Scott v. Priest

Monty SCOTT, Bob Wheeler, Eric Jackson, Bill
Walmsley, and Bill Goodwin, Individually and
On Behalf of the Committee Against Amendment
8, and All Others Similarly Situated,
Petitioners v. Sharon PRIEST, Secretary of
State of the State of Arkansas, Respondent;
The Local Option Casino and Arkansas Lottery
Committee, Intervenor

96-1078                                            ___ S.W.2d ___

                    Supreme Court of Arkansas
               Opinion delivered October 21, 1996


1.   Elections -- ballot title -- length does not render
     insufficient. -- Length, in itself, does not render a ballot
     title insufficient.

2.   Elections -- ballot title -- sufficiency of -- requirements. -
     - Ballot titles must include an impartial summary of the
     proposed amendment that will give voters a fair understanding
     of the issues presented and of the scope and significance of
     the proposed changes in the law; they cannot omit material
     information that would give the voter serious ground for
     reflection; and they must be free from misleading tendencies
     that, whether by amplification, omission, or fallacy, thwart
     a fair understanding of the issues presented.

3.   Elections -- ballot title -- failed to mention preferential
     treatment given certain licensees. -- Where proposed Amendment
     8 provided for casino gambling in Boone, Chicot, and Garland
     counties without the voters first being given the right to
     approve such gambling at a local-option election; where the
     licensee at each designated site in these three counties were
     guaranteed gaming benefits upon the proposal's adoption at the
     general election; where eight other casino enterprises were
     authorized under proposed Amendment 8 only after approval of
     the voters of the county or counties where those enterprises
     were to be located; and where the ballot title failed to
     mention this preferential treatment given the three licensees
     in Boone, Chicot, and Garland counties, the supreme court
     concluded that this omission would give the voters serious
     ground for reflection on whether to vote for the measure.

4.   Elections -- ballot title -- failed to convey change in voter-
     approval percentage requirement. -- The voter-approval
     percentage requirement in proposed Amendment 8 conflicted with
     that in Amendment 7 to the Arkansas Constitution, which
     requires only 15% of the legal voters of the county to pass a
     local-initiative measure; proposed Amendment 8 would change
     existing law by requiring that 20% of the qualified voters in
     a county approve casino gambling; while the ballot title
     informed the voter of the 20% requirement, it failed to
     disclose that the percentage was higher than the requirement
     under Ark. Const. amend. 7; because the ballot title failed to
     convey this change so that the voters could have a fair
     understanding of the issue, the supreme court concluded that
     this nondisclosure added to the title's invalidity.

5.   Elections -- ballot title -- failed to reveal proposal's
     definition of "Gross Gambling Revenue." -- Where the ballot
     title failed to reveal proposed Amendment 8's definition of
     "Gross Gambling Revenue," which provided that casinos pay
     state taxes of 8% and municipal and county taxes of up to 2%
     on their gross gambling revenues, the supreme court, noting
     that the definition would be of obvious import when
     calculating the amount of taxes owed by a licensee, concluded
     that voters could be misled concerning how much of the
     gambling revenues would be taxed; furthermore, voters also
     would be confused as to whether lottery revenues, legalized by
     proposed Amendment 8, would be taxed as well; under the
     proposal, they would not, but the ballot title did not reveal
     that fact.

6.   Elections -- ballot title -- erroneously represented that no
     more than eleven licensed casinos could be simultaneously
     operated. -- Although the ballot title represented that "no
     more than eleven licensed casinos may be simultaneously
     operated" in the state, and Section 7 of proposed Amendment 8
     made a fair attempt to restrict the number of licensed casinos
     in operation at one time to eleven, Section 1(D) authorized
     "casino gambling in other constitutional amendments" as well;
     this provision conflicted with the existing law in Ark. Const.
     amend. 7, which provides that if conflicting measures
     initiated or referred to the people are approved by a majority
     of votes at the same election, the one receiving the highest
     number of affirmative votes shall become law; the supreme
     court declared that it was clear that Arkansas could well end
     up with more than eleven casinos if another gambling proposal
     besides proposed number 8 were enacted.

