Capital Briefs: Court Upholds Right To Collect Casino Debts

The New Mexico Supreme Court ruled last month that banks and credit card companies may force consumers to repay debts incurred at casinos on Indian reservations.

New Mexico resident Barbara Srader had sued Citicorp, Norwest Corp., Visa U.S.A., and 13 other financial institutions for processing checks, ATM withdrawals, and credit card cash advances at casinos on reservations.

Ms. Srader claimed that because gambling is illegal in New Mexico, the banks should not have provided financial services to the casinos. As punishment, the banks should be forced to return the money customers lost at the casinos, she claimed.

The court, however, upheld a trial judge's decision to dismiss the suit. In a highly technical 4-0 decision, the justices ruled that the law requires Ms. Srader to also sue the Indian tribes. However, because those tribes are considered sovereign governments, they may not be sued. Because the Indian tribes may not be sued, the banks that provide services to them are also immune from these types of suits, the court said.

-Jaret Seiberg