THE NINETEENTH DAY
Carson City(Friday), February 19, 1999
Senate called to order at 10:42 a.m.
President pro Tempore Jacobsen presiding.
Roll called.
All present.
Prayer by the Chaplain, Lieutenant John Van Cleef.
Gracious and loving Father, we thank You for the refreshing touch of this day, and are reminded that Your mercies are new to us this morning. We thank You for the winter rain that nourishes the earth, and are reminded that You are our portion. May we each pause to sense You in this day—in the magnificent and in the mundane. Bless the men and women of this Senate with Your discernment and grace. I pray also for their families, that You would strengthen and keep them while their loved ones serve the people of this state. To Him who sits on the throne we give glory and honor, forever and ever.
Amen.
Pledge of allegiance to the Flag.
Senator Raggio moved that further reading of the Journal be dispensed with, and the President pro Tempore and Secretary be authorized to make the necessary corrections and additions.
Motion carried.
REPORTS OF COMMITTEES
Mr. President pro Tempore:
Your Committee on Commerce and Labor, to which was referred Senate Bill No. 16, has had the same under consideration, and begs leave to report the same back with the recommendation: Do pass.
Randolph J. Townsend, Chairman
Mr. President pro Tempore:
Your Committee on Finance, to which was referred Assembly Bill No. 176, has had the same under consideration, and begs leave to report the same back with the recommendation: Do pass.
William J. Raggio, Chairman
MOTIONS, RESOLUTIONS AND NOTICES
Senate Concurrent Resolution No. 1.
Resolution read.
The following amendment was proposed by the Committee on Legislative Affairs and Operations:
Amendment No. 25.
Amend the resolution, page 2, between lines 5 and 6, by inserting:
“Resolved, That the committee to conduct the study consists of eight members of the 70th Legislative Session to be appointed as follows:
1. Three members of the Senate appointed by the Majority Leader of the Senate.
2. One member of the Senate appointed by the Minority Leader of the Senate.
3. Three members of the Assembly appointed by the Speaker of the Assembly.
4. One member of the Assembly appointed by the Minority Leader of the Assembly.
The Legislative Commission shall appoint the chairman of the committee; and be it further”.
Senator Porter moved the adoption of the amendment.
Remarks by Senator Porter.
Amendment adopted.
Resolution ordered reprinted, engrossed and to the Resolution File.
Senate Concurrent Resolution No. 2.
Senator Raggio moved the adoption of the resolution.
Remarks by Senator Raggio.
Resolution adopted.
Senator Raggio moved that all rules be suspended, reading so far had considered second reading, rules further suspended, Assembly Bill No. 176 declared an emergency measure under the Constitution and placed on third reading and final passage.
Remarks by Senator Raggio.
Senator Raggio requested that his remarks be entered in the Journal.
This bill was transmitted by the Assembly as an emergency measure and is in need of action by the Senate because of time constraints. It pertains to the appropriations to continue the Benefits Services Fund from the State General Fund and the State Highway Fund, suspending indefinitely the operation of the Committee on Benefits and transferring its powers and duties to the Governor.
Motion carried unanimously.
GENERAL FILE AND THIRD READING
Assembly Bill No. 176.
Bill read third time.
Remarks by Senators Raggio, Neal, Rawson and Porter.
Roll call on Assembly Bill No. 176:
Yeas—21.
Nays—None.
Assembly Bill No. 176 having received a constitutional majority, Mr. President pro Tempore declared it passed.
Senator Raggio moved that all rules be suspended and that Assembly Bill No. 176 be immediately transmitted to the Assembly.
Motion carried unanimously.
INTRODUCTION, FIRST READING AND REFERENCE
By the Committee on Finance:
Senate Bill No. 223—AN ACT relating to the committee on benefits; increasing the number of members of the committee; revising the method of appointing members of the committee; providing that public employees do not lose accrued leave for the time spent away from their employment while serving as members of the committee; and providing other matters properly relating thereto.
Senator Raggio moved that the bill be referred to the Committee on Government Affairs.
Motion carried.
By the Committee on Commerce and Labor:
Senate Bill No. 224—AN ACT relating to insurance; revising the calculation of the assessment that the commissioner of insurance may impose upon each insurer that is authorized to transact insurance in this state to pay for the program to investigate certain violations and fraudulent acts of insurers; requiring the state industrial insurance system to pay such an assessment; and providing other matters properly relating thereto.
