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Ninth Circuit Valley Broadcasting Decision Strikes Down Federal Ban on Casino AdsBy Daniel E. Troy In a tremendous victory for commercial speech, the Ninth Circuit struck down a long-standing federal ban on the broadcast of private casino gambling ads. The ban was part of a broad statutory and regulatory scheme making it a criminal offense for a television or radio station to air advertisements for many types of gambling. In Valley Broadcasting Co. v. United States, the Ninth Circuit considered the statute's total ban on private casino gambling advertisements, which prohibited ads even in states where gambling was itself legal. The statute was challenged by two broadcasters operating television stations in Nevada, where casino gambling is legal, but who also reach some viewers in neighboring California and Utah, where casino gambling is illegal. In a nuanced analysis, the court carefully applied the four-prong Central Hudson test. First, the court noted that the regulated speech was neither illegal nor misleading. Second, the court considered the government's contention that the gambling ban served two "substantial interests": (1) discouraging public participation in commercial lotteries; and (2) assisting states that elect not to permit casino gambling. Although the Ninth Circuit found each interest "sufficiently substantial to meet the requirements of Central Hudson," it concluded that the casino gambling ad restriction was unconstitutional because it failed to satisfy Central Hudson's third prong -- whether the regulations directly advanced those interests. The Ninth Circuit relied heavily on Rubin v. Coors Brewing Co., where the Supreme Court in 1995 struck down a federal statute prohibiting brewers from disclosing alcohol content on beer labels. According to the Supreme Court, this restriction was "irrational" and did not directly advance the government's interest in avoiding "strength wars" because the regulatory scheme did not ban the disclosure of alcohol content in beer advertisements and on the labels of distilled spirits. Similarly, the anti-casino gambling statute contains a myriad of exceptions to permit the advertising of other commercial gaming activities, including state-run and charitable lotteries, fishing contests, and any gambling conducted by Indian tribes. Because of these exceptions -- most particularly for casino gambling by Indian tribes -- the Ninth Circuit found that "'there is little chance that [the challenged regulation] can directly and materially advance its aim, while other provisions of the same act directly undermine and counteract its effects'" (quoting Coors Brewing). Four years ago, in United States v. Edge Broadcasting Co., the Supreme Court upheld a part of the broad gambling advertising scheme which prohibited lottery advertisements by broadcasters licensed in states that do not permit lotteries. Though that scheme allowed ads in states permitting lotteries, it barred broadcast ads by stations in non-lottery states -- even when the primary audience was in a neighboring lottery state. The Court concluded that the prohibition was a reasonable means of supporting the policies of non-lottery states without interfering with the policies of lottery states. In reaction to the Ninth Circuit's well-reasoned analysis in Valley Broadcasting, the FCC stated that it will not enforce the federal advertising ban against stations licensed to communities within the Ninth Circuit, with the exception of the prohibition concerning state- run lotteries previously upheld in Edge Broadcasting.
Daniel E. Troy is a partner at the Washington, D.C. law firm of Wiliey, Rein & Fielding. He specializes in media law and appellate litigation, with an emphasis on the First Amendment. He is also an associate scholar at the American Enterprise Institute. |
Valley Broadcasting v. United States, 820 F. Supp. 519 (D. Nev. 1993), aff'd,
107 F.3d 1328 (1997).
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Rubin v. Coors Brewing Co., 115 S. Ct. 1585 (1995).
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