Philanthropist Counter-Sues Harrah's
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Posted: 1:07 PM Nov 20, 2009
Philanthropist Counter-Sues Harrah's
Watanabe Files Lawsuit
A Nebraska philanthropist facing criminal charges stemming from almost $15 million in Las Vegas gambling debts moved Thursday to turn the tables against casino giant Harrah's Entertainment.
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LAS VEGAS (AP) - A Nebraska philanthropist facing criminal charges stemming from almost $15 million in Las Vegas gambling debts moved Thursday to turn the tables against casino giant Harrah's Entertainment.

Terrance "Terry" Watanabe filed a civil lawsuit alleging fraud, breach of contract, conspiracy and negligence among 15 claims accusing company executives of manipulating him with a "secret intention" of siphoning off his wealth. His 19-page lawsuit filed in Clark County District Court seeks unspecified damages.

The 52-year-old former owner of the Omaha, Neb.-based Oriental Trading Co. also filed a complaint Thursday with the Nevada Gaming Control Board.

It accuses Harrah's of violating state gambling regulations, cheating him, and plying him with prescription drugs and alcohol while he bet and lost millions of dollars at roulette and $25 multiline slot machines.

A spokesman for Harrah's linked the two filings to the criminal case the Clark County district attorney filed earlier this year against Watanabe, and said the company would not comment on either court case.

A Gaming Board investigation would uncover no wrongdoing, Harrah's spokesman Gary Thompson added.

"We have a long-standing history of responsible and ethical practices," Thompson said. "We're licensed in more jurisdictions than any other gaming company. We stand by our record."

Harrah's, the world's largest gambling company by revenue, owns or operates more than 50 casinos in 12 states and five foreign countries, including the Bally's, Paris Las Vegas and Flamingo resorts on the Las Vegas Strip and the Horseshoe and Harrah's brands on the Gulf Coast and Midwest.

Watanabe has the deep pockets to fund a fight. He told the regulatory board he bet more than $825 million in 2007 alone at Harrah's casinos including the Rio just west of the Las Vegas Strip, and the company flagship Caesars Palace on the Strip.

His lawsuit and regulatory board complaint, taken together, signal a move by Watanabe and his Los Angeles-based lawyer, Pierce O'Donnell, to go toe-to-toe with Harrah's over what the civil complaint calls a "meritless criminal prosecution."

"The reason he hired me was he was tired of playing defense," O'Donnell said.

O'Donnell was a lead lawyer in a landmark decision reached Wednesday by a federal judge in New Orleans blaming the U.S. Army Corps of Engineers for "monumental negligence" in maintaining levees that failed after Hurricane Katrina in 2005.

"Now we're going on offense," O'Donnell said of the Harrah's case. He said Harrah's used "bait-and-switch" tactics to break promises made when inviting Watanabe to live at the Rio All-Suites Hotel Casino and later at a three-bedroom palazzo at Caesars.

"Terry Watanabe is innocent of any crime," O'Donnell said, "and Harrah's owes him money."

A previous legal team in Las Vegas alleged before and after a grand jury indicted Watanabe on criminal charges April 29 that Harrah's kept Watanabe "significantly and visibly intoxicated" while he gambled in late 2007.

Watanabe has pleaded not guilty to two felony theft and two bad check charges carrying the possibility of probation or up to 16 years in prison. He remains free on $1.5 million cash bail pending trial next July.

Watanabe lived in Las Vegas for most of 2007, according to the civil lawsuit, living and gambling at Caesars Palace "essentially nonstop" for six months until December. All the while, he alleges, casino managers, hosts, security guards and "handlers" monitored and controlled his physical movements.

"Mr. Watanabe was an obvious gambling addict and Caesars and Harrah's senior management made a conscious decision to exploit his well-known addiction," the Gaming Board complaint says.

The lawsuit and Gaming Board complaint also allege that casino employees provided Watanabe with prescription painkillers that, combined with an endless flow of alcohol "rendered him utterly intoxicated and unfit to gamble."

The Control Board complaint says Watanabe lost $112 million gambling at Harrah's in 2007, and the casino let him run up a tab of up to $17 million in unpaid markers, or IOUs to the casino, at various times during the year.

Nevada law treats written casino markers as checks, and allows criminal prosecution for failure to pay. Harrah's turned some $14.75 million in unpaid markers over to the Clark County district attorney in early 2008, and prosecutors took the case to the grand jury in April.

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