Senator Townsend moved that the bill be referred to the Committee on Commerce and Labor.
Motion carried.
By the Committee on Commerce and Labor:
Senate Bill No. 225—AN ACT relating to insurance; providing in skeleton form for various changes to the provisions governing the investigation and prosecution of insurance fraud by the commissioner of insurance and the attorney general; providing that an insurer and certain other organizations shall be deemed to be victims in cases involving insurance fraud for purposes of restitution; requiring the establishment of a fraud control unit for insurance within the office of the attorney general; defining the duties of the fraud control unit; authorizing the fraud control unit to issue subpoenas to obtain documents relating to an investigation of insurance fraud; and providing other matters properly relating thereto.
Senator Townsend moved that the bill be referred to the Committee on Commerce and Labor.
Motion carried.
By Senators Amodei, Schneider, Mathews, O’Connell, Shaffer and Carlton:
Senate Bill No. 226—AN ACT relating to electric service; extending the statutory deadline by which customers may begin obtaining potentially competitive services; requiring legislative approval for a determination of whether an electric service is potentially competitive or its market has effective competition; authorizing the use of the name or logo of a provider of a noncompetitive service by its affiliate; revising the provisions governing the switching of providers of electric services; revising the provisions governing recoverable costs; and providing other matters properly relating thereto.
Senator Amodei moved that the bill be referred to the Committee on Commerce and Labor.
Motion carried.
SECOND READING AND AMENDMENT
Senate Joint Resolution No. 2.
Resolution read second time and ordered to third reading.
UNFINISHED BUSINESS
Signing of Bills and Resolutions
There being no objections, the President pro Tempore and Secretary signed Assembly Bill No. 176.
REMARKS FROM THE FLOOR
Senator Neal requested that his remarks, testimony before the Committee on Government Affairs, legal opinion and a newspaper article be entered in the Journal.
Thank you, Mr. President pro Tempore. I have a few remarks I would like to make and also some statements I would like to have entered into the Journal for this legislative day.
On Wednesday, February 17, in the Committee on Government Affairs, I testified on Senate Bill No. 86 that had to do with gaming contributions to the political process. I felt, at that hearing, that my integrity in terms of introducing that bill was attacked. I want it understood that, when I introduce a measure, I usually look at it from the standpoint of whether or not it is going to help people and the legal grounds on which the bill can be supported. Yet, I was accused of being bitter by introducing the legislation for that particular reason. That could not be further from the truth. What I am going to submit, for the record, is my statement and also the legal opinion which supported the proposition I had before Government Affairs on February 17. I submitted a copy of the opinion at that meeting.
Mr. President pro Tempore, I have been a member of this legislature going on 27 years. I have never heard or seen any Senator’s integrity, in terms of introducing a bill, to be attacked and impugned by other Senators sitting on a committee. I want to make it clear that I disagree with their action. I do not like it, and I do not engage in that type of activity. I try to stick to the facts, and I hope that the other Senators would do the same. Thank you.
Testimony Before the Government Affairs Committee
February 17, 1999
Upon leaving the Presidency in 1960, President Eisenhower caused our nation to ponder a profound statement. He said to the nation be aware of the “Military Industrial Complex.” From the vantage point of the Presidency, Eisenhower had observed the control defense contractors exerted upon Congress through the Defense Department. This control extended to the point of waging war for the purpose of making money. In this state, we are confronted with a Gaming Industrial Complex similar to the Military Industrial Complex, Eisenhower mentioned in 1960.
The Gaming Industrial Complex cannot make war upon other nations; its political influence can be just as devastating. You see, while war is not the objective of the Gaming Industrial Complex, the control and influence of our representative democracy is.
A representative democracy has a process and it has values. The process is free and fair elections, majority rule or a plurality. These are the means by which the people are to be instructive to their representatives, or make changes in the representation. Freedom of assembly and freedom of speech are other parts of the process. The values are popular consent, self determination, equal opportunity, and special liberties. The process and values rest upon a foundation of separation of powers and the Bill of Rights.
The Gaming Industrial Complex has hijacked the process. This is done with great indifference to the damaging of popular consent. The money that gaming has to put into campaigns has allowed it to take the democratic process out of the hands of the people. In a UNR poll, 69 percent of the people of this state say gaming should pay more in taxes. Why then am I the only sponsor of a bill to do what the people want. We are afraid of gaming. As one Senator stated, “if you don’t get gaming money, no one would be elected.” Such dependence is frightening, and I must disagree.
