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Broadcast gambling and lottery advertising could be in for major changes.

Although the U.S. Supreme Court has set an unusually speedy schedule for arguments in the case filed by the Greater New Orleans Broadcasters Association challenging federal laws limiting broadcast gambling ads, quicker pressure on states to cut back on lottery ad spending could come from the National Gambling Impact Study Commission.

The nine-member commission, formed by Congress in 1996, begins discussing recommendations next week. But in a Jan. 12 speech before a gaming and lodging summit, commission Chairwoman Kay James put a target on the dollars spent by states on lottery advertising.

The 38 state lotteries budgeted nearly $200 million for advertising last year, International Gaming & Wagering Business reported in January.

"More troubling to me . . . are marketing practices targeting the poor, the notion of lottery gambling as a gateway to other forms of gambling, regressive taxation, and pervasive use and disproportionate spending for lotteries among lower income and minority communities," she said.


Ad groups, while concerned about potential state restrictions on lottery ads, are more worried the commission will go further. A recommendation to Congress blaming advertising for gambling could kick off a major legislative battle that could last for years to come.

"We think that is a real possibility," said Clark Rector, VP-state government affairs for the American Advertising Federation. "Our biggest concern is that the commission has not had any kind of background in the First Amendment, and what will happen when advertising comes up."

AAF and other ad groups have hired First Amendment lawyer P. Cameron DeVore, based in Seattle, to write a paper on First Amendment issues.

Hal Shoup, exec VP of the American Association of Advertising Agencies, said the commission's potential recommendation "will color the public perception of the [gambling ad] issue. What it says will receive a great deal of exposure."


Mr. Shoup said he fears subjective judgments will be included in the report, and that "advertising is going to be held responsible" for gambling addiction.

The Supreme Court, in the New Orleans case it agreed on Jan. 15 to hear, asked for written arguments that could allow the case to be heard and decided by June.

Ad groups contend this case could be the most significant for "free speech for advertising" in three years, and is likely to force the high court to clarify its 1996 decision overturning a Rhode Island law barring liquor price advertising.

That 44 Liquormart decision has been widely cited as limiting governments' attempts to curb commercial advertising. But the opinion was divided into three separate majorities on certain parts of the decision, and that has led to uncertainty about what the high court did and didn't mean.

The ad groups also suggest the high court's unwillingness to review a Nevada Valley Broadcasting case while agreeing to review the New Orleans case may indicate the court's leaning.


In the Valley Broadcasting case, one appellate court overturned federal gambling advertising rules and laws, while a different appellate court upheld the same rules and laws in the New Orleans case.

Both cases previously had been sent back to lower courts with a direction that they each be reconsidered in light of 44 Liquormart.

"You would have expected them to take the [Nevada] case if they thought the case was wrongly decided," said Dan Jaffe, exec VP of the Association of National Advertisers.

Those two gaming cases, and one in New Jersey, have left private casinos free to advertise gaming in eight Western states and in New Jersey, but not in other states.

Also still unclear is whether a high court decision or a final commission report will come first.

David Gale, executive director of the North American Association of State & Provincial Lotteries, said his group has "a real concern" about the commission, especially since it has no representatives from state lotteries.


"My hope is that the report will be presented in an objective way and look at all forms of gaming fairly and objectively," Mr. Gale said. "My fear is the report won't do that."

He said states do advertise responsibly and the choice of whether to use

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