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Legal Principle at Issue

Whether a federal law banning truthful, nonmisleading broadcast ads of private casino gaming violates commercial free-speech rights.

Action

Reversed. Petitioning party received a favorable disposition.

Facts/Syllabus

The Greater New Orleans Broadcasting Association, a non-profit trade association of various radio and television broadcasters in the New Orleans area, challenged the federal law banning broadcast advertisements of casino gaming. The law, 18 U.S.C. _ 1304 prohibits the broadcasting of "any advertisement of any lottery, gift enterprise, or similar scheme, offering prizes dependent in whole or in part upon lot or chance." The lower federal courts upheld the law, ruling that it did not violate the First Amendment under the U.S. Supreme Court's commercial speech doctrine.

In order for a regulation of commercial speech to survive constitutional review, the regulation must directly and materially advance the government's substantial interests in the regulation. The government must demonstrate that the harms the speech- restriction advances are real and that the restriction will alleviate them in to a "material degree." The government cannot satisfy its constitutional burden by citing speculative harms.

Importance of Case

The effect of a restriction on commercial speech must be evaluated in the context of the entire regulatory scheme. If such a scheme is saddled with contradictory provisions or an "overall irrationality," the government cannot show that the speech restriction directly and materially advanced its interests. Restrictions which allow government officials to selectively regulate certain speakers while allowing speakers with similar messages to communicate without regulation are in "serious tension" with First Amendment principles.