Statutory Basis for Restrictions on Gambling Advertising

Current restrictions limit the scope of advertising allowed by gambling facilities, but do not completely ban it. For example, casinos are allowed to advertise their restaurant and entertainment venues but not their gambling activities. Native American tribes, church bingo nights, and state-run lotteries are permitted to advertise gambling.

Supporting a Restriction on Advertising The reason for the uneven restrictions on gambling advertising stems from differing interpretations of First Amendment protections, as well as exemptions granted in regulatory statutes. The rationale for existing prohibitions is complex, but rests on two assumptions: first, the federal prohibition on commercial gambling advertising assumes that casino gambling has a causal relationship with social ills; and 47 second, that advertising increases gambling behavior both by enticing people to do more gambling than they otherwise would do and by recruiting people to gamble who otherwise might not.

The Foundation for the Ban: The Federal Communications Act
The Federal Communications Act of 1934 was the first attempt to provide a statutory basis for restrictions on gambling advertising. Although the Act has been significantly changed and a number of exceptions added, there continue to be federal restrictions on many forms of gambling advertising. The Federal Communications Act prohibited lottery advertisements, extending an earlier prohibition on the use of the U. S. Postal Service to radio. 48 As a result, Title 18 of the United States Code �04 provides:

Whoever broadcasts by means of any radio or television station for which a license is required by any law of the United States, or whoever, operating any such station, knowingly permits the broadcast of, any advertisement of or information concerning any lottery, gift enterprise, or similar scheme, offering prizes dependent in whole or in part upon lot or chance, or any list of the prizes drawn or awarded by means of any such lottery, gift enterprise, or scheme, whether said list contains any part or all of such prize, shall be fined under this title or imprisoned not more than one year, or both.

The Federal Communications Commission (FCC) is the agency authorized to enforce Title 18. 49 In that capacity, the FCC implemented regulation 47 C. F. R. �.121 prohibiting broadcasting advertising of any “lottery, gift enterprise, or similar scheme.” Title18 states, in part:
(a) No license of an AM, FM, or television broadcast station… shall broadcast any advertisement of or information concerning any lottery, gift enterprise, or similar scheme, offering prizes dependent in whole or in part upon lot or chance, or any list of the prizes drawn or awarded by means of any such lottery, gift enterprise, or scheme, whether said list contains any part or all of such prizes.

A number of exceptions undercut the original sweeping scope of the Act. The exceptions include state lotteries, 50 fishing contests, 51 gambling conducted by an Indian Tribe pursuant to the Indian Gaming Regulatory Act, 52 a lottery, gift enterprise or similar scheme by a not-for-profit organization or a governmental organization 53 or conducted as a promotional activity by a commercial organization. 54 Additional exceptions include horse racing and off-track betting. 55

47 988 F. Supp 497 (D. N. J. 1997). 48 See Anthony N. Cabot, et al., supra note 2 at 51-80. 49 FCC rule 73.1211. See 47 C. F. R. �.213 50 (18 U. S. C. 1307 (a); 102 Stat. 3205). 51 18 U. S. C. 1395. 52 25 U. S. C. 2701 et seq. 53 (18 U. S. C. 1307 (a); 102 Stat. 3205). 54 Ibid. 55 41 F. C. C 2d 172 (1973) and 47 U. S. C. �7. 13