41,797,550.16. A computer glitch caused a screen with that bonus award to appear on the penny slot McKee was playing in 2011.

All seven members of the Iowa Supreme Court recently ruled that Pauline McKee, an 87-year old grandmother from Illinois, did not hit a multi-million dollar jackpot at the Isle Hotel Casino in Waterloo, Iowa in 2011, even though the screen said: “The reels have rolled your way! Bonus Award – 797550.16.” The justices ruled the message was a computer glitch and the casino did not have to pay.

McKee’s prize actually was $1.85, based on how the symbols aligned on the one-cent Miss Kitty slot. Game rules stated the maximum award was $10,000 and no bonus awards were allowed, wrote Justice Edward Mansfield, noting the rules and pay table were available on a touch screen, and implied a contract between the casino and the player. “Any message appearing on the screen indicating the patron would receive a $41 million bonus was a gratuitous promise and the casino’s failure to pay it could not be challenged as a breach of contract,” Mansfield wrote in a ruling dismissing McKee’s lawsuit.

Casino attorney Stacey Cormican said a $41 million payout would equal about half of the gross revenue the casino generated last year. She added,

“Casinos are required to post rules and follow those rules. If either the patrons or casinos could change the rules in the middle of the game, it would be absolutely chaos,” she said, noting computer glitches like the one in question are rare.

At the casino’s request, the Iowa Racing and Gaming Commission sent the machine’s hardware and software to a laboratory for analysis. The tests concluded the machine had given an erroneous bonus message that Aristocrat Technologies Inc., the game’s manufacturer, had warned casinos about in 2010, advising them to disable legacy bonusing while a new system was being developed. Isle, however, did not do that. Still, commissioners concluded the casino did not have to pay because of the glitch. A sign on the game warned, “Malfunction voids all pays and plays.”

In 2012, McKee filed a lawsuit in which her lawyers disputed the machine malfunction and said jurors should decide. A judge dismissed that case before trial.

After the bonus screen appeared, McKee and family members with her at the casino summoned an attendant who gave her a $10 bonus card while casino officials began an investigation. The casino also comped their rooms.