Appeals Court: Gaming Industry Licensees In PA OK To Fund Candidates

Pennsylvania officials enacted a broad ban on casino industry campaign contributions in 2004, and federal judges say they went too far.
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State legislators who passed the 2004 law giving birth to Pennsylvania’s casino industry sought to reduce prospects for corruption by banning political contributions from gaming-licensed individuals.

They went too far, a federal appeals court has determined.

The U.S. Third Circuit Court of Appeals took the same position in a ruling Friday as did federal Judge Sylvia Rambo in September 2018. She struck down as unconstitutional the provision in the gaming law banning contributions of any amount to political campaigns by individuals with state gaming licenses, and the Third Circuit judges rejected the state’s appeal.

The appeals court noted that Pennsylvania was one of just a few states with commercial casinos that had enacted such a far-reaching ban.

Fundamental free speech rights take precedent

“It is axiomatic that a democratic government must make every effort to fight corruption and perception of it, to protect the integrity of its electoral, legislative, and regulatory processes,” said the opinion written by Judge Richard Nygaard.

“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.”

The case, Deon v. Barasch, was brought against the state by Pasquale Deon Sr., a Bucks County businessman who was a shareholder in Sands Pennsylvania Inc., and Maggie Hardy Magerko, the beneficiary of a trust that owns Nemacolin Woodlands Inc. Both had regularly been campaign contributors prior to the 2004 law and creation of casinos to which they were connected.

They argued their free speech rights were being violated by a law that threatened them with criminal misdemeanor charges and minimum $100,000 fines if they financially supported political candidates.

In her original opinion, Rambo wrote that even if the “stated purpose of the law is legitimate and commendable,” it was too broad.

The state attorney general’s office argued once more on appeal that preventing political corruption served as a legitimate government interest supporting the need for the restriction.

The appellate court was not convinced that the state’s purpose outweighed individual rights, particularly in light of how most other states handle the issue.

“In fact, the overwhelming majority of states with commercial, non-tribal casino gambling like Pennsylvania do not have any political contribution restrictions that apply specifically to gaming industry-related parties,” Nygaard’s opinion stated.

Photo provided by Shutterstock

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