Confusion creeps into celebration over lifting of casino ad ban

Tuesday, June 15, 1999

First came the cheering from the First Amendment community about yesterday’s Supreme Court’s decision to strike down the federal ban on the broadcast advertising of gambling casinos.

And then came the confusion.

Just how far did the court’s unanimous decision in Greater New Orleans Broadcasting Association Inc. v. U.S. reach?

Did it apply only in the 11 states where commercial casinos now operate, as the opinion’s text seemed to suggest? Or could casinos also be advertised in the 28 states where Indian casinos or bingo operations operate? And, given the decision’s rationale, which said that the ban on casino advertising violated the First Amendment, why shouldn’t the lifting of the ban be nationwide?

“I’ll bet there will be a lot of scratching of heads at the FCC over this,” said P. Cameron DeVore, the leading expert on commercial-speech rights who represented broadcasters and advertisers in the Greater New Orleans case. He was referring to the Federal Communications Commission, which has the job of enforcing the 65-year-old ban on casino advertising, or what is left of it.

The Associated Press quoted the American Gaming Association as arguing that the court’s opinion meant that casinos could be advertised in all 50 states. But Daniel Troy, a lawyer for the American Advertising Federation, was quoted as saying that casinos would be taking a risk to advertise in non-casino states, though he added that the ruling almost invited a challenge to expand the ruling to non-casino states.

But debating over the precise scope of the decision did not detract from the celebration in the First Amendment community over the unanimity of the decision. Past commercial- speech rulings had often produced fractured majorities, noted Nory Miller, one of the lawyers for Greater New Orleans. Now, the court seemed united in strong support for commercial speech and in skepticism toward government justifications of speech restrictions.

The Clinton administration had defended the law as part of the government’s effort to shield compulsive gamblers from the lure of casinos. With all that has happened since the 1934 act was passed, Justice John Paul Stevens said, “the federal policy of discouraging gambling in general, and casino gambling in particular, is now decidedly equivocal.”

Even Chief Justice William Rehnquist, who once authored a ruling approving restrictions on casino advertising in Puerto Rico, wrote a concurring opinion in Greater New Orleans asserting that when government regulates commercial speech in a piecemeal way, it must meet a “higher standard” of review. The casino ad ban did not meet the standard, he concluded.

In the main opinion, Stevens said the ban was so “pierced by exemptions and inconsistencies” that it could not fulfill its stated purpose of minimizing the social effects of gambling.

As a result, he said the law was an impermissible restriction on the free-speech rights of casino operators. The ban was first enacted in 1934, but over the years, exceptions have been carved out allowing advertising for Indian casinos as well as for state lotteries and gambling at sports events such as dog racing and jai alai. The law was challenged by New Orleans broadcasters seeking to advertise commercial casinos in Louisiana and Mississippi. A federal appeals court upheld the law.

Commercial-speech advocates had hoped the court would go even further in yesterday’s ruling and jettison the so-called “Central Hudson” test for commercial speech, derived from the 1980 decision Central Hudson Gas & Electric Corp. v. Public Service Commission The four-part test looks at whether the restriction on commercial speech effectively advances a substantial government interest and whether the advertising is lawful or misleading. Media advocates would prefer a more direct test that gives commercial speech the same protection as most other kinds of speech.

But Stevens said the court did not need to “break new ground” to strike down the federal law, so he preferred to examine the law under the Central Hudson test. The law failed particularly on the question of whether it advanced a substantial government interest, the court said.

Minimizing the social cost of gambling was a “substantial” interest, Stevens agreed, but the law, with all its exceptions, could no longer be said to advance it.

“Decisions that select among speakers conveying virtually identical messages are in serious tension with the principles undergirding the First Amendment,” Stevens wrote.

Justice Clarence Thomas also wrote separately to indicate he would have scrapped the Central Hudson test and struck down the federal law simply because its goal was illegitimate.

In addition, some experts saw much in the Greater New Orleans decision that could influence the debate over tobacco and alcohol advertising. The tobacco industry has ceded some of its commercial-speech rights in its deals with various states, and the 1970 ban on tobacco advertising over the air was self-imposed. But the decision may prove useful in some ongoing litigation over billboard advertising.

And if anyone wanted to bring the Marlboro Man back to the airwaves, the Greater New Orleans decision could provide all the ammunition necessary.