Gambling Ads Won't Get Hearing

19 January 1999

In a case that will bring compulsive gamblers to the forefront, the U.S. Supreme Court has refused to grant fast-track review to a federal law that would protect compulsive gamblers from the lure of casinos and games of chance.

A New Jersey judge had ruled that free-speech rights are violated by the government's ban on television and radio ads that promote casinos not owned by Indian tribes. The justices, acting without comment, let the decision stand.

Government lawyers had urged the highest court to review the judge's ruling even before the case had been looked at by the Philadelphia-based 3rd U.S. Circuit Court of Appeals.

It's a confusing message that the courts have given because the advertising ban is in effect in only some parts of the nation because some federal appeals courts have ruled it unconstitutional while others have upheld it.

The longstanding federal law bans broadcast advertising for "any lottery, gift enterprise or similar scheme offering prizes dependent in whole or in part upon lot or chance." But Congress in the past 20 years has amended the anti-broadcast law to allow airing ads for casinos on Indian reservations, state-run lotteries or any gambling sponsored by non-profit promoters working for charitable purposes.

Today, 37 states and the District of Columbia sponsor - and aggressively advertise - lotteries; more than two-thirds of the states are home to Indian-owned casinos. Non-Indian casinos are legal in 22 states.

Still pending before the justices is an appeal of a ruling by the New Orleans-based 5th U.S. Circuit Court of Appeals that upheld the ban.

In the appeal rejected today, administration lawyers pointed to studies detailing economic and social problems, such as compulsive gambling and organized crime, associated with casino gambling and other gambling activities.

The appeal said that "broadcast advertising of casino gambling would directly contribute to compulsive gambling by reaching into the homes of current and potential compulsive gamblers and giving them immediate and repeated exposure to the sights and sounds of gambling, presented in especially attractive and persuasive ways."

In defending the broadcast ban, government lawyers said "no non-speech regulatory alternative offers comparable benefits in terms of reducing the risks and costs of compulsive gambling."

The case is U.S. vs. Players International, 98-721.

Interactive Gaming News asked a veteran communications attorney about the suit. John Crigler of Haley Bader & Potts said, "The Supreme Court's decision in Greater New Orleans Broadcasting will certainly be an important First Amendment case, but it may also have important implications for internet gaming interests."

He continued, "The critical First Amendment issue is whether the Court will permit the government to prohibit certain kinds of ads ('commercial speech') even when a regulatory scheme is inconsistent and when the harm it protects against is speculative. The government argues that it should be able to regulate 'lottery' ads on a piecemeal basis and permit only certain government-approved speakers to advertise. It contends that it should be able to authorize the states, Indian tribes, charities and other categories of speakers to advertise gaming, while prohibiting private commercial operators from doing the same thing. It justifies this distinction by saying that only commercially sponsored gaming leads to grave social ills such as addictive gambling.

As a gaming case, the critical issue is how the Court will define the "federal interest" in regulating gaming, noted Crigler. The tension in this case is between the federal interest in discouraging gaming by banning gaming ads and the interest of the states in deciding that gaming activities are lawful. Is the federal interest so strong that it can ban the advertising of activities that a state has authorized? In later cases, the Court may have to deal with the similar tension between a federal interest in banning the advertising or offering of internet gaming and the laws of other countries which permit such gaming.

This case bears watching. Don't think of it as just a commercial speech case.