Opinion #6669

The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)

STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6669

December 18, 1990

ADVERTISING:

Bingo--prohibition against broadcast advertising

CONSTITUTIONAL LAW:

Freedom of speech--prohibition against broadcast advertising of bingo games

GAMBLING:

Bingo--prohibition against broadcast advertising

The blanket prohibition against broadcast advertising of lawful bingo activities contained in the third sentence of Rule 432.116(1) constitutes an impermissible restraint upon the freedom of commercial speech in violation of the First Amendment to the United States Constitution.

Honorable Lewis N. Dodak

State Representative

The Capitol

Lansing, Michigan

You have requested my opinion regarding a rule of the State Lottery Commissioner which permits newspaper advertising but prohibits broadcast advertising of bingo games by organizations licensed under the Traxler-McCauley-Law-Bowman Bingo Act, 1972 PA 382, MCL 432.101 et seq; MSA 18.969(101) et seq. Your letter indicates that this question has taken on new significance because the federal prohibition on broadcast advertising of bingo has been removed. You have asked whether that rule, 1984 AACS, R 432.116(1): (A) is preempted by federal law; (B) violates the Equal Protection Clause of the United States Constitution; or (C) violates the First Amendment of the United States Constitution. In view of my conclusion that your third question should be answered in the affirmative, it is unnecessary to discuss your first two questions.

Rule 432.116 provides, in pertinent part, as follows:

"(1) Only a licensed organization shall advertise a bingo game. A landlord, hall owner, or agent shall not advertise a bingo event. The only advertising permitted is by newspaper advertisements, premises sign, community announcement bulletins, or organizational newsletters. The size and content restrictions specified in subrule (3) of this rule shall apply.

"(3) To provide the player with information about bingo games, newspaper, shopping guide, or organizational newsletter advertising is permitted with the following restrictions:

(a) The advertising shall be in 1 column which is 1 inch wide.

(b) The type size shall be not larger than 10 point.

(d) The name of the organization shall be in a type size equal to or larger than the name of the premises or hall.

(e) Only 1 advertisement per publication is allowed.

(f) The use of the word 'Bingo' is optional.

(g) The contents of the ad shall be listed in the following order:

(i) The full name of the organization.

(ii) The day of the week and time of the game.

(iii) The sale of charity game tickets.

(iv) The name of the hall or premises, address, and phone number.

Information other than that specified in paragraphs (i) through (iv) of this subdivision is not permitted in the ad." (Emphasis added.)

Authority for this rule is found in MCL 432.110(5); MSA 18.969(110)(5), which provides, in pertinent part:

"A licensee may not advertise bingo except to the extent and in the manner permitted by rule of the commissioner."

The rule is also authorized by MCL 432.113(1); MSA 18.969(113)(1), which generally requires the Commissioner to promulgate rules to implement the Bingo Act. Nothing in these statutory provisions requires a ban upon broadcast advertising.

Your third question is whether Rule 432.116(1) violates that portion of the First Amendment which provides that "Congress shall make no law ... abridging the freedom of speech...." The First Amendment is applicable to state action through the Due Process Clause of the First Amendment. Virginia State Board of Pharmacy v Virginia Citizens Consumer Council, Inc, 425 US 748, 749, n 1; 96 SCt 1817; 48 LEd2d 346 (1976).

The advertisement of lotteries is commercial speech. Edge Broadcasting Co v US, 732 FSupp 633, 636-638, (E.D.Va 1990). Accordingly, the advertisement of bingo would also be commercial speech. As such, Rule 432.116(1) must be analyzed in light of the four-part test for evaluating First Amendment commercial free speech challenges to governmental regulation, which is set forth in Central Hudson Gas & Electric Corp v Public Service Commission of New York, 447 US 557; 100 SCt 2343; 65 LEd2d 341 (1980). Beginning its seminal analysis of the doctrine for later decisions, the Court noted:

"Nevertheless, our decisions have recognized 'the "commonsense" distinction between speech proposing a commercial transaction, which occurs in an area traditionally subject to government regulation and other varieties of speech.' The Constitution therefore accords a lesser protection to commercial speech than to other constitutionally guaranteed expression. The protection available for particular commercial expression turns on the nature both of the expression and of the governmental interests served by its regulation." 447 US at 562, 563. (Citations omitted.)