Senate Bill No. 86 is a bill to make it illegal for gaming to contribute to political campaigns. Some will question the value of this and others will question the constitutionality of such a proposal. As to the constitutionality of Senate Bill No. 86, I have submitted to you an opinion from our Legislative Counsel Bureau stating that Senate Bill No. 86 is constitutional. The State of New Jersey has found such a law to be constitutional.
Gaming is a privileged industry. As such, we the people of this state have the constitutional right to control gaming and not allow gaming to control us. To allow the converse of this, we will be acknowledging that gaming has the power to exercise its corporate will over that of the citizens of this state. We can not permit that to continue, or to happen.
Gaming is not like other industries. Gaming has the capacity to cause a moral rupture in the fabric of our society. Gaming does this by taking advantage of our epigenetic cultural of winning. From an early age we are taught how exhilarating it is to win. The graduates of this cultural become the host for a gaming industry. As such, many become unwitting casualties in the social dynamics of the takers and took, where a destitute population may very well be the end result.
Allow me to visit the proposition that Senate Bill No. 86 will affect gaming's right of free speech. I will answer this in a few words. Senate Bill No. 86 will not stop gaming from speaking to elective officials or even asking their support of laws which benefit them. Senate Bill No. 86 prohibits the giving of contributions. If the speech argument is akin to purchasing the elected official, this is what we want to stop.
The state has the constitutional powers to prevent corruption or the appearance of corruption within its gaming industry. The courts have recognized that casinos are places with a tremendous concentration of wealth. When such wealth is brought to bear on political process, as was the case in the last gubernatorial election, the state has a sufficient state interest to institute laws to maintain the integrity of its regulatory process; even to the point of disallowing all those associated with casinos from contributing to political campaigns.
Senate Bill No. 86 has been characterized as a bill to prohibit campaign contribution by casinos. In reality it is a bill to prevent corruption of the political process; and to preserve the values of our democracy.
Legal Opinion
January 12, 1999
Senator Joseph M. Neal, Jr., 304 Lance Avenue, North Las Vegas, NV 89030-3844
Dear Senator Neal:
You have asked this office whether it is constitutionally defensible for the Legislature to enact legislation that prohibits licensed casinos and certain casino employees from making campaign contributions to a candidate for public office, a committee of a political party or any group, committee or association that is organized to support a candidate or political party. The imposition of monetary limitations on campaign contributions implicates the First Amendment to and the Equal Protection Clause of the United States Constitution[1]. Below, we will discuss each of these constitutional issues in turn.
I. First Amendment.
A. Buckley v. Valeo.
The United States Supreme Court has recognized the giving of campaign contributions as a form of political speech as well as an act of association with a candidate or political groups. Buckley v. Valeo, 96 S. Ct. 612 (1976). The First Amendment to the United States Constitution protects political speech as well as political association. Id. at 632. However, the United States Supreme Court has upheld the constitutionality of certain limits on campaign contributions. Id. at 640. In Buckley, the Court reviewed the constitutionality of a federal law that imposed a limit of $1,000 on the amount that a person could give to a candidate for federal office. The Court held that the limit did not violate the right to free speech or the right of association guaranteed under the First Amendment.
The Court in Buckley recognized that the First Amendment affords broad protection to political speech. Id. at 632. However, the Court found that “a limitation upon the amount that any one person or group may contribute to a candidate or political committee entails only a marginal restriction upon the contributor’s ability to engage in free communication.” Id. at 635. The Court based this finding on the reasoning that:
A contribution serves as a general expression of support for the candidate and his views, but does not communicate the underlying basis for support. The quantity of communication by the contributor does not increase perceptibly with the size of his contribution, since the expression rests solely on the undifferentiated, symbolic act of contributing.
Id. Therefore, the Court concluded that a limitation on the amount of money that a person may give to a candidate does not significantly limit his speech because it still allows him to express his support of the candidate. Id. at 636. The Court recognized that a limit on contributions could have a severe impact on the free speech rights of a candidate if the limits prevented the candidate from amassing the resources necessary for effective advocacy. Id. However, the Court found that there was no evidence presented in the Buckley case which indicated that limiting campaign contributions to $1,000 “would have any dramatic adverse effect on the funding of campaigns and political associations.” Id. Although the Court did not find a severe impact on the person’s right to free political speech, it did note that it may be possible for limitations on contributions to be set so low that it has a severe impact on a person’s right to free political speech. Id. at 635-36.