7.   Elections -- ballot title -- failed to disclose unequal edge
     in treatment given new casino licensees. -- Where the ballot
     title failed to disclose that proposed Amendment 8 would allow
     its initial licensees to compete with two existing pari-mutuel
     enterprises by permitting them to engage immediately in
     "simulcast sport wagering" but that the two pari-mutuel
     enterprises would not be allowed to offer casino gambling
     until two years after the general election, the supreme court
     concluded that this unequal edge in treatment given the new
     casino licensees was not revealed in the ballot title and
     could well have made a difference in the voters' decision when
     voting on the proposal.

8.   Elections -- proposed measure must be of size capable of
     having ballot title that imparts description so that voters
     can vote intelligently. -- While Ark. Const. amend. 7 does not
     limit the length of a proposal, the proposed measure must be
     of a size capable of having a ballot title which will not only
     convey the scope and import of the measure, but also impart a
     description of the proposal so voters can cast their votes
     intelligently and with a fair understanding of the issue; the
     supreme court held that, in this respect, proposed Amendment
     8's ballot title failed.

9.   Elections -- ballot title -- declared insufficient --
     placement on ballot enjoined. -- Under present law as provided
     in Ark. Const. amend. 7, the supreme court declared the ballot
     title to proposed Amendment 8 insufficient and invalid and
     enjoined its placement on the general-election ballot or,
     alternatively, directed that any votes cast on the proposed
     amendment not be counted or certified.


     Original Action Petition; granted.
     Huckabay, Munson, Rowlett & Tilley, P.A., by: Beverly A.
Rowlett, for petitioners.
     Winston Bryant, Att'y Gen., by:  M. Wade Hodge, Asst. Att'y
Gen., for respondent.
     Kaplan, Brewer and Maxey, P.A., by: Philip E. Kaplan, and
Silas H. Brewer, Jr., for intervenor.

