CasinoCityTimes.com

Gurus
News
Newsletter
Author Home Author Archives Author Books Send to a Friend Search Articles Subscribe
Stay informed with the
NEW Casino City Times newsletter!
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Recent Articles
Best of I. Nelson Rose

Gaming Guru

author's picture
 

Courts Split on Casinos' Right to Advertise

17 February 2000

Casinos in Las Vegas and Reno can advertise gambling on Nevada radio and television stations. A judge in New Jersey went further, ruling that broadcasters from New Hampshire to Texas may run commercials for Atlantic City casino gaming.

In Missouri, a judge recently threw out a law prohibiting charity bingo from advertising.

But licensed casinos in the South do not dare mention gambling over the air. Any Louisiana or Mississippi station owner who broadcasts a commercial for the legal gaming in his state risks losing his license and spending up to one year in jail.

Federal courts are issuing contradictory decisions, because two of America’s most fundamental legal rights have come into direct conflict.

The right to free speech is considered so essential that it was put at the top of the Bill of Rights.

But even older than the First Amendment is governments’ power to regulate and even prohibit gambling. A state has virtually unlimited Police Power, to protect the health, safety and welfare of its citizens.

Over the years, the U.S. Supreme Court has expanded the concept of free speech to include advertisements. Meanwhile, legal gambling has become so commonplace that state lotteries are often required by law to spend part of their budget on marketing.

The proliferation of various types of legal gambling has forced courts to decide whether the advertising prohibitions that still exist are constitutional. The U.S. Supreme Court has muddied the waters by issuing ambiguous decisions.

Chief Justice Rehnquist had always stood practically alone in opposing extending the First Amendment to cover pure commercials. But in 1986, in the Posadas case, he convinced four other justices to join him in upholding a Puerto Rican law, which barred casinos from advertising "to the public of Puerto Rico."

Rehnquist wrote that if a government can outlaw a product or service, such as gambling, it has the right to do anything short of outlawing, such as restricting the right to advertise. This is like saying if you can execute a person for murder, you can do anything else to him, such as torture or mutilation.

The Posadas decision came under immediate attack, because it was so clearly wrong. A state might have the death penalty, but it still cannot impose cruel or unusual punishments. A government might have the right to outlaw a vice, but once it has made it legal, the state cannot cut off producers’ First Amendment rights.

Within ten years the Supreme Court reversed the Posadas standard, though not the case itself. The decisions involved restrictions on the advertising of alcoholic beverages. Four of the justices held there was no special rules for "vices." All justices agreed every government restriction on advertising could be tested to see whether the restriction was constitutional.

The most important restrictions are the federal anti-lottery laws. Congress has been passing laws against lotteries as far back as 1827. When radio was invented, it was natural for Congress to include prohibitions on lottery broadcasts in the federal laws regulating broadcasts.

Although state lotteries, Indian gaming, charity bingo and some other forms of gambling have won exemptions, the general ban on lottery ads has stuck. More unfortunately, federal courts have decided that any game with prize, chance and consideration is a "lottery." All casino games are lotteries, under this definition.

The Ninth Circuit Court of Appeals, which hears all federal cases from the western U.S., decided this ancient anti-lottery law is unconstitutional when applied to Nevada casino commercials broadcast from Nevada. The government said its goal was to discourage public participation in "commercial lotteries." But, the Court noted, Indian casinos are allowed to advertise over the airwaves. In fact, there are so many exemptions that the prohibition on Nevada casino commercials was irrational.

Federal District Judge Rodriguez in New Jersey ruled the same way as to commercials for Atlantic City casinos. The suit was brought by Players International, the National Association of Broadcasters, and stations from all over the country.

The government argued that casinos caused social ills. But Judge Rodriguez did not buy the idea that casino commercials led to compulsive gambling, especially when so many other forms of gambling can legally advertise.

So what happened in New Orleans? Both the trial judge and the Fifth Circuit Court of Appeals ruled the prohibition on casino commercials was constitutional.

When the case got to the U.S. Supreme Court, the high Court ordered the Fifth Circuit to re-read the cases involving liquor ads and to reconsider.

In an unexpected decision, the Fifth Circuit stuck to its guns. In a two-to-one opinion, the Court held that a national ban on casino commercials was constitutional. The Fifth Circuit said that distinctions could be made among certain kinds of gambling: "state-run lotteries, Indian and charitable gambling include social benefits as well as costs." Because airwaves do not stop at state borders, the only way to protect the residents of Texas, which has no casinos, from hearing commercials for Louisiana’s morally suspect commercial casinos is to prevent those broadcasts in the first place.

The case is presently on appeal to the U.S. Supreme Court. The high Court has only two choices: hear the case and decide whether the Ninth Circuit or the Fifth Circuit is correct, or reverse and allow all licensed casinos in the nation to advertise.

Recent Articles
Best of I. Nelson Rose
I. Nelson Rose

Professor I. Nelson Rose is an internationally known scholar, public speaker and writer and is recognized as one of the world's leading authorities on gambling law. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law.

Professor Rose is the author of more than 300 books, articles, book chapters columns. He is best known for his internationally syndicated column, "Gambling and the Law ®," and his landmark 1986 book by the same name. His most recent book is a collection of columns and analysis, co-authored with Bob Loeb, on Blackjack and the Law.

A consultant to governments and industry, Professor Rose has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, and has acted as a consultant to major law firms, international corporations, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas and the federal governments of Canada and the United States.

With the rising interest in gambling throughout the world, Professor Rose has spoken before such diverse groups as the F.B.I., National Conference of State Legislatures, Congress of State Lotteries of Europe, United States Conference of Mayors, and the National Academy of Sciences. He has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.

He is the author of Internet Gaming Law (1st & 2nd editions), Blackjack and the Law and Gaming Law: Cases and Materials.

I. Nelson Rose Websites:

www.gamblingandthelaw.com

Books by I. Nelson Rose:

Compulsive Gambling and the Law

> More Books By I. Nelson Rose

I. Nelson Rose
Professor I. Nelson Rose is an internationally known scholar, public speaker and writer and is recognized as one of the world's leading authorities on gambling law. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law.

Professor Rose is the author of more than 300 books, articles, book chapters columns. He is best known for his internationally syndicated column, "Gambling and the Law ®," and his landmark 1986 book by the same name. His most recent book is a collection of columns and analysis, co-authored with Bob Loeb, on Blackjack and the Law.

A consultant to governments and industry, Professor Rose has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, and has acted as a consultant to major law firms, international corporations, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas and the federal governments of Canada and the United States.

With the rising interest in gambling throughout the world, Professor Rose has spoken before such diverse groups as the F.B.I., National Conference of State Legislatures, Congress of State Lotteries of Europe, United States Conference of Mayors, and the National Academy of Sciences. He has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.

He is the author of Internet Gaming Law (1st & 2nd editions), Blackjack and the Law and Gaming Law: Cases and Materials.

I. Nelson Rose Websites:

www.gamblingandthelaw.com

Books by I. Nelson Rose:

Compulsive Gambling and the Law

> More Books By I. Nelson Rose