A federal appeals court has found a Pennsylvania gaming law violated free speech protections and equal protection rights. The law in question aimed to bar campaign contributions from individuals holding ownership stakes in businesses with gaming licenses.
The Third Circuit in Philadelphia found the gaming law’s ban, meant to prevent pay-to-play government corruption, was not narrow enough, Law360 reports.
U.S. Circuit Judge Richard Nygaard‘s opinion acknowledged that the government must fight corruption and even the perception of corruption.
He added, though, “But when it acts it must be mindful of the fundamental speech and associational rights guaranteed by the First Amendment of the United States Constitution at stake.”
Challenge to ban brought by two in the casino business
The legal challenge was brought by Pasquale Deon Sr., a shareholder in the company that owns the former Sands Bethlehem casino, and Maggie Hardy Knox, who owns Nemacolin Woodlands Resort, which is licensed as Lady Luck Casino Nemacolin. The Sands has since changed hands and is now named Wind Creek Casino.
Deon is chairman of the Southeastern Pennsylvania Transportation Authority, which provides public transit in the Philly region. Knox is CEO of 84 Lumber Co. They had a long history of political donations until PA legalized casinos in 2004.
Other gaming interests joined in challenging ban
Joining in amicus briefs challenging the law were also:
- Greenwood Gaming and Entertainment, which operates Parx Casino and Racetrack
- Downs Racing, which operates Mohegan Sun Pocono
- Stadium Casino, which is developing Live! Casino in Philadelphia
- The related Penn National and Mountainview Racing, which operates Hollywood Casino and a related horse track in Grantville, PA
Ban unfairly prevented small contributions
The original ban focused on preventing corruption via large contributions. But the Pennsylvania Supreme Court struck down the provision in 2009. The state court found the law unfairly prevented small contributions deemed “unlikely to affect public confidence.”
PA legislators then drafted a new version. But Deon and Knox challenged the revised law in 2017.
A U.S. District judge found the new law was too broad. That ruling led to the rejected appeal decided last week.
PA law deemed extreme
The Third Circuit found Pennsylvania’s ban on all contributions from those in the gaming industry extreme.
The opinion released last Friday found that 19 of the 25 states with legalized gambling imposed no limits on individuals with connections to the gaming industry.
Of the remaining six states, only New Jersey and Louisiana had a ban that went as far as Pennsylvania’s, found the opinion, which went on to say:
“This fatally undermines the commonwealth’s central premise that the nature of gaming industry-related corruption creates a ‘common sense’ need to adopt measures of the breadth of the act.”
Law360 said a state gaming spokesman declined to comment.
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