Pennsylvania's Ban on Gambling Contributions Struck Down

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Sep/20/2018

HARRISBURG, Pa. (AP) — A federal judge on Wednesday struck down a Pennsylvania law that bars casino owners and others with a stake in the gambling industry from donating to political campaigns in the state, saying it is drawn so broadly that it is unconstitutional.

In her 31-page opinion, U.S. District Judge Sylvia Rambo said the provision violates constitutional protections over political association. However, Rambo did not close the door on lawmakers reviving a similar ban that is narrower in scope and tailored to the purpose of fighting corruption.

"The court holds only that the ban in its current form goes much further than necessary to achieve its stated purpose of eliminating corruption and the appearance of corruption," Rambo wrote.

The U.S. Supreme Court, Rambo wrote, has ruled that preventing corruption, or the appearance of corruption, is the only sufficient reason to justify restrictions on political contributions.

So the Legislature, she wrote, could more strictly define who is subject to the ban by limiting its reach to those with close connections to a casino or imposing a limit on the amount of cash contributions. Right now, law acts as a wholesale ban on contributions of any amount, even $1, by people with "even an attenuated connection" to the gambling industry, far exceeding the necessary scope of such a prohibition, Rambo wrote.

The ban applied to people who own a stake in a casino, a slot-machine manufacturer or a casino vendor, as well as non-owner executives and important employees.

The prohibition has largely stood in Pennsylvania since the state legalized commercial casinos in 2004, touted as a major bulwark against gambling industry influence. A spokesman for the state attorney general's office directed questions to the Pennsylvania Gaming Control Board. A spokesman at the board did not respond to a request for comment.

The lawsuit was filed last year by Pasquale Deon, who owns a 2.5 percent stake in Sands Casino in Bethlehem, according to gaming board records, and Maggie Hardy Magerko, whose family owns the Nemacolin Woodlands Resort in southwestern Pennsylvania that is home to Lady Luck Casino.

Deon is a regular contributor to Republican campaigns for Congress. He also is a member of the Pennsylvania Turnpike Commission and is chairman of the Southeastern Pennsylvania Transportation Authority. Magerko's father, Joseph Hardy, founded Nemacolin and the 84 Lumber Company, and had been a prominent contributor to Republican campaigns before he applied for a casino license.

The provision had been struck down once before, in 2009, by the state Supreme Court, which said the practice banning all contributions went farther than the law's original wording that had targeted "large" campaign contributions. Lawmakers restored it months later, making it clear that they had intended to ban all contributions.

With 12 casinos operating and a 13th under construction, Pennsylvania is the nation's No. 2 state for commercial casino gross revenue, second to Nevada. At $1.4 billion in the most recent fiscal year, Pennsylvania rakes in more tax revenue from casino gambling than any other state, according to the American Gaming Association's figures.

By MARC LEVY, Associated Press

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