In a decision released last week, the FCC imposed a fine of $4000 on a broadcaster licensed to a community in the state of Arkansas for airing an advertisement for the Missouri State Lottery. In this case, a station licensed to Arkansas ran a remote broadcast from a store in Missouri. During the course of the remote, the on-air announcer invited listeners to come to the store and made some not-too-subtle remarks implying that, when they did, they could buy Missouri lottery tickets. As there is a statutory provision prohibiting a station located in one state from running an ad for a lottery in another state if its own state does not have a lottery, the Commission issued this fine.
This ban is based on a statute passed by Congress, and approved by a Supreme Court decision 15 years ago – finding a compelling state interest in protecting the citizens of states that ban gambling from allowing stations in their states from advertising that prohibited activity. Of course, in many cases, a station licensed to one state may be heard (and may in fact be physically located) in another state. Even so, the city of license is what counts – so a station has to observe the laws of that state. In some cases, that can mean that there are different rules that apply to different stations in the same cluster (and possibly located in the same building, with advertising being sold by the same sales people).
Similarly, ads for legal gambling conducted at an out-of-state casino can only be run on stations in states where gambling is legal. All casino advertising had been prohibited until the adoption of the Charitable Gaming Act, which permitted advertising of gambling at Indian casinos, and of "lotteries" conducted by charitable organizations and by commercial enterprises where the lottery was "occasional and ancillary" to the business and where that lottery was legal under state law. About 10 years ago, in the Greater New Orleans case, the Supreme Court said that it was unconstitutional for a state to prohibit advertising for some gambling if they were allowing advertising for other gambling. In cases where a station was allowed to advertise Indian gaming, occasional and ancillary lotteries or even state lotteries, it was a violation of the First Amendment to discriminate against ads for legal casino gambling. Legal advertising for the other forms of gambling made clear that there was no compelling state interest in prohibiting the ads for the legal casino gambling. But, in states where there is no legal gambling, then a state can still ban ads for legal gambling being conducted in other states. Again, commonly-owned stations in the same market, but licensed to different states, can have different rules as to what they can advertise. So be careful.