Third Circuit Readies Hammer for Casino-Targeted Donor Limit

PHILADELPHIA (CN) — Casino shareholders who want to make political contributions urged the Third Circuit on Tuesday to strike down a Pennsylvania law in their way.

Pasquale Deon Sr., a businessman and chairman of the Southeastern Pennsylvania Transportation Authority, is a major shareholder in the Sands Casino Resort. Deon brought the suit against the Pennsylvania Gaming Control Board in 2017, alleging that the Pennsylvania Gaming Act violated his First Amendment right to freedom of association. 

Deon was joined in the suit by Maggie Hardy Magerko, a beneficiary of a trust that owns the Lady Luck Casino and an owner of 84 Lumber. 

While Deon is heavily involved in the management of the Sands Casino, Magerko does not have any direct involvement. Prior to their connections with the gaming industry, both Deon and Margerko had made political contributions. 

Pennsylvania appealed to the Philadelphia-based Third Circuit after a federal judge concluded in September that the ban was overbroad in banning principals, key employees or licensees of a gaming operation as well as suppliers from making a contribution of any amount to a candidate or a political action committee. 

In his argument Tuesday before the three-judge panel, Senior Deputy Attorney General Howard Hopkirk defended the ban as preventing political corruption, a legitimate government interest.

U.S. Circuit Judge Kent Jordan questioned Hopkirk why the gaming board thinks it is entitled to ban any amount of contribution — even $1. 

“There can still be the appearance of corruption,” Hopkirk said. 

“It’s hard to see how $1 or even $100 could corrupt someone,” U.S. Circuit Judge Stephanos Bibas chimed in. 

John Hamill, representing Deon and Magerko, asked the court to affirm, saying the ban serves an important goal  but reaches too far. 

“Bottom line is there is no way this statute can be enforced,” said Hamill of the law firm DLA Piper.

Neighboring states New Jersey and Maryland also have political-contribution restrictions. New Jersey prevents casino managers or corporate owners from making any contribution, while Maryland prohibits donations from any shareholders who own five percent or greater in a casino.

The panel was rounded out by U.S. Circuit Judge Richard Nygaard, who participate in arguments via video call.

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