The Buckley Court also recognized that the statute had more than a marginal restriction on a person’s right of freedom of political association guaranteed by the First Amendment. The Court stated that “[m]aking a contribution, like joining a political party, serves to affiliate a person with a candidate . . . [and] enables like-minded persons to pool their resources in furtherance of common political goals.” Id. For these reasons, the Court found that the contribution limits restrict one important means of political association.
The Buckley Court noted that an “action which may have the effect of curtailing the freedom to associate is subject to the closest scrutiny.” Id. However, even a “significant interference with protected rights of political association may be sustained if the State demonstrates a sufficiently important interest and employs means [narrowly tailored] to avoid unnecessary abridgment of associational freedoms.” Id. at 638 (citing Cousins v. Wigoda, 95 S. Ct. 541, 548 (1975); Nat’l Ass’n for the Advancement of Colored People v. Button, 83 S. Ct. 328, 340 (1963)). The Court in Buckley found that the governmental interest of preventing corruption or the appearance of corruption in the political process was a sufficiently important governmental interest to warrant restricting a person’s right to political association by limiting the amount of contributions a person may make to a candidate’s campaign. 96 S. Ct. at 638.
After determining that the governmental interest was “sufficiently important,” the Court in Buckley addressed whether the means employed to further the governmental interest were narrowly tailored to “avoid unnecessary abridgment of associational freedoms.” Id. at 638. The Court held that the $1,000 limitation on contributions was narrowly tailored because it “focuse[d] precisely on the problem of large campaign contributions” that are given or appear to be given to secure a promise of legislative action favorable to the contributor. Id. at 638-39. The Court refused to address the issue of whether a monetary limit of more than $1,000 might have been a more narrow method of achieving the goal of reducing corruption and the appearance of corruption in the political process. Id. at 640. The Court did indicate however, that if a statutory limit on contributions was so low that it amounted to a difference in kind rather than a difference in degree, the limit could be held unconstitutional. Id.
B. Cases Applying the Analysis in Buckley.
Since its decision in Buckley, the United States Supreme Court has found that the governmental interest in reducing corruption and the appearance of corruption in the political process justifies limits on certain types of campaign contributions but not others. In California Medical Ass’n v. Fed. Elections Comm’n, 101 S. Ct. 2712, 2723 (1981), the Court recognized that contributions to multi-candidate political committees may be limited under the Buckley analysis. The Court upheld a limit of $5000 on contributions that natural persons and unincorporated associations could give to multi-candidate political committees. Id. at 2722-23. The Court found that because limiting such contributions helps achieve the goal of reducing corruption of candidates who would receive money from the committees, the governmental interest in preventing corruption or the appearance of corruption was sufficiently important and narrowly tailored to pass constitutional muster. Id.
On the other hand, the Supreme Court has struck down certain limitations on contributions because the important state interest of preventing corruption or the appearance of corruption in the political process was not furthered by their enactment. In Citizens Against Rent Control v. City of Berkeley, California, 102 S. Ct. 434, 438-39 (1981), the Court struck down a local ordinance placing $250 limit on contributions to committees formed to support or oppose ballot measures because ballot measures, unlike candidates, cannot be “bought” in a corrupt sense and, therefore, there was no compelling state interest. In First Nat’l Bank of Boston v. Bellotti, 98 S. Ct. 1407, 1423 (1981), the Court also struck down a state prohibition on corporate contributions in connection with a state referendum because the Court found that the risk of corruption perceived in cases involving candidate elections is not present in a popular vote on a public issue.
Relying on the statement in Buckley that certain limitations may be too low to pass constitutional muster, several courts have struck down state statutes that limit the amount that a person may contribute to candidates for public office because the limits were set so low that they were not narrowly tailored to the state’s interest of preventing corruption. See Russell v. Burris, 146 F.3d 563 (8th Cir. 1998) (holding that provisions of Arkansas statute imposing limits on contributions of $100 and $300 to candidates were unconstitutional); Carver v. Nixon, 72 F.3d 633 (8th Cir. 1996), cert. denied, 116 S. Ct. 2579 (1996) (permanently enjoining enforcement of Missouri statute imposing limits of between $100 and $300 on contributions to candidates); Day v. Holahan, 34 F.3d 1356 (8th Cir. 1994) (permanently enjoining enforcement of Minnesota statute imposing limits of $100 on contributions to political committees and political funds). Likewise, the United States District Court for the Eastern District of California recently struck down a California initiative that imposed variable limits on campaign contributions because such limits were not narrowly tailored to the interest. California Prolife Council Political Action Comm v. Scully, 989 F. Supp. 1282, 1296 (E.D. Cal. 1998).
