Court News Ohio
Court News Ohio
Court News Ohio

Citizen Has Standing to Challenge Constitutionality of Ohio Casino Gambling

A Columbiana County man has a right to proceed with his challenge to Ohio’s law permitting casino gambling, arguing the restrictive nature of who can operate the facilities violates his federal constitutional rights, the Ohio Supreme Court ruled today.

In a lead opinion, Justice Judith L. French wrote that Frederick Kinsey has alleged standing to challenge the constitutionality of the 2009 voter-approved amendment to the Ohio Constitution permitting four casinos in specified locations, and the subsequent legislation that outlines how the casinos as well as seven “racinos” operate. The ruling rejects claims by the Ohio Roundtable and 12 other individuals who collectively filed suit in 2011 to block casino gambling in the state.

Justice French’s opinion was joined by Justice Sharon L. Kennedy. Justices Paul E. Pfeifer and William M. O’Neill in a concurring opinion stated they would grant all the participants the right to challenge the law under the “public-right standing” theory when there is an issue of great importance and interest to the public.

Combination of Amendments, Laws and Rules Challenged
Justice French explained that while the individuals challenged the legislation and administrative rules related to gambling at both casinos and race tracks, the only issue before the Supreme Court is the existence of standing and whether the trial court appropriately dismissed the case when ruling none of the individuals nor a business or non-profit group had the legal right to challenge the laws.

Article XV, Section 6(A) of the Ohio Constitution authorizes a state lottery provided that all the net proceeds are used solely for the support of educational programs, and Article XV, Section 6(C)(1) permits limited casino gambling operations at four facilities in Cleveland, Cincinnati, Toledo, and Columbus. The proceeds from those operations are directed to cities, counties, public schools, law enforcement, job training and the horse racing industry. Other provisions of the casino amendment detail among other things how casino revenues will be taxed and how casino licenses will be obtained.

In 2009, the Ohio General Assembly approved House Bill 1, which authorized the Ohio Lottery Commission to operate video lottery terminals (VLTs) and authorized the commission to issue administrative rules to implement the operations of VLTs. The commission limited the VLT licenses to those with a permit to conduct horse races. In 2010, lawmakers enacted H.B. 519 to extend the period of time casino operators had to make initial investments in the operation of casinos. In 2011, the legislature passed H.B. 277, which excluded certain amounts of revenue collected by casino operations from the state commercial-activity tax, and instituted other tax changes and operational procedures for casinos.

In October 2011, a group led by David Zanotti, president of the American Policy Roundtable (Ohio Roundtable), filed a lawsuit in Franklin County Common Pleas Court raising 17 issues as it sought to declare the three bills and the administrative rules unconstitutional. The lawsuit also claimed that Article XV, Section 6 of the Ohio Constitution violated the Equal Protection Clause of the Fourteenth Amendment to the U.S. Constitution by granting a monopoly to the gaming operators.

The state sought to have the case dismissed, claiming none of the individuals have standing as a general citizen or taxpayer, and that none of the people or the business have standing as a contributor to the commercial-activity tax. It rejected those claiming standing by virtue of being a school teacher or parents of students in a public school, and that of an individual suffering from the effects of a gambling addiction. The trial court also rejected the claim by a citizen on behalf of a community concerned about the negative effects of casino gambling. In contrast to the arguments to stop casino gambling, the complaint also contained Kinsey’s allegation that he was denied equal treatment because his interest in operating a casino is limited by the laws granting the licenses to certain entities.

The trial court dismissed the case, and the Tenth District Court of Appeals affirmed the decision. The group appealed to the Supreme Court.

Standing Requires a Personal Stake in the Outcome of the Case
Justice French cited prior Supreme Court decisions that require a party have a personal stake in the outcome of the controversy and that “ideological opposition to a program or legislative enactment is not enough” to gain standing. The Court outlined its three key principles to have standing in its 2014, Inc. v. JobsOhio decision.

“Under the traditional principles, a plaintiff must show, at a minimum, that he has suffered ‘(1) an injury that is (2) fairly traceable to the defendant’s allegedly unlawful conduct, and (3) likely to be redressed by the requested relief,’” she wrote.

Using that standard, the Court rejected the claim by Robert Walgate Jr. and his family that they are negatively impacted by casinos because he is a recovering addicted gambler. The Court also denied standing to Zanotti and others who argued their communities near Cleveland would be harmed by the negative impact of casinos.

