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There isn't much downside to them personally for letting the guy play
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How can you say that? The women in the tournament were bothered that this happened. So this affected their enjoyment of the experience. And the casino is getting blasted and criticized. Negative publicity DOES count as a downside.
They had a mess of a situation here. Getting sued for millions is a risk that can happen at ANY time. That doesn't mean that you take it realistically. If a casino wants to throw me out then they throw me out. If I want to scream discrimination because I can't get reservations at their top restaurant they don't suddenly decide to boot somebody else and seat me because "OMG...he might actually sue!!"
The WSOP in LV has Ladies events too. What would happen if a guy tried to enter one of those events? He would get shown the door and told that he's a freaking idiot. And when he screams that he's going to sue then Harrah's would say, "that's nice. Looking forward to it. You're still a moron. Now get out."