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Rod Smith
 

Nevada Gaming Commission: Hard Rock Action Wins Praise

27 September 2004

Attorneys hailed a Nevada Gaming Commission's Friday decision to dismiss two complaints against the Hard Rock Hotel arising from its sexually suggestive advertisements as a victory for the hotel-casino and the First Amendment.

In dividing the complaint against the company, however, the commission decided to proceed to trial Nov. 18 on a single procedural complaint claiming the company reneged on its promise to run all of its advertising through a hotel compliance committee.

Still, the ACLU of Nevada's general counsel, Allen Lichtenstein, called it a landmark day for the First Amendment after the commission used the Hard Rock case to establish the principle that the state's gaming regulations cannot go beyond what is constitutionally permissible, despite arguments to the contrary by Attorney General Brian Sandoval's office.

"Even though there was some discussion that this wasn't about free speech, that's what it really was about. They dismissed (the counts in question) because these ads can't be constitutionally censured," Lichtenstein said.

One of the ads that sparked the original complaints against the Hard Rock showed a naked man and woman lying atop a gaming table with dice by their sides and a card in her mouth. The ad's tagline said: "There's always an urge to cheat."

Another ad showed a truck driver at the Hard Rock pool surrounded by four women. The headline read: Rehab with the "R" shaped like the prescription drug symbol. Critics claimed the ad suggested illegal prescription drug use and adultery.

Senior Deputy Attorney General Toni Cowan, who represented state gaming regulators, argued the ads glorified illegal behavior, even though she admitted they were not obscene and did not seek to entice people to violate the law.

She argued the ads were all-out attempts to pitch the Hard Rock's edgy message to customers and that they clearly concerned illegal activity.

"Hard Rock maintains the ads should be allowed because they're satire. Our position is these (regulator arguments) are just excuses," Cowan said.

Commission Chairman Peter Bernhard and the four other commissioners argued, however, that there is nothing illegal about lying on a stack of chips, using prescription drugs or, under some circumstances, having more than one wife.

"If both (parties) agree the ads are not deceptive and are not obscene and do not entice illegal conduct, what authorizes the sanctions," Bernhard asked rhetorically.

Further, they said, there is nothing illegal about depicting such activity and that censoring such advertising would violate constitutional protections for commercial free speech.

Cowan argued that any advertising showing illegal activity should be banned for bringing disrepute on the gaming industry.

Jeff Silver, a partner at Gordon and Silver, who represented the Hard Rock, pointed out that the Nevada Resort Association represented the industry. He said the association had filed a friend of the court brief supportive of the Hard Rock and never complained that the ads damaged the industry's reputation.

He also said case law does not support the argument that government agencies have the right to impinge on due process or the free speech rights of gaming licensees in Nevada.

Taking the state's argument to such an extreme conclusion would amount to a ban on political speech, which Silver, Bernhard and the other commissioners said clearly was unconstitutional and not the purpose of state regulations.

Bernhard, in making final arguments before the commission voted, said the real key to Friday's decision was not the constitutional arguments but the need to protect his agency's regulatory purposes.

State law says the Gaming Commission is responsible for maintaining the public's confidence and trust while licensing gaming operators and ensuring the industry is free from criminal and corruptive elements.

It also says public confidence and trust can only be maintained by strict regulation of all licensed gaming operations.

However, Bernhard said, "Our regulation has to be construed in a way that fits with the Constitution and also furthers the purposes of the commission."

Bernhard was particularly disturbed by the case brought against Hard Rock by the attorney general's office and the Gaming Control Board, because it was the first time sanctions had been proposed against a casino because of its advertising content rather than the company's conduct.

He said the entire intent of the regulations was to protect the public against false and misleading advertisements, and there was nothing false or misleading in the Hard Rock advertisements.

Silver applauded the commission's decision as a victory for his client and the First Amendment and said it was never his client's intent to violate any law or regulation.

Hard Rock owner Peter Morton, who was reluctant to discuss the specifics of the case, said he remains a strong believer in the power and importance of the First Amendment.

Bernhard urged the attorney general and Hard Rock to try to reach an agreement on the procedural complaint against the company before the November trial date.

Silver said Hard Rock is willing to pursue discussions but is also prepared to defend its position at the full evidentiary hearing.

The remaining procedural count involves the settlement of a 2003 case in which Cowan argued Hard Rock had promised to submit all advertising to its internal compliance committee.

Silver said the earlier case related only to ads for its in-house entertainment productions, not all of its advertising.

Bernhard said the rest of the case involved only agreed-upon facts and therefore did not need to proceed to a full evidentiary hearing.

Because the procedural complaint involves disputed facts, however, he said it can only be settled by an agreement between the parties or a full hearing.

Gaming lawyers said it is unlikely any settlement will be reached, given the extent to which the case had become a full blown battle over the constitutional rights of the gaming industry.

Nevertheless, Silver said his client's "gaming license has been placed in peril by the case and we must have a resolution of this issue one way or another as soon as possible."

Nevada Gaming Commission: Hard Rock Action Wins Praise is republished from Online.CasinoCity.com.