     Tom Glaze, Justice. 
     Petitioners Monty Scott and others bring this original action
challenging the validity of the ballot title to proposed Amendment
8, which would allow the establishment of up to eleven gambling
casinos in the state, and legalize lottery, charitable raffles, and
bingo games in the state.  Petitioners generally contend the ballot
title is too long, complex, and detailed to permit a voter to read
and comprehend the proposed amendment and make an informed decision
on the proposal.  Petitioners recognize this court's prior holdings
that length, in itself, does not render a ballot title
insufficient, Christian Civic Action Comm. v. McCuen, 318 Ark. 241,
884 S.W.2d 605 (1994); Parker v. Priest, 326 Ark. 123, ____ S.W.2d
____ (1996).  However, they submit that here, like in Page v.
McCuen, 318 Ark. 342, 884 S.W.2d 951 (1994), the length of the
proposed amendment necessarily caused the proposal's sponsors to
omit important provisions of the proposal when preparing the ballot
title.  Although the proposed Amendment 8 is twenty pages long, and
its sponsors took approximately 550 words in the ballot title to
summarize seventy-five subsections contained in the proposal, we
hold the length alone would not render the title invalid.  However,
we agree that there are numerous material omissions from the ballot
title that clearly prevent a fair understanding of the amendment
and would give the voter "serious ground for reflection" on whether
to vote for the measure.  Id., 344-345.
     Since Page, this court has decided a number of cases dealing
with ballot initiatives and challenges to their validity under
Amendment 7.  The most recent decision is Parker v. Priest, 326
Ark. 123, ____ S.W.2d ____ (1996), where this court summarized, as
follows, the standards of review for ballot titles:  (1) ballot
titles must include an impartial summary of the proposed amendment
that will give voters a fair understanding of the issues presented
and of the scope and significance of the proposed changes in the
law; (2) they cannot omit material information that would give the
voter serious ground for reflection; and (3) they must be free from
misleading tendencies that, whether by amplification, omission, or
fallacy, thwart a fair understanding of the issues presented.  Id.
(citations omitted).
     In Parker, this court refused injunctive relief and allowed a
proposed amendment to remain on the ballot where the ballot title
was 482 words in length, but the title accurately and completely
summarized the text of the proposed amendment.  We further took
particular note that the language used was plain and organized in
a coherent manner, and that no material omissions occurred to make
the ballot title misleading.  Unfortunately, that is not the
situation before us in the present case.
     Petitioners initially point out that proposed Amendment 8
provides for casino gambling in the counties of Boone, Chicot, and
Garland without the voters first being given the right to approve
such gambling at a local-option election.  They further note that
the licensee at each designated site in these three counties are
guaranteed gaming benefits upon the proposal's adoption at the
November 5, 1996 General Election.  However, eight other casino
enterprises are authorized under proposed Amendment 8 only after
approval of the voters of the county or counties where those
enterprises are to be located.  The ballot title fails to mention
this preferential treatment given the three licensees in Boone,
Chicot, and Garland counties, and we believe this omission would
give the voters serious ground for reflection on whether to vote
for the measure.
     Another point concerning the local-option elections is that
the proposed amendment changes existing law by requiring that 20%
of the qualified voters in a county approve casino gambling. 
Presently, Amendment 7 to the Arkansas Constitution requires only
15% of the legal voters of the county to pass a local-initiative
measure.  Petitioners submit that, while the ballot title informs
the voter of the 20% requirement, it fails to disclose that that
percentage is higher than the requirement under Amendment 7.  In
addition, petitioners suggest this change in the law places later
casino applicants at a greater disadvantage than the initial
licensees who are exempt from the local-option requirement
altogether.
     The petitioners cite Bradley v. Hall, 220 Ark. 925, 251 S.W.2d 470 (1952), where this court granted injunctive relief based on the
insufficiency of the ballot title.  There, the title failed to
disclose that the proposed amendment would legalize service charges
and price differentials that previously had been usurious.  The
Bradley court stated the following:
          It is evident that before determining the
     sufficiency of the present ballot title we must first
     ascertain what changes in the law would be brought about
     by the adoption of the proposed amendment.  For the
     elector, in voting upon a constitutional amendment, is
     simply making a choice between retention of the existing
     law and the substitution of something new.  It is the
     function of the ballot title to provide information
     concerning the choice that he is called upon to make. 
     Hence the adequacy of the title is directly related to
     the degree to which it enlightens the voter with
     reference to the changes that he is given the opportunity
     of approving.  Id. at 927   
     In this case, the percentage requirement proposed in Amendment
8 conflicts with the one in our present Amendment 7.  Because the
ballot title fails to convey this change so that the voters could
have a fair understanding of the issue, we conclude this
nondisclosure adds to the title's invalidity.
     A third omission in the ballot title is its failure to reveal
the proposal's definition of "Gross Gambling Revenue."  Proposed
Amendment 8 provides casinos must pay state taxes of 8% on their
gross gambling revenues, and municipal and county taxes of up to 2%
on such revenues.  The definition is of obvious import when
calculating the amount of taxes owed by a licensee.  In this
instance, the proposal defines gross gambling revenues not as the