Although the holdings in Buckley and California Medical Ass’n address whether a statute may limit the amount that an individual or unincorporated association may give to the campaign of a candidate for public office or to multi-candidate political committees, these decisions did not involve a statute that prohibited persons in certain industries from making such contributions. However, this issue has been addressed by state courts in New Jersey and Illinois. We will discuss these cases and use their reasoning to assist in analyzing the constitutionality of the legislation about which you inquired.
In Soto v. State of New Jersey, 565 A.2d 1088 (N.J. Super. Ct. App. Div. 1989), cert. denied, 583 A.2d 310 (N.J. Sup. Ct. 1990), cert. denied, 110 S. Ct. 3216 (1990), a casino employee challenged the constitutionality of a statute that prohibited her from contributing any “money or thing of value” to the campaign of a candidate for public office or to any political party or to any group, committee or association organized in support of any such candidate or political party. The Court of Appeals in New Jersey, applying the Buckley analysis, held that the prevention of corruption or appearance of corruption of the political process is a sufficiently important state interest to justify imposing such restrictions on certain casino employees who have supervisory powers and discretion to make decisions regarding casino operations. In its reasoning, the court discussed the nature of the gaming industry and the significance of close governmental regulation to the integrity of the industry. Citing the lower court’s judge, the court of appeals stated that in legalizing gambling in the State of New Jersey:
[T]he legislature recognized the concentration of wealth that exists with casinos and the disproportionate weight of that wealth, and how the casinos as a group or individually can bring that to the political process. The legislature recognized the need for maintaining the integrity of the regulatory process, not in just some abstract way, but because the acceptability of casino gambling in the State depends on strict regulation.
An equally important fact in that process is maintaining not just the actual integrity of the regulations but the appearance of the integrity that is needed because it is with that the public confidence will continue and how the predicate to the legalization to gambling will exist.
Id. at 1094 (emphasis in original).
In reaching its conclusion, the court in Soto also considered the closeness of the relationship between the government and political parties. In particular, the court stated that “[p]olitical parties have come to be regarded by the courts as governmental agencies through which the sovereign power is exercised by the people.” Id. at 1097. Thus, the Court reasoned that “[t]he compelling state interest in maintaining the integrity of political parties and organizations from undue influence by those individuals who, by the very nature of their employment, play a pivotal role in the casino industry justifies upholding the restrictions found in [the statute].” Id.
The Illinois Supreme Court addressed a similar issue in Schiller Park Colonial Inn, Inc. v. Berz, 349 N.E.2d 61 (Ill. 1976). In Berz, the court addressed whether a statute that prohibited liquor licensees from making political contributions was constitutional. Id. at 64. Applying the analysis set forth by the United States Supreme Court in Buckley, the court held that in light of the substantial state interest involved and the relatively minor limitations upon the constitutional rights of the licensees, the statute was narrowly tailored to prevent unnecessary interference with the First Amendment rights of the licensees. Id. at 65-66. In its reasoning the court stated:
We agree that it is large campaign contributions which are most likely to create a danger that liquor licensees or other individuals in the liquor business may obtain a degree of influence over public officials. The General Assembly may reasonably have believed, however, that its efforts to further the relevant State interest would have been much less effective if only contributions above a certain amount were prohibited. It is possible that a liquor licensee could circumvent a law proscribing only large contributions by financing a large number of small contributions ostensibly given by his friends and associates. Also, if many liquor licensees acted in concert and each made a small contribution to a particular candidate, it is conceivable that they could, as a group, accomplish what section 12a of the Liquor Control Act was intended to prevent. We therefore, hold that Section 12a is not rendered unconstitutional by the fact that it prohibits small political contributions as well as large contributions.
Id. at 66. The court stated that the statute at issue did not prohibit the liquor licensees from engaging in “pure speech.” Id. The court noted that the licensees were still able to express their political opinions to any willing listeners and by exercising their voting rights and that the licensees could join and provide volunteer services to political parties. Next, we will apply the analysis set forth in the cases previously discussed to the legislation about which you inquired.
