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Sands Suing For Right To Make Unlimited Political Contribution

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Gambling is big business in Pennsylvania. In fact, the Pennsylvania Gaming Control Board (PGCB) estimates the state’s 12 casinos generate approximately $1.4 billion in tax revenue annually.

Big business and billions in taxes normally equals big influence over state government. However, that’s not necessarily the case when it comes to Pennsylvania casino industry. Because the one thing the local gambling industry can’t do is contribute to the political campaigns of elected officials.

Other businesses can make unlimited donations under Pennsylvania’s campaign finance law. However, there is a ban on political contributions made by anyone involved in the gambling industry.

In 2009, the State Supreme Court tossed out the state’s ban, which initially outlawed large campaign contributions from within Pennsylvania’s gambling sector.

PA casino campaign contributions ban previously overturned

One of the investors in the failed Foxwoods Philadelphia project claimed it was unconstitutional. The court said the ban helped prevent corruption. However, it infringed on the investor’s free speech rights. The court also suggested a law that limited the size of the contributions would be better.

Instead, state lawmakers just removed all references to contribution size and restored the ban outright.

Now, a shareholder in one of the state’s largest casinos, and the director of one of its smallest, are suing to overturn it.

Pasquale Deon Sr., a shareholder in Sands Casino Resort Bethlehem, filed a lawsuit in federal court in August. The suit claims the ban infringes on his rights to free expression, free association, and equal protection under the U.S. Constitution.

Maggie Hardy Magerko, a beneficiary of the trust that owns Lady Luck Casino Nemacolin, joined the suit in October.

Ban called discriminatory

The suit calls the ban discriminatory. It claims Pennsylvania cannot say contributions from the gambling industry open it up to corruption when it authorizes unlimited contributions from businesses outside of it.

The suit names members of the PGCB and Attorney General Josh Shapiro as defendants. In a response filed in November, PGCB lawyers denied the allegations. They claim any burden the ban places on Deon and Magerko is a minimal one. It also claimed the board and state are immune to the suit.

A conference has been scheduled for this month by U.S. District Judge Sylvia Rambo. However, no trial date has been set.

Similar campaign bans in other states have been challenged, but the courts have not reached a consensus on whether the restrictions are constitutional or not.

New Jersey law prevents casino managers and corporate owners from making direct or indirect campaign donations. This ban was upheld by the courts. Maryland law prevents donations from anyone with a 5 percent interest in a casino or more. Michigan and Louisiana have similar restrictions.

In Nevada, home to the largest casino industry in the country, casino license holders and casino workers’ unions are permitted to make political campaign contributions. As a result, the state’s casino industry has become a big part of the political process.

Lobbying still legal

In Pennsylvania, officials say the ban is in place to prevent corruption in the gambling business and avoid the appearance of donations influencing casino licensing. However, lobbying from the casino sector is still legal. In fact, the Allentown Morning Call newspaper says state records show the casino industry spent $4.3 million on lobbying in the first three quarters of this year alone.

This would suggest efforts to buy influence are still being made, even if the state currently prevents direct political contributions from anyone inside the PA gambling sector.

Marty Derbyshire

About

Martin Derbyshire has more than ten years of experience reporting on the poker, online gambling, and land-based casino industries for a variety of publications including Bluff Magazine, PokerNews, and PokerListings. He has traveled extensively, attending tournaments and interviewing major players in the gambling world.