The Court then identified the four-part test:

"In commercial speech cases, then, a four-part analysis has developed. [1] At the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. [2] Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine [3] whether the regulation directly advances the governmental interest asserted, and [4] whether it is not more extensive than is necessary to serve that interest." 447 US at 566.

The Michigan Court of Appeals applied this test to declare unconstitutional certain Liquor Control Commission rules banning the advertisement of the prices of alcoholic beverages. Beer & Wine Ass'n v Attorney General, 142 MichApp 294, 302-304, 309-312; 370 NW2d 328 (1985), lv den 424 Mich 878 (1986).

The United States Supreme Court recently modified the fourth Central Hudson factor. In Board of Trustees v Fox, 492 US ---; 106 LEd2d 388; 109 SCt 3028 (1989), the Court noted: "Our cases have repeatedly stated that government restrictions upon commercial speech may be no more broad or no more expansive than 'necessary' to serve its substantial interests...." 106 LEd2d at 401. (Citations omitted.) However, after extensive discussion, the Court concluded:

"In sum, while we have insisted that ' "the free flow of commercial information is valuable enough to justify imposing on would-be regulators the costs of distinguishing ... the harmless from the harmful," ' we have not gone so far as to impose upon them the burden of demonstrating that the distinguishment is 100% complete, or that the manner of restriction is absolutely the least severe that will achieve the desired end. What our decisions require is a ' "fit" between the legislature's ends and the means chosen to accomplish those ends'--a fit that is not necessarily perfect, but reasonable; that represents not necessarily the single best disposition but one whose scope is 'in proportion to the interest served,' that employs not necessarily the least restrictive means but, as we have put it in the other contexts discussed above, a means narrowly tailored to achieve the desired objective. Within those bounds we leave it to governmental decision-makers to judge what manner of regulation may best be employed." Id at 403-04. (Citations omitted; emphasis added.)

For purposes of this opinion, it is assumed but not decided that the commercial speech here in question concerns a lawful activity and is not misleading, that the asserted governmental interest is substantial, and that the rule in question directly advances the governmental interest. The statutorily asserted governmental interest is that bingo games "shall be conducted in a friendly, social, and noncommercial manner." MCL 432.113(3); MSA 18.969(113)(3).

Rule 432.116(1) permits bingo advertising in newspapers. However, the rule contains substantial restrictions on the frequency and content of printed media advertising. In contrast, the same rule has an absolute ban on bingo advertising in the broadcast media. This absolute prohibition on broadcast advertising is clearly not narrowly tailored to achieve the desired objective, especially when contrasted to the restrictions imposed on printed media advertising to achieve the goal of "friendly, social, and noncommercial" bingo games. With regard to newspapers, the rule employs a means narrowly tailored to achieve its objective. There is no reason broadcast advertising of bingo could not be permitted, with similar restrictions on frequency and content, to achieve the desired objective. Thus, it must be concluded that the ban on broadcast advertising of bingo fails the fourth Central Hudson factor, as modified by Fox, since it is not narrowly tailored to achieve the desired goal.

This conclusion is not altered by Posadas de Puerto Rico Assoc v Tourism Co of Puerto Rico, 478 US 328, 332, 340-343; 106 SCt 2968; 92 LEd2d 266 (1986), where the Court upheld a prohibition against local advertisement of gambling casinos established to promote tourism. The Court's rationale was that Puerto Rico could permit advertising to attract tourists to the gambling casinos while prohibiting advertising that would induce its own citizens to frequent the same casinos. The advertising prohibition was equally applicable to both the print and broadcast media. Thus, Posadas does not require or imply that Rule 432.116(1) be upheld.

It is my opinion, therefore, that the blanket prohibition against broadcast advertising of lawful bingo activities contained in the third sentence of Rule 432.116(1) constitutes an impermissible restraint upon the freedom of commercial speech in violation of the First Amendment to the United States Constitution.

Frank J. Kelley

Attorney General