C. Analysis of Constitutionality of Proposed Legislation Under Buckley.
The legislation about which you inquired would prohibit casinos and certain casino employees from making contributions to a candidate for public office, to a committee of a political party or to any group, committee or association that is organized to support a candidate or political party. Because corporations are subject to more stringent restrictions on political contributions to candidates and political parties than are individuals or unincorporated groups, our analysis will focus on the right of a state to limit the right of an individual to make political contributions. See Austin v. Michigan Chamber of Commerce, 110 S. Ct. 1391 (1990); Fed. Elections Comm. v. Nat’l Right to Work Comm., 103 S. Ct. 552 (1982); U.S. v. Int’l UnionUnited Auto., Aircraft & Agr. Implement Workers of Am., 77 S. Ct. 529 (1957).
The restriction in the proposed legislation is similar to the restriction in Buckley because it imposes limits on a person’s right to contribute to a candidate or a political party. However, the limitation in the proposed legislation may be more restrictive than the limitation in Buckley because it prohibits certain persons from making any contributions. Therefore, it is the opinion of this office that as in Buckley the restriction at least has a more than marginal impact on a person’s right to freedom of association and arguably has a more than marginal impact on a person’s right to engage in political speech. Thus, we must proceed to the next step of the Buckley analysis and determine whether the State of Nevada has a significantly important interest in prohibiting casino employees from making contributions to a candidate or political party. Buckley, 96 S. Ct. at 638.
NRS 463.0129 sets forth the public policy of Nevada on the gaming industry as follows:
1. The legislature hereby finds, and declares to be the public policy of this state, that:
(a) The gaming industry is vitally important to the economy of the state and the general welfare of the inhabitants.
(b) The continued growth and success of gaming is dependent upon public confidence and trust that licensed gaming is conducted honestly and competitively, that establishments where gaming is conducted and where gambling devices are operated do not unduly impact the quality of life enjoyed by residents of the surrounding neighborhoods, that the rights of the creditors of licensees are protected and that gaming is free from criminal and corruptive elements.
(c) Public confidence and trust can only be maintained by strict regulation of all persons, locations, practices, associations and activities related to the operation of licensed gaming establishments and the manufacture or distribution of gambling devices and equipment.
(d) All establishments where gaming is conducted and where gambling devices are operated, and manufacturers, sellers and distributors of certain gambling devices and equipment must therefore be licensed, controlled and assisted to protect the public health, safety, morals, good order and general welfare of the inhabitants of the state, to foster the stability and success of gaming and to preserve the competitive economy and policies of free competition of the State of Nevada.
(e) To ensure that gaming is conducted honestly, competitively and free of criminal and corruptive elements, all gaming establishments in this state must remain open to the general public and the access of the general public to gaming activities must not be restricted in any manner except as provided by the legislature.
2. No applicant for a license or other affirmative commission approval has any right to a license or the granting of the approval sought. Any license issued or other commission approval granted pursuant to the provisions of this chapter or chapter 464 of NRS is a revocable privilege, and no holder acquires any vested right therein or thereunder.
3. This section does not:
(a) Abrogate or abridge any common law right of a gaming establishment to exclude any person from gaming activities or eject any person from the premises of the establishment for any reason; or
(b) Prohibit a licensee from establishing minimum wagers for any gambling game or slot machine.
Furthermore, the Supreme Court of Nevada has noted that “gambling has necessarily surrounded itself with an aura of crime and corruption” and that corruption and crime are closely linked to unlawful gambling. Nevada Tax Comm’n v. Hicks, 73 Nev. 115, 119 (1957). The Court stated that the success of gaming as a lawful enterprise in Nevada required that gaming:
[M]ust be free from the criminal and corruptive taint acquired by gambling beyond our borders. If this is to be accomplished not only must the operation of gambling be carefully controlled, but the character and background of those who would engage in gambling in this state must be carefully scrutinized.
Id. The Nevada Supreme Court has recognized that protecting “the State’s vital gaming industry” is a legitimate legislative purpose. State v. Rosenthal, 107 Nev. 772, 777 (1991); Spilotro v. State, ex rel. Nevada Gaming Comm’n, 99 Nev. 187, 194-95 (1983); State v. Glusman, 98 Nev. 412, 427-28 (1982). Thus, the close regulation of the gaming industry has been recognized by the Legislature and the Supreme Court of Nevada as being vital to prevention of corruption and crime and to the continued legality of the industry in Nevada. This interest is similar to the state interest which was found to be “sufficiently important” by the New Jersey Court of Appeals in Soto. Although the Soto decision is not binding precedent in Nevada, it is the opinion of this office that the State of Nevada has the same important interest in preventing corruption or the appearance of corruption to justify the enactment of a statute limiting the ability of casinos and certain casino employees to make contributions to a political candidate or political party.
Even if the State of Nevada has an important governmental interest in restricting contributions by casinos and casino employees to political candidates and parties, in order for such a restriction to pass constitutional muster, it must be narrowly tailored to further the interest so as not to unnecessarily abridge constitutional rights under the First Amendment. As previously discussed, several courts have struck down state statutes that limit persons’ rights to contribute to candidates for public office because the limits were set so low that they were not narrowly tailored to the state’s interest of preventing corruption. See Russell v. Burris, 146 F.3d 563 (8th Cir. 1998); Carver v. Nixon, 72 F.3d 633 (8th Cir. 1996), cert. denied, 116 S. Ct. 2579 (1996); Day v. Holahan, 34 F.3d 1356 (8th Cir. 1994); California Prolife Council Political Action Comm v. Scully, 989 F. Supp. 1282, 1296 (E.D. Cal. 1998). However, all these cases involved restrictions that applied to all persons in the state. The legislation about which you inquired is much narrower in scope; it applies only to casinos and certain employees in the gaming industry. In upholding a statute which contains identical provisions to the legislation at issue, the New Jersey Court of Appeals noted:
Buckley approved the limitation on political contributions to the entire public at large throughout the United States whereas § 138 applies to only a small percentage, approximately 3.5% . . . of all the employees in the casino industry. Here, the prohibition under § 138 affects a relatively small percentage of persons in the casino industry who must accept the Act’s imposition of restrictions and prohibitions as a condition of their employment.
565 A.2d at 1106. Similarly in Berz, the Illinois Supreme Court upheld a statute which prohibited only liquor licensees from making campaign contributions. Thus, based upon the reasoning and holdings in Soto and Berz, it is the opinion of this office that a court would find that the legislation about which you inquired is narrowly tailored to further the important governmental interest of preventing corruption or the appearance thereof in the political process from the influence of the gaming industry.
II. Equal Protection.
Because the legislation about which you inquired affects First Amendment rights of the casinos and their employees, and because the proposed legislation singles out casinos and their employees for regulation, the casinos and their employees may argue that the proposed legislation violates their right to equal protection under the laws. The Equal Protection Clause is encompassed in the Fourteenth Amendment to the United States Constitution and also in Section 1 of Article 1 and Section 21 of Article 4 of the Nevada Constitution. State v. Eighth Judicial Dist. Court, 101 Nev. 658, 661 (1985).
In determining whether the Equal Protection Clause has been violated, a court must consider three things: (1) “the character of the classification in question; [2] the individual interest affected by the classification; and [3] the governmental interests asserted in support of the classification.” Dunn v. Blumstein, 92 S. Ct. 995 (1972). If a fundamental right or suspect class is involved, the legislative classification is subject to strict scrutiny. Plyler v. Doe, 457 U.S. 202, 216-17 (1982). To justify the restriction, a state must establish that a compelling state interest supports the classification and that no less restrictive alternative is available. Id. As previously discussed, it has been legislatively and judicially recognized in the State of Nevada that close regulation of the gaming industry is vital to the prevention of corruption and crime in the gaming industry and to the continued legality of the industry in this state. In addition, the Soto court found that the New Jersey statute which contains identical provisions to the legislation at issue did not violate the Equal Protection Clause. 565 A.2d at 1105. Therefore, it is the opinion of this office that it is likely that the proposed legislation would survive an equal protection challenge even under the strict scrutiny test.
III. Conclusion.
In conclusion, based upon the First Amendment analysis in Buckley and the reasoning and holding of the New Jersey court in Soto, it is the opinion of this office that it is constitutionally defensible for the Legislature to enact legislation that prohibits licensed casinos and certain casino employees from making campaign contributions to a candidate for public office, to a committee of a political party or any group or committee or association that is organized to support a candidate or political party.
If you have any further questions regarding this matter, please do not hesitate to contact this office.
Very truly yours,
Brenda J. Erdoes
Legislative Counsel
By_______________________
Edward A. Johnson, II
Deputy Legislative Counsel
By_______________________
Eileen G. O’Grady
Principal Deputy Legislative Counsel
EAJ:dtm
Encl.
Ref No. 9809031201
Gaming Campaign Bill Likely Dead.
Opponents at a Hearing Pile Up on a Measure to End Political Contributions from the Casino Industry.
By Ed Vogel
Donrey Capital Bureau
Thursday, February 18, 1999
Copyright Las Vegas Review‑Journal
Carson City—A wall of opposition Wednesday greeted Sen. Joe Neal’s bill to prohibit the gaming industry from contributing to political campaigns.
Union leaders, the Nevada Resort Association, a casino cook and Neal’s fellow senators contended it would not be fair to boot casinos out of political participation when the same prohibition was not placed on any other business.
While Senate Government Affairs Chairwoman Ann O’Connell did not take a vote on Neal’s Senate Bill 86 after a 90-minute hearing, the legislation appeared dead.
"I would say the bill is in trouble," said O’Connell, R‑Las Vegas, who planned a Friday vote on the measure.
With the outcome so certain, powerful gaming industry lobbyist Harvey Whittemore declined to testify on the bill.
During the hearing, Sen. Jon Porter, R‑Boulder City, asked Neal, D‑North Las Vegas, to give specific instances of the gaming industry buying elected officials with contributions.
"My position is not to make accusations," Neal replied. "Your conscience dictates what you do. It doesn’t take a rocket scientist to understand what is going on."
In response to another Porter question, Neal readily acknowledged that he always has accepted but not solicited contributions from the gaming industry. He has been a state senator since 1973.
Last year he received little gaming support when he ran unsuccessfully for governor on a platform that included raising the gaming tax.
"I always have received gaming money but not as much as you guys," he said. "You cannot let gaming influence you so you forget the public."
Armed with a legal opinion from legislative lawyers that his bill was constitutional, Neal described a "gambling‑industry complex" that held sway over Nevada government in the same way that a military industrial complex controlled the Defense Department.
"The gaming industry process has hijacked the process," he said. "Money going into campaigns has allowed it to take the campaigns out of the hands of people."
He said gaming could cause a moral corruption in the values of Nevada citizens by its emphasis on winning. The result may be a morally destitute population, he said.
Sen. Terry Care, D‑Las Vegas, said most of his contributions came from teachers. After the meeting, Porter said just 15 percent of his contributions came from gaming companies.
Sen. Bill O’Donnell, R‑Las Vegas, questioned whether Neal made such disparaging comments about gaming out of personal bitterness toward the industry. Neal said no.
Rather than gaming controlling elections, O’Donnell said, it was no secret that union contributions and influence led to victories for candidates in several Clark County races.
AFL‑CIO lobbyist Danny Thompson and Hotel and Restaurant Employees International Union Nevada Director D. Taylor praised Neal for other legislative positions but said he was wrong on prohibiting casinos from making contributions.
"You cannot kick out one group without repercussions that eventually will affect other groups," Taylor said.
"I don’t want my employer’s political rights taken away any more than I want my union’s political rights taken away," said Bernard Correa, an MGM cook and union steward.
GUESTS EXTENDED PRIVILEGE OF SENATE FLOOR
On request of Senator Rawson, the privilege of the floor of the Senate Chamber for this day was extended to Mary Crawford, Adriana Hernandez, Justin Loncar, Cecelia Mastin, Justin Reeves and Shane Trotter.
On request of Senator Titus, the privilege of the floor of the Senate Chamber for this day was extended to General Jack Gregory.
Senator Raggio moved that the Senate adjourn until Monday, February 22, 1999 at 11 a.m.
Motion carried.
Senate adjourned at 11:17 a.m.
Approved: Lawrence E. Jacobsen
President pro Tempore of the Senate
Attest: Janice L. Thomas
[1] The right to free speech and association are also protected by section 9 of article I of the Nevada Constitution. The right to equal protection of the laws is incorporated in section 1 of article 1 and section 21 of article 4 of the Nevada Constitution. Because the analysis under the United States Constitution and the Nevada Constitution regarding the right to free speech and association, and the right to equal protection under the laws are the same, we have addressed only the interpretation of the First Amendment to and the Equal Protection Clause of the United States Constitution.