A Blog About Online Gaming and Entertainment Regulations
Rolling the Dice with Casino VIP Lists
In the competitive world of land-based casinos, high roller “VIP” players are courted with a host of special perks and privileges. A casino’s proprietary VIP customer list represents one of its most valuable assets, almost akin to the secret formula of Coca-Cola. This is why the Maryland Live! Casino filed suit in federal court in Maryland against Helena Wong. Ms. Wong is a former VIP Casino Host at Maryland Live! who left her position in June 2014. About a month later (according to the complaint), Wong was hired by a new casino located near Maryland Live!, Horseshoe Baltimore Casino (“Horseshoe”).
Maryland Live!’s complaint alleges that Ms. Wong misappropriated Maryland Live’s VIP customer list and used the list to solicit business for Horseshoe in advance of Horseshoe’s grand opening on August 26, 2014. According to Maryland Live!, Wong used her Horseshoe email account to email individuals on Maryland Live!’s Chairman Club and Black Card list, inviting these high rollers to Horseshoe and announcing the grand opening. (These are the top two tiers of Maryland Live!’s player rewards program). The complaint contends that the next day, Wong sent a follow-up email to the same recipients telling them not to show the email to any Maryland Live! personnel. Some recipients may have notified Maryland Live! about the alleged solicitation.
Maryland Live! claims that Ms. Wong’s former employment as a VIP Casino Host at its casino gave her access to the special office and computer system housing its proprietary rewards program information. The casino further bolsters its claims by providing documentation that Wong, when hired, agreed to abide by the Maryland Live! employee handbook’s policies, including a “Confidentiality of Business Information” policy. The casino asserts that it takes other measures to secure its confidential customer information, including restricting access to its computer systems containing customer confidential information.
The casino’s claims against Ms. Wong include a request for permanent injunctive relief and damages for misappropriation under Maryland’s Uniform Trade Secret Act. Maryland Live! also includes claims for tortious interference with its economic relations and Wong’s alleged breaches of confidentiality and the fiduciary duty of loyalty. The requested injunction seeks to prevent Wong from contacting or soliciting the business of any Maryland Live! customers that Wong did not know previous to her employment at Maryland Live!
Maryland Live! also sought a temporary restraining order (“TRO”) to prevent Ms. Wong from utilizing Maryland Live!’s confidential customer list. On August 22, Judge Garbis sided with Maryland Live!, issuing a TRO against Ms. Wong and anyone acting in concert with her. The TRO bars Ms. Wong and others from using or disclosing in her new position at Horseshoe any confidential or proprietary information obtained from Maryland Live!, including customer lists. The TRO also prohibits Wong from contacting or soliciting the business of any Maryland Live! customers, including but not limited to, “Chairman Club” or “Black Card Members,” that Wong did not know prior to her Maryland Live! employment. Further, the court directed Wong to return to Maryland Live! any confidential business information (and any copies), including customer list information.
On the Friday before Labor Day, August 29th, all parties returned to court for a hearing on Maryland Live!’s motion for preliminary injunction. Judge Garbin granted the motion, finding that Maryland Live! established a sufficient likelihood of success on at least one of its claims – namely, Wong’s apparent acknowledgement at the hearing that the confidentiality provision in the employee handbook created an obligation on Wong to maintain customer information and not to use it outside of her employment. The preliminary injunction prohibits Ms. Wong, and any person or entity acting in concert with her, from initiating any further communications with any of the persons whose email addresses were included in emails at issue. The court also ordered Wong to provide to her counsel, to maintain in confidence, any document in her possession or control containing contact information regarding Maryland Live! customers obtained during the course of her employment. Wong may not initiate contact with any of these customers. The preliminary injunction notes that Horseshoe is not barred from contacting the customers if it obtains customer e-mails from a source other than Wong. Horseshoe has not been named as a party and has indicated it is not commenting on the matter.
Ms. Wong has until September 16, 2014 to answer Maryland Live!’s complaint. Although the federal judge issued the TRO and the preliminary injunction, it will be interesting to see if the court is equally receptive to the requested two-year non-solicitation/contact request. (Of course, the case may settle before we get to that ruling). One thing is clear, though – in the highly competitive gaming market – especially in areas with new casinos opening adjacent to existing properties – casino operators will be aggressive in seeking redress against those believed to have misappropriated customer information. Casinos may also need to review (and perhaps revise) their employment contracts, handbooks and agreements to further protect their confidential business information.