The Ethical Duty of Competence
By Martha Moore

The recent explosion of gaming has resulted in the need for attorneys knowledgeable in gaming law and its many laborious regulations. Regulated, legalized gambling has been in existence since 1931 in Nevada and exists in many states and around the world.

State and federal governments regulate lotteries (conducted by state governments), charitable gaming (bingo, for example), pari-mutuel gaming, sports betting, casino gaming, shipboard gaming, Internet gaming, and Indian gaming. In addition to numerous state statutes, there are countless federal gaming statutes.[FN1] A common example is the federal cash transaction reporting statute, which requires certain financial institutions to report any single or aggregate cash transaction over $10,000 in a single day. [FN2]

There also exists the Federal Travel Act, which prohibits traveling in interstate or foreign commerce to promote, manage, further, or carry on any business enterprise involving illegal gambling.[FN3] Similarly, there are federal laws restricting the use of most media to advertise legal gambling using the United States Postal Service,[FN4] public airwaves via radio and television,[FN5] and wire communications to disseminate information regarding gambling. [FN6]

Indeed, the gaming industry is one of the most heavily regulated industries in the United States. Practically every aspect of it is regulated, and there are limits on the number and location of casino licensees. The locations for gambling are restricted. For example, casino gaming may not be located within 1,000 feet of a place of worship, a school, college or university, a bank or credit union, or a pawnshop, unless approved by the city. Gaming consumers are also subject to regulation. For example, there may be a disassociated person's list.[FN7]

Furthermore, applicants for casino licenses are heavily scrutinized. Applicants must "establish by clear and convincing evidence their suitability as to integrity, moral character, and reputation; personal and business probity; financial ability and experience; responsibility; and other criteria considered appropriate by the board."[FN8] Applicants must also "consent to inspections, searches, and seizures and the providing of handwriting exemplar, fingerprints, photographs, and information." [FN9]

Similarly, gaming suppliers are subject to regulation and license requirements. Gaming suppliers include, but are not limited to, "junket enterprises, security businesses, manufacturers, distributors, persons who service gaming devices or equipment, garbage haulers, maintenance companies, food purveyors, and construction companies." [FN10] As stated, even gaming food suppliers are subject to regulation.

Additionally, employees and employee unions are regulated. Those subject to regulation include: casino managers; cashiers; slot machine and bill-changer staff; repair and maintenance personnel; surveillance, security and investigations employees; card dealers; money changers; money-transfer workers; and slot-machine technicians.

Entities that provide gaming devices and equipment to casinos-such as cards, chips, dice, roulette wheels, slot machines, table layouts, and tokens-also must be licensed. Prospective suppliers are subjected to investigations similar to those conducted on prospective casino operators. Many states also require regular reporting on sales activity and financial status. [FN11]

Given the highly regulatory nature of gambling, it is essential that lawyers who practice gaming law be conversant of the countless statutes and fully equipped to provide competent representation.

In fact, competence is the first rule of ethics. [FN12] Competence is not a game of chance. Rather, competence requires that a lawyer possess "legal knowledge, skill, thoroughness and preparation" when representing a client. [FN13]

Notwithstanding the desire to secure a lucrative client, if the lawyer is not competent in gaming law or cannot become competent with reasonable preparation and research, or associate with a competent gaming attorney, the lawyer must decline the representation. [FN14] A lawyer's ignorance of strict gaming law requirements, including the myriad statutes and regulations, may result in grave consequences to gaming clients. Incompetence may also result in grave consequences to the lawyer-a malpractice action, a bar grievance, or the diminution of the lawyer's reputation.

[FN1] See, e.g., 15 U.S.C. §§ 1171-78, 3001-07 (2000); 18 U.S.C. §§ 224, 1301-07 (2000); 25 U.S.C. §§ 2701-21 (2000); 39 U.S.C. § 3005 (2000).
[FN2] 26 U.S.C. § 6050 (2000).
[FN3] 18 U.S.C. § 1952.
[FN4] Id. §§ 1302-03; 39 U.S.C. §§ 3001-07.
[FN5] 18 U.S.C. § 1304.
[FN6] Id. § 1084.
[FN7] A disassociated persons list is a list for which a person can voluntarily notify the gaming board of his or her pledge not to visit a casino in Michigan. Id. § 432.225(2).
[FN8] MICH. COMP. LAWS §§ 432.204(17)(a), 432.206(1).
[FN9] § 432.206(9).
[FN10] Id. § 432.202(gg).
[FN11] ROBERT M. JARVIS ET AL., GAMING LAW: CASES AND MATERIALS 333 (2003); see, e.g., MICH. COMP. LAWS §§ 432.209(4), (8); 432.223; 432.204a(1)(a), (c)(i), (g), (h), (p), (s).
[FN12] MODEL RULES OF PROF'L CONDUCT R. 1.1 (2005).
[FN13] Id.
[FN14] MODEL RULES OF PROF'L CONDUCT 1.16(2005).