Gottlieb v. Tropicana Hotel and Casino

Brief Fact Summary. A promotion at a casino allowed contestants to spin a wheel in an attempt to win $1 million dollars.  An individual spun the wheel and a dispute arose as to whether the individual won the $1 million dollars.

Synopsis of Rule of Law. "[M]inimal detriment to a participant in a promotional contest is sufficient consideration for a valid contract."

Facts. The Plaintiff, Ms. Gottlieb ("Ms. Gottlieb"), was a member of the Defendant, Tropicana casino's (the "Defendant") Diamond Club.  This membership was evidenced by a card, which could be swiped at various places in the casino.  On July 24, 1999, the Plaintiff while in the casino, played the Fun House Million Dollar Wheel Promotion ("Million Dollar Wheel").  As a Diamond Club member, the Plaintiff was entitled to one free spin of the Million Dollar Wheel.  The Tropicana advertised this free spin in many mediums although there is no evidence the Plaintiff ever saw any of the advertising material.  The Plaintiff alleges that the operator of the Million Dollar Wheel swiped her card and then she pressed a button to activate the wheel.  The Plaintiff then alleges that the Million Dollar Wheel landed on the $1 million grand prize.  However, the Plaintiff further alleges the operator of the Million Dollar Wheel immediately swiped another card and reactivated the wheel landing on a lesser prize, two show tickets.  The Defendant alleges the wheel initially landed on the lesser prize.

Issue. Does adequate consideration exist when a person participates in a promotion?

Held. Under both New Jersey and Pennsylvania law, adequate consideration is a prerequisite for an enforceable contract.  Consideration is defined as a "bargained for exchange, and it may take the form of either a detriment to the promisee or a benefit to the promisor."  Something of value must pass from the "player to the casino."  The court relied on [Lucky Calendar Co. v. Cohen] a New Jersey Supreme Court case concerning a lottery type advertising campaign, in which contestants were required to fill out a coupon and deposit it in a box in hopes of winning a prize.  The [Lucky] court observed:  "[T]he consideration in a lottery, as in any form of simple contract, need not be money or the promise of money. Nor need it be of intrinsic value; 'a rose, a hawk or a peppercorn' will suffice, provided it is what is asked for by the promisor and is not illegal …. Whether a 'peppercorn' or the filling in and delivering of a coupon is sufficient consideration for a promise depends only on whether it was the requested detriment to the promisee induced by the promise. That is consideration which is regarded as such by the parties."  The [Lucky] court further observed, " '[c]ompleting the coupon and arranging for the deposit of it in the box' at the store was the detriment to the promisee, and the 'increase in volume of business' was the benefit to the promisor and its customer, the owner of the Acme stores." The court also relied on a Pennsylvania case, [Cobaugh v. Klick-Lewis, Inc.], which held that in the context of a promotion where shooting a hole in one could lead to winning a free car, "the promisor benefitted from the publicity of the promotional advertising, and the golfer performed an act that he was under no legal obligation to perform."  Here, the casino "offered the promotion in order to generate patronage of and excitement within the casino" and was by no means altruistic.  Also, the Plaintiff suffered various detriments.  As such, the Plaintiff "provided adequate consideration to form a contract with Tropicana.

Discussion. This case offers a good illustration of the purpose of consideration, and how it is applied to contests and other games of chance.