Gottlieb v. Tropicana Hotel and Casino
109 F. Supp. 2d 324 (2000)
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Rule of Law:
Participation in a promotional contest constitutes adequate consideration to form an enforceable contract because the detriment incurred by the participant (such as traveling to a location, waiting in line, and providing personal data) is a bargained-for exchange for the chance to win a prize.
Facts:
- Rena Gottlieb was a member of Tropicana Casino's 'Diamond Club,' a free loyalty program that required members to provide personal information for marketing purposes.
- Diamond Club members were entitled to one free spin per day on the 'Fun House Million Dollar Wheel Promotion,' which offered a grand prize of $1 million.
- On July 24, 1999, Gottlieb went to the Tropicana casino and waited in line to play the promotional game.
- To play, Gottlieb presented her Diamond Club card, which a casino attendant swiped into a machine to gather data about her gambling habits.
- Gottlieb pressed a button to spin the wheel and claims it landed on the $1 million prize.
- Gottlieb alleges that the casino attendant immediately intervened, swiped another card, and reactivated the wheel, causing it to land on a much smaller prize.
- Tropicana denies that the wheel landed on the $1 million prize or that its employee intervened in the game.
Procedural Posture:
- Rena and Sheldon Gottlieb (plaintiffs) filed a complaint against Tropicana Casino and Resort (defendant) in the United States District Court for the Eastern District of Pennsylvania.
- The complaint included claims for breach of contract, misrepresentation, fraud, and violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law (UTPCPL).
- Tropicana filed a motion for summary judgment, seeking to have all of the Gottliebs' claims dismissed without a trial.
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Issue:
Does a casino patron's participation in a free promotional game, which requires her presence at the casino and the use of her loyalty card, constitute sufficient consideration to form an enforceable contract with the casino?
Opinions:
Majority - Bartle, District Judge
Yes. A patron's participation in a free promotional game constitutes sufficient consideration to form an enforceable contract. The court found no conflict between Pennsylvania and New Jersey law on this issue, as both recognize that consideration can be a minimal detriment to the promisee that is bargained for by the promisor. Gottlieb's actions—traveling to the casino, waiting in line, and allowing Tropicana to collect her personal and gambling data via her Diamond Club card—constituted a legal detriment. Correspondingly, Tropicana received a benefit from the increased patronage and excitement generated by the promotion. The court also rejected Tropicana's argument that the agreement was an illegal lottery, reasoning that the 'personal inconvenience' constituting consideration for a contract does not meet the statutory definition of 'something of value' required to make a contest an illegal gambling scheme under New Jersey law.
Analysis:
This case clarifies that promotional contests, even when advertised as 'free,' can create legally binding contracts. The court's decision establishes that the non-monetary detriments incurred by a participant, if sought by the promisor to advance its business interests, are sufficient to constitute consideration. This holding protects consumers who rely on such promotions and prevents companies from evading their obligations by claiming the absence of a formal purchase. The ruling also creates a useful distinction between the low threshold for consideration in contract law ('a peppercorn') and the higher 'something of value' standard required to classify a promotion as illegal gambling.
