To be more precise, should casinos be able to use the law of negotiable instruments to get around the law of contracts? Or should gamblers be able to use the law of contracts to get around the law of negotiable instruments?
Why do we pose this question? In brief, many courts have held and continue to hold that the judicial system is not available to resolve gambling debts, or drug deals for that matter. The rationale for these decisions is that the courts will not enforce private wagers or drug deals because the object or purpose of such agreements is illegal in most States. (By the way, why should such purely consensual transactions be illegal?) At common law, when an illegal end (such as gambling or the sale of drugs) must result from performance of the contract itself, such an agreement is deemed illegal and is thus not enforceable in courts of law.
Casinos in Las Vegas, however, have devised a very clever way to get around this pesky legal doctrine. Casinos grant credit to their best customers (otherwise known as “high-rollers”) through “casino markers” and, moreover, such markers are generally considered valid negotiable instruments (like bank checks and drafts) under Revised Article 2 of the Uniform Commercial Code as long as such markers meet the conditions set forth in Art. 2; i.e. are in writing, are signed, are payable to the order of the casino and payable at a definite time, etc. (See the case of Las Vegas Sands v. Nehme for an egregious example of this clever strategy in action.)
But as Professors Denis Rudd, Louis Swartz, and David Lovejoy – all of whom are affiliated with Robert Morris University – explain in this short paper aptly titled “An overview of the enforceability of gambling debt”, the problem of unpaid gambling debts has become a matter of national concern with the proliferation of casinos from their traditional home base in Nevada to at least 38 other States (counting Indian casinos). So, how should the courts respond? Should “The House” always win?
The House always wins.
prior probability 
Purely consensual transactions should be legal unless the state can show a compelling reason for not wanting a transaction to proceed. For instance; I want to hire you to kill me wife. The state has an interest in keeping citizens alive. Does the state have a convincing reason for always backing the house. I don’t think they do. In fact, now that the state has decided to make health care an affirmative responsibility, the state may want to bust the house. Gambling is an addiction according according to all manner of rehabilitation specialist. My state believes it is an addiction and puts away a portion of the proceeds to make treatment free for anyone who cannot stop.
Great point. The “murder for hire” example is a textbook case of a consensual contract generating what economists call a “negative externality” (i.e. adverse effects on third parties who are not a party to the original contract). In the case of addiction to gambling (or drug addiction, for that matter), I could see a strong “externality” argument being made in favor of prohibition and the non-enforceability of such contracts, but now, notice the double standard here: federal law makes it illegal to sell drugs in all States but at the same allows each State to decide for itself whether to legalize gambling!