Even though Texas generally outlaws gambling, it does allow bingo halls to operate, subject to some restrictions. One of these is that bingo halls can't use their proceeds from bingo for political advocacy.
A group of nonprofit organizations licensed to conduct bingo sued the state lottery commission, alleging that the restrictions unconstitutionally burden their freedom of speech.
A Subsidy or a Licensing Scheme?
Here we have bingo games being granted a license to operate by the state on the condition that they don't use their profits for political speech. The outcome of the case basically flows with how the bingo scheme is characterized. It's either as a subsidy which can freely be granted or withheld for any number of reasons, or a grant of a license, which can't be unconstitutionally withheld. This was the primary disagreement in Department of Texas v. Texas Lottery Commission.
The majority opted to see the bingo system as the latter. The state doesn't fund the bingo games, didn't establish them, and doesn't run them. It just licenses them. As such, the state's grant of a license is subject to strict scrutiny.
You've seen this movie before: the majority didn't find any of the state's interests in regulating gambling, promoting charities, or combating fraud to be "compelling." And even if they were, the blanket prohibition on all political speech wasn't narrowly tailored to achieving those ends.
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Three judges dissented, disagreeing with the majority's characterization of the bingo regulations. Instead of an affirmative right, the dissent noted that bingo -- as with all gambling -- is generally seen as a vice, and allowing gambling is the exception, rather than the rule. To that end, the charitable organizations are prohibited from using bingo earnings -- but not any other earnings -- for political speech.
The same three judges, in another dissent, would have found that the bingo regulations were a subsidy and thus not subject to the same constitutional requirements as a license. Another example of how framing the issue can be so important. Here, once the issue was framed, the analysis and conclusion were set. So how will the Supreme Court frame the issue when it reaches 1 First Street?
- Obama administration proposes new rule that would rein in political activity of nonprofits (The Washington Post)
- Limit on Speech-Related Use of Bingo Proceeds by Charities Constitutional (Nonprofit Law Prof Blog)
- Arbitration, Sentencing, Speech; SCOTUS Saving Best for Last (FindLaw's U.S. Supreme Court Blog)
- Bingo: Texas Lottery Commission Wins Free Speech Appeal (FindLaw's U.S. Fifth Circuit Blog)