total (or gross) amount of all monies received from casino gambling
operations, but instead it is defined to be all monies received
from casino gambling less all winnings paid out.  Undoubtedly,
voters could be misled concerning how much of the gambling revenues
would be taxed.  Furthermore, voters also would be confused as to
whether lottery revenues, legalized by proposed Amendment 8, would
be taxed as well.  Under the proposal, they would not, but the
ballot title does not reveal that fact.
     Another serious error in the ballot title concerns its
representation that "no more than eleven licensed casinos may be
simultaneously operated" in the state.  Section 7 of the proposed
amendment makes a fair attempt to restrict the number of licensed
casinos in operation at one time to eleven, but Section 1(D)
authorizes "casino gambling in other constitutional amendments" as
well.  (Emphasis added.)  In other words, if "other" constitutional
amendments include the other initiative proposals on the same
ballot, this Section 1(D) provision conflicts with the existing law
in Amendment 7, which provides as follows:
          If conflicting measures initiated or referred to the
     people shall be approved by a majority of the votes
     severally cast for and against the same at the same
     election, the one receiving the highest number of
     affirmative votes shall become law.
In sum, while Section 1(D) was likely intended only to assure the
continued validity of proposed Amendment 8, regardless of what
happened to other casino proposals offered voters at the November
5 General Election, it is clear Arkansas could well end up with
more than eleven casinos if another gambling proposal besides
proposed number 8 is enacted. 
     Petitioners further urge the ballot title fails to disclose
that proposed Amendment 8 allows its initial licensees to compete
with Oaklawn and Southland by permitting them to engage immediately
in "simulcast sport wagering," but the two existing pari-mutuel
gambling enterprises are not allowed to offer casino gambling until
November 1998.  We agree. Certainly, this unequal edge in treatment
given the new casino licensees is not revealed in the ballot title
and could well make a difference in the voters' decision when
voting on the proposal.
     While petitioners argue more than ten other possible omissions
would mislead the voters when casting their votes for or against
proposed Amendment 8, we see no need to discuss more than the ones
mentioned above.  We summarize much as we did in Page, that the
proposed Amendment 8 sponsors' insistence in covering the
establishment and operation of casino gaming in so much detail can
be said to have sounded the proposal's own death knell.  Page, 318
Ark. at 347.  While Amendment 7 does not limit the length of a
proposal, the proposed measure must be of a size capable of having
a ballot title which will not only convey the scope and import of
the measure, but also impart a description of the proposal so
voters can cast their votes intelligently and with a fair
understanding of the issue.  Id. at 347.  In this respect, we hold
the ballot title now before us fails.
     This is a good point to emphasize our earlier request of the
General Assembly in Page v. McCuen to attempt to establish a
constitutional initiative and referendum procedure that will permit
an early resolution of ballot-title cases.  We stated the
following:
     Until appropriate action is taken to correct the problems
     attendant to proposals submitted under Amendment 7,
     citizens can continue to expect measures to be removed
     from the ballot immediately prior to the election.  This
     court does not enjoy being in the "last-minute" position
     of review.  The people of Arkansas deserve an initiative
     and referendum procedure which allows them the confidence
     that measures, after having been adequately reviewed,
     will not be removed from the ballot.  The sponsors of
     initiative proposals should also be assured their ballot
     titles and proposed measures meet required guidelines and
     rules before they spend their time, energy and monies in
     getting their proposal before the voters.
See also Finn v. McCuen, 303 Ark. 418, 798 S.W.2d 34 (1990), (court
held unconstitutional Act 280 of 1989, which provided by statute an
early procedure to review ballot titles).  The General Assembly
responsibly responded by referring for a vote of the people
proposed Amendment 3 which, if approved by the voters at the
November 5, 1996 General Election, will provide a procedure,
assuring voters that the petitions they sign will actually place
the measure on the next General Election ballot, if the sponsors
obtain the necessary number of signatures.  Meanwhile, under
present law as provided in Amendment 7, we declare the ballot title
to proposed Amendment 8 insufficient and invalid and enjoin its
placement on the ballot, or alternatively that any votes cast on
such proposal not be counted or certified.
     The court shortens the time for issuance of mandate, and
directs that any petition for rehearing must be filed on or before
Friday, October 25, 1996.     
     Doddridge M. Daggett, Special Justice, concurs, and would
further cite as cause for striking Amendment 8 the recent decision
of Parker v. Priest, 326 Ark. 123, ____ S.W.2d ____ (1996), in
which the court stated:
     "They (the drafters of the ballot title) cannot omit
     material information that would give the voter serious
     ground for reflection."
In my opinion, Amendment 8 would create a virtual monopoly, or near
monopoly, for the individuals or entities owning the real estate
onto which casinos can be constructed.  I believe that it is a
serious and fatal omission of material information to not list the
owners of the proposed casinos or the owners of the real estate. 
Casino gambling, and all of the good or bad things that it may
bring to our state, will have a tremendous economic and social
impact upon the citizens of the state.  The citizens are entitled
to know who will profit from this amendment to our constitution.
     Dudley, J., not participating; Brown, J., dissents.

                      Brown, J., dissenting
     Proposed Amendment 4 and Proposed Amendment 8 both authorize
a state lottery, charitable bingo, and casino gambling.  Proposed
Amendment 4 authorizes three casino establishments in Hot Springs
with one adjacent to the Oaklawn Racetrack.  Proposed Amendment 8
authorizes casino gambling at five sites throughout the state,
including the two existing parimutuel tracks, with six additional
sites subject to local-option elections.  This court has approved
Proposed Amendment 4 for the ballot.  Parker v. Priest, 326 Ark.
123, ___ S.W.2d ___ (1996).  It now enjoins placement of Proposed
Amendment 8 on the ballot.  I believe the people should have the
right to choose between these competing proposals.
     In the past, I have voted to strike misleading proposals from
the ballot.  See, e.g., Christian Civic Action Comm. v. McCuen, 318
Ark. 241, 884 S.W.2d 605 (1994) (the term "additional racetrack
wagering" did not sufficiently inform the voters of casino
gambling); Bailey v. McCuen, 318 Ark. 277, 884 S.W.2d 938 (1994)
(misleading language on restriction of legal fees and omission of
standard for review in workers' compensation cases).  The
misleading tendency in those two cases was serious, and the
omissions would have given voters a serious ground for reflection. 
Here, the deficiencies espoused by the majority do not approach
that degree of significance.
     I first question whether the ballot title is misleading with
respect to sites for casino gambling in designated counties versus
local-option counties.  The ballot title reads:
     AUTHORIZING CASINO GAMBLING AS AN APPROPRIATE LAND USE BY
     LICENSEES APPROVED BY THE COMMISSION AT: ONE (1)
     PREVIOUSLY CHOSEN SPECIFIC SITE, AS SET FORTH BY LEGAL
     DESCRIPTION IN THIS AMENDMENT, IN EACH OF BOONE, GARLAND,
     AND CHICOT COUNTIES; THREE (3) ADDITIONAL LICENSES, ONE
     (1) IN PULASKI AT A PREVIOUSLY CHOSEN SITE SET FORTH BY
     LEGAL DESCRIPTION IN THIS AMENDMENT, ONE (1) IN GARLAND
     AND ONE IN MILLER COUNTIES IF APPROVED BY COUNTY LOCAL
     OPTION ELECTIONS; THREE (3) AT-LARGE LICENSES IN ANY
     COUNTY IF APPROVED BY THE COMMISSION AND BY COUNTY LOCAL
     OPTION; AND AT THE TWO EXISTING PARIMUTUEL TRACKS AFTER
     NOVEMBER 1, 1998;
The language appears sufficiently clear and unambiguous.  Casino
gambling is approved in Boone, Garland, and Chicot Counties, as
well as at the parimutuel tracks.  It can also be approved in
Pulaski, Garland (a second site), and Miller Counties by local-
option elections, and at sites in three other counties, also by
local-option elections.  I do not see any confusion here.
     Nor do the other deficiencies asserted qualify as misleading
or as serious omissions:
     --   The ballot title does provide for a local-option election
          upon petition by 20% of the qualified voters in a county. 
          That is a more stringent requirement than the general
          requirement of a petition by 15% of the voters contained
          in Amendment 7 to the Arkansas Constitution.  I see
          nothing amiss in requiring a stricter standard for
          calling local-option elections for casino gambling when
          the standard is disclosed in the ballot title.
     --   The ballot title reveals state taxes on gross gambling
          revenue which the proposed amendment defines as revenue
          to the casino after winnings are paid out.  This seems
          reasonable.  Net revenue would be revenue remaining after
          ordinary expenses (rent, payroll, and so forth) are also
          deducted.  I see nothing fatal to the ballot title in
          this regard.
     --   Proposed Amendment 8 limits the number of casinos to
          eleven.  Language in the proposed amendment allows
          casinos authorized in other constitutional amendments to
          be counted toward that total.  The maximum number is
          still eleven.  This effort to meld Proposed Amendment 8
          to other proposals should not result in its elimination
          from the ballot.  If there is an irreconcilable conflict
          between two amendments that pass, Amendment 7 to the
          Arkansas Constitution provides that the one receiving the
          greater number of votes becomes law.
     --   The proposed amendment allows initial casino licensees to
          offer simulcast gambling immediately which Oaklawn
          Racetrack, at least, is now doing.  Oaklawn and Southland
          must wait to offer casino gambling until November 1998. 
          Presumably, the idea is that it will take time for the
          initial licensees to set up their operations, whereas
          Oaklawn and Southland are already operational.  The
          attempt appears to be to place all operators on an equal
          footing.  I do not find this to be unreasonable or
          necessary for placement in the ballot title.
     In short, I fail to see the serious deficiencies embraced by
the majority.  This is the first instance that I can find where one
competing ballot issue was struck and one was left on the ballot. 
I am reluctant to leave Proposed Amendment 4 on the ballot and
strike Proposed Amendment 8 under these circumstances, where the
litany of deficiencies is so weak.  This court has stated:
     Our most significant rule is that in determining the
     sufficiency of the title we give a liberal construction
     and interpretation of the requirements of Amendment 7 in
     order to secure its purposes to reserve to the people the
     right to adopt, reject, approve, or disapprove
     legislation.
Gaines v. McCuen, 296 Ark. 513, 519, 758 S.W.2d 403, 406 (1988)
(emphasis in original); see also Bailey v. McCuen, 318 Ark. 277,
884 S.W.2d 938 (1994); Plugge v. McCuen, 310 Ark. 654, 841 S.W.2d 139 (1992); Finn v. McCuen, 303 Ark. 418, 798 S.W.2d 34 (1990).
     I respectfully dissent.