Justice French explained the negative effects of gambling do not constitute any concrete injuries that affect them any differently than the general public; that they cannot trace the injuries to the state because the casinos and VLTs were not in operation at the time they made their claim; and shutting them down would not bring them relief because the effects of gambling would continue to exist.

The opinion explains the business owners, teachers, and parents are also not able to connect how the laws specifically injure them or how blocking the gambling operations would relieve them of any harm.

Kinsey Argues Right to Open a Casino
Kinsey’s claim is that the laws and the state constitutional amendment violate the Equal Protection Clause because of limits that effectively allow only a few companies to operate the casinos.

Citing the U.S. Supreme Court’s 1993 Northeastern Florida Chapter of Associated Gen. Contrs. of Am. v. Jacksonville, Justice French wrote the Kinsey’s argument is enough to overcome the trial court’s dismissal of the case before he has a chance to make his arguments.

“When the government erects a barrier that makes it more difficult for members of one group to obtain a benefit than it is for members of another group, a member of the former group seeking to challenge the barrier need not allege that he would have obtained the benefit but for the barrier in order to establish standing,” she wrote quoting the Northeastern opinion.

She explained the injury Kinsey is claiming is that the barrier does not even give him a chance to apply to be a casino operator, and not that he would actually obtain the license. She noted a 1999 U.S. Sixth Circuit Court of Appeals decision (Lac Vieux Desert Band of Lake Superior Chippewa Indians v. Michigan Gaming Control Bd.) granting standing to the Lac Vieux. The court granted the tribe standing to challenge a denial of its right to apply for a Detroit casino permit. They argued they owned and operated another Michigan casino, they arranged for the development of a casino in Detroit, selected a site, and were ready and able to submit the information and required fee to the state to apply.

Justice French notes that if the Ohio law was declared unconstitutional, Kinsey would not be able to open a casino because no casino could open. That declaration would resolve the unequal treatment claims because all potential operators would be equally impacted by the ban, she explained.

Because the court dismissed Kinsey’s case at the initial pleading stage where he only had to generally outline his complaint, she stated the Court is not deciding what would happen to him in later stages where he would face a higher hurdle requiring he explain in more detail how he would be “ready and able” to open a casino if the laws limiting who could operate them were struck down.

Concurring Opinion Would Grant More Parties Standing
Justice Pfeifer in his concurring opinion stated he disagreed with the ruling in requiring a citizen to prove he or she will suffer an injury that differs from the general public in order to have standing to challenge matters of great importance and interest to the public.

“This case is of great interest to the public. It involves a 2009 constitutional amendment on which over 3,000,000 Ohioans cast a vote,” he wrote. “Whether the arguments are good enough to carry the day is unknown, but the litigants deserve the right to be heard concerning a significant constitutional amendment that as recently as six years ago engaged the attention of over 3,000,000 Ohioans.”

Dissent Argues Kinsey Insufficiently Pled Standing
Justice Judith Ann Lanzinger concurred in part with the dismissal of the other plaintiffs but dissented concerning Kinsey, writing his claim is just part of a “laundry list of challenges” by those who do not want casino gambling. She wrote the authorization of casino gambling was a policy choice instituted and approved by Ohio voters, and that Kinsey and the others are trying to accomplish through the courts what they could not do at the ballot box.

“Four justices now allow the will of the people to be questioned based on the mere assertion by one individual that he ‘would engage’ in casino gambling, without requiring assertion of further facts showing that he indeed is ready and able to do so,” she wrote.

Justice Lanzinger distinguished Kinsey’s claim from the Lac Vieux in Michigan because he has not alleged he has any of the plans or finances to actually operate a casino.

“Under the majority’s logic, every person in the world has standing to state a claim identical to Kinsey’s, as long as the complaint contains the simple statement that he or she would engage in casino gaming in Ohio but for the current state of the law,” she concluded.

Justice Lanzinger also observed that because Kinsey asked for the amendment and gambling laws to be declared unconstitutional, if he won, no one would be allowed to engage in gambling — an illogical result if he really wanted to operate a casino.

Chief Justice Maureen O’Connor joined the dissent as did Judge Mary DeGenaro of the Seventh District Court of Appeals sitting in on the case for Justice Terrence O’Donnell who recused himself.

2013--0656. State ex. Rel. Walgate v. Kasich, Slip Opinion No. 2016-Ohio-1176.

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