N.Y. Casino Gaming Referendum: Expenditure Disclosure Confusion

Genova Burns LLC
Contact

In the last weeks before the general election, two ads run on TV.  Instead of expressly advocating a vote for or against the casino gaming referendum, the ad scripts read:

“Casino gambling is a wonderful thing.  Call the governor to thank him for his leadership on this issue.”

“Casino gambling is a terrible thing.  Call the governor to tell him that casinos are not the answer.”

Must expenditures for these ads be disclosed and, if so, by and to whom?

Pursuant to New York Election Law, the State Board of Elections (SBOE) requires political committees acting to promote the success or defeat of a ballot proposal to submit periodic reports of expenditures.  Except in de minimis circumstances, these reports would also include all contributions received.  While SBOE regulations clarify that with respect to independent expenditures for or against candidates: (1) a political committee must register and report, and (2) only narrowly defined “express advocacy” communications trigger the reporting requirement, the SBOE has not issued comparable guidance for ballot proposal advocacy expenditures.

The recently adopted casino enabling legislation directs thoroughbred racing, harness racing, and video lottery licensees that make an expenditure of more than $1,000 in support or in opposition to the referendum to file any reports required pursuant to the Election Law simultaneously with the NYS Gaming Commission.  Under that new law, these licensed entities (but no one else) must also file “such additional reports” required by the Gaming Commission.    It is therefore only these licensed entities that are subject to civil penalty of the greater of $100,000 or the cost of the communication for knowing or willful violations.  In contrast, the civil penalty for reporting violations under the Election Law is $1,000 (or $10,000 for failure to file three or more times).

The enabling legislation indicates “this requirement” applies to expenditures made “directly or indirectly via one or more persons”, a term defined to include political committees.  Thus, the legislation suggests either that reportable ballot advocacy expenditures may be made by persons and entities other than registered political committees or, conversely, that the political committee registration requirement will be triggered for thoroughbred, harness, and video lottery licensees making such expenditures.

How broadly will Gaming Commission regulations define the “casino gaming expenditures” subject to disclosure?  If these are limited to express advocacy (e.g., explicit “vote for” and “vote against” ads), the required disclosure would not capture the kind of pro- and anti-casino issue ads hypothetically described above.  But were the Gaming Commission to choose a broader definition so as to encompass such issue ads, would the SBOE follow suit? 

If not, two entities could spend identical amounts on comparable issue ads, with one required to report to the Gaming Commission pursuant to the enabling legislation and the other not required to report at all, since a mere issue ad would not trigger a political committee registration requirement.  Indeed, it is hard to imagine a different result given how narrowly the SBOE has defined the analogous requirements for reportable expenditures for and against candidates.

Other extant disclosure regimes do not fill this gap.  The definition of “lobbying” under the NY State Lobbying Act does not extend to attempts to influence the electorate on Constitutional amendments; such expenditures therefore need not be reported to JCOPE.  The Attorney General’s new reporting requirements extend to “election targeted issue advocacy” within 90 days before the general election that refers to a clearly identified constitutional amendment.  But individuals and for-profit business entities are not subject to the AG’s reporting regime, which, in any event, is unlikely to yield pre-election disclosure.

So, will comparable disclosure be required of all persons and entities making expenditures in relation to the proposed Constitutional amendment?  The answer currently appears to be no.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Genova Burns LLC | Attorney Advertising

Written by:

Genova Burns LLC
Contact
more
less

Genova Burns LLC on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide