Regulation banning casino advertising held unconstitutional

CALIFORNIA–A 63-year-old ban on broadcast advertisement for casino gambling violates broadcasters’ rights and is unconstitutional, the U.S. Court of Appeals in San Francisco (9th Cir.) ruled in late February. The court upheld a 1992 ruling of the federal District Court in Las Vegas that the ban violates the broadcasters’ freedom of speech.

The Communications Act of 1934 criminalized the broadcast advertisement of commercial lotteries. Although Congress has amended the federal anti-lottery statutes on several occasions, allowing advertisements for gambling such as state-run lotteries, not-for- profit lotteries and gaming conducted under the scope of the Indian Gaming Regulatory Act, the ban on broadcast advertising of private casino gambling has remained intact.

The appellate court said it was heavily influenced by the 1996 Supreme Court decision to strike down a Rhode Island statute prohibiting the advertising of liquor prices, and by the fact that the federal statute has been amended on numerous occasions to allow broadcast advertising for other types of gambling.

In 1992 two Nevada broadcasting companies which own and operate television stations in Las Vegas and Reno filed suit against the United States and the Federal Communications Commission, claiming that the ban violated the First Amendment. They argued that the advertisements are commercial speech about lawful activity and are not misleading, and therefore warrant protection under the First Amendment. The district court agreed with the broadcasters and struck down the regulations.

In its appeal, the government argued that it had an interest in reducing public participation in gambling. It also argued it had an interest in protecting states which choose not to allow casino gambling within their borders. Without the regulation, the government argued, non-casino states will have no effective way of protecting their residents from casino gambling advertisements.

Although the appellate court recognized both of these as substantial interests, it determined that the regulation does not directly advance these interests. The court stated that the numerous exceptions, especially the exemption of Indian casinos from the ban, undermine the government’s purported interest in protecting non-casino states against the “perniciousness” of commercial gambling.

Since the Federal Communications Commission had already suspended the ban after the 1992 ruling, the appellate court ruling will not have any immediate effects on broadcast casino advertising in Nevada. (Valley Broadcasting Company v. U.S.; Media Counsel: Janet Frasier Rogers, Las Vegas)