## Facts

- Najia Rahmani, a Virginia resident, began gambling at Resorts International Casino in Atlantic City, New Jersey, in 1984 and later also patronized Caesars (Boardwalk Regency).
- Over roughly 13 years, the casinos repeatedly contacted Rahmani in Virginia by phone and mail and offered inducements, including limousine transportation, complimentary hotel rooms, meals, and entertainment.
- Rahmani alleged these inducements caused her to travel to Atlantic City and gamble repeatedly, resulting in approximately $3.8 million in losses.
- She alleged she was a compulsive gambler and that the casinos knew or should have known of this condition but continued to encourage her gambling.
- Rahmani filed a diversity action seeking rescission and restitution of her gambling losses and asserting tort claims (including negligence and harassment-type theories), plus a separate forgery claim related to a disputed marker.
- Defendants moved to dismiss for failure to state a claim.

## Issues

1. Whether Virginia or New Jersey law governed the alleged “junket” agreements and related claims under Virginia choice-of-law rules.
2. Whether Rahmani could rescind the alleged agreements and obtain restitution of gambling losses incurred at New Jersey casinos.
3. Whether casinos owed a tort duty to prevent or limit a patron’s gambling based on alleged compulsive gambling.
4. Whether Virginia’s anti-gambling public policy permitted recovery of losses lawfully incurred in New Jersey.

## Decision

- The court applied New Jersey law, reasoning that no mutually enforceable obligations arose until Rahmani placed bets in New Jersey.
- The court dismissed Rahmani’s rescission and restitution claims because New Jersey legalizes and regulates casino gambling and permits promotional inducements such as complimentary transportation and amenities.
- The court dismissed Rahmani’s tort claims, holding New Jersey law imposed no duty on casinos to restrain or protect a patron from lawful gambling, even if the patron is a compulsive gambler.
- The court rejected the attempt to use Virginia’s anti-gambling policy to recover losses from lawful gambling conducted in New Jersey.
- The court dismissed all claims with prejudice except the forgery claim, which was dismissed without prejudice with leave to amend.

## Legal Principles

- In a diversity case applying Virginia conflicts rules, contract-related claims are governed by the law of the place where the last act creating mutually enforceable obligations occurs; for casino gambling promotions tied to wagering, that place is where the bets are placed.
- A plaintiff generally cannot obtain rescission or restitution for gambling losses lawfully incurred in a state that legalizes and regulates the gambling activity and related casino promotions.
- Under New Jersey law, casinos do not owe a general tort duty to prevent a patron from engaging in lawful gambling based on alleged compulsive gambling.
- A forum state’s anti-gambling policy does not extend to void or unwind transactions involving lawful, regulated gambling conducted in another state.

## Conclusion

The court held that New Jersey law governed and foreclosed recovery of gambling losses and related tort relief arising from lawful, regulated casino gambling in Atlantic City, while permitting only a separately pleaded forgery claim to be reasserted through amendment.


Rahmani v. Resorts Int’l Hotel, Inc., 20 F. Supp. 2d 932 (E.D. Va. 1998)