Greater New Orleans Broadcasting v. U.S., et al. (06/14/1999)

By: Melissa Galin, Medill News Service

Questions presented

Does a federal statute prohibiting the broadcasting of advertisements for ""any lottery, gift enterprise, or similar scheme"" violate the 1st Amendment as applied to broadcast advertisements for legal casino gambling?

Brief

A group of broadcast stations in Louisiana and Mississippi say prohibiting television and radio advertisements for casinos in states where gambling is legal could set a dangerous precedent. And they argue banning such ads will not really keep people from gambling anyway.

In 1994, the stations, collectively known as Greater New Orleans Broadcasting, filed suit in Eastern Louisiana District Court against the United States and the Federal Communications Commission seeking declaratory and injunctive relief from a federal statute that bans television and radio ads for private casinos. The stations claim the statute violates their 1st Amendment right to free speech.

The statute prohibits broadcast advertising of any ""lottery, gift enterprise or similar schemeÉoffering prizes depending in whole or in part upon lot or on chance."" Print ads for casinos as well as broadcast ads for state-run lotteries, charity games and Native American gambling sites, are not prohibited under the statute.

Greater New Orleans Broadcasting alleges the statute does not satisfy the following criteria for permissible regulation of free speech:® Does the speech concern a lawful activity and is it not misleading?® Is there a significant government interest in regulating the speech?® Does the provision directly advance this government interest?® Is the provision no more excessive than necessary to serve the governments purpose?

The government contends the ban on broadcast casino advertisements serves to lessen the social and economic costs associated with gambling. The statute also assists states that do not permit gambling in enforcing these anti-gambling laws, the government argues.

The government maintains that the ban directly accomplishes these goals by eliminating peoples exposure to images of gambling and therefore reducing public demand for these ""chance activities"". The fact that casino ads are still allowed in other forms of media illustrates that the statute is not more excessive than necessary, the government alleges.

Greater New Orleans Broadcasting contends that if preventing gambling is the goal of the governments statute, the ban as it stands is not a workable solution. The statute does not place a ban on billboard casino ads or ads for casinos in newspapers and magazines. Therefore, even with the ban in place, people are still exposed to images of gambling, the broadcasters argue.

The broadcasters also say that just because people dont see ads for casinos, it does not mean that people will not seek out gambling activities. A nation-wide ban on casino ads, in order to protect some non-gambling states is clearly too excessive, the broadcasters argue.

""This ban cant shield compulsive gamblers,"" says Michael Lamers, who represented Greater New Orleans Broadcasting in the lower courts. ""If you want to stop gambling, outlaw it.""

In 1996, the district court granted summary judgment in favor of the government, saying the statute meets the criteria for permissible regulation of free speech.

The 5th Circuit Court of Appeals affirmed. Greater New Orleans Broadcasting appealed to the U.S. Supreme Court. The Supreme Court vacated the decision in 1996 and remanded it to the 5th Circuit, in light of a decision in 44 Liquormart, Inc. v. Rhode Island. The Supreme Court in 44 Liquormart held that Rhode Island statutes prohibiting the advertising of retail liquor prices violated the 1st Amendment.

In 1998, the 5th Circuit once again ruled in favor of the government, finding the statute restricting casino ads to be a valid regulation of speech.

A divided appeals court held that the statute ""is in short, tailored to fit the stated purpose of controlling demand and does not unduly burden speech."" The court stated the prohibiting of broadcast casino advertisements reinforces the policies of states, such as Texas, that do not permit casino gambling. If the statute is invalidated, ""there will be no federal protection for non-casino gambling states and their citizens will be subject to the influence of broadcast advertising for privately owned casinos,"" the court reasoned.

The court stated that the statute is not more broad than necessary because it does not constitute a complete ban on casino ads. ""The ban is more analogous to a time, place and matter restriction,"" the court stated. Other media, including billboards, newspapers and magazines can still run the ads, the court noted. The court added that the statute does not prohibit advertisements for casinos that do not include references to gambling.

""The statute simply targets the powerful sensory appeal of gambling conveyed by television and radio, which are the most intrusive advertising media and the most readily available to children,"" the courts opinion stated. ""The government may legitimately distinguish among certain types of gambling for advertising purposes, determining the social impact of activities such as state-run lotteries, Indian and charitable gambling, include social benefits, as well as costs.""

In dissent, Chief Judge Henry Politz wrote that the statute failed to satisfy the requirements for permissible regulation of free speech. Politz said the statute did not directly advance the governments interests and was therefore overbroad.

Lamers says the ban paves the way for the government to prohibit ads for other legal activities that may come to be regarded as undesirable.

""This regulation seriously undermines the key principles of the 1st Amendment,"" Lamers says. ""This type of ban goes right to the heart of commercial speech.""

Greater New Orleans Broadcasting's petition for certiorari to the U.S. Supreme Court was granted on January 15, 1999.

On, June 14, 1999, the Court unanimously struck down the broadcasting ban on casino gambling advertising in states where such gambling is legal.Writing for the Court, Justice John Paul Stevens criticized the ban for being ""so pierced by exemptions and inconsistencies that the government cannot hope to exonerate it"" by claiming that it was trying to alleviate the social costs of casinos by limiting demand.

Though the Court limited its holding to bans in states where casino gambling itself is legal, Stevens also wrote broadly, ""The federal policy of discouraging gambling in general, and casino gambling in particular, is now decidedly equivocal.""

Stevens also noted that the Federal Communications Commission ""has permitted broadcasters to tempt listeners and viewers with claims of 'Vegas-style excitement'"" and to use the word ""casino"" if the word is part of the establishment's name. Until the Court's ruling, casinos would often run ads that would flaunt everything from their meals to the freindly nature of their employees, everything but the gambling.