State Court of Appeals Upholds Mini-Casino Ban

MRSC, June 24, 2003

On June 23, 2003, Division One of the Washington State Court of Appeals in Edmonds Shopping Center Assoc. v. City of Edmonds addressed a challenge to an Edmonds ordinance, presented to the city council through an initiative petition, that prohibited cardrooms and that provided for a phase-out of existing cardrooms. The plaintiff had received a gambling permit from the Washington Gambling Commission to operate an "enhanced" cardroom in Edmonds, allowing the plaintiff to expand its existing cardroom to 15 tables. In February 2000, the plaintiff applied to the city for a building permit for the cardroom expansion, and the city granted that permit in March 2000. In September 2000, the city adopted the challenged ordinance. The plaintiff challenged the ordinance on a number of grounds.

In its decision, the court first rejected the challenge to the prohibition of cardrooms. The court held that the prohibition was a valid exercise of the city's police power authority under article 11, section 11 of the state constitution. The court stated that "there can be no doubt that the regulation of gambling, whether licensed or not, is within the police power specified in article XI, section 11." The court rejected the idea that the city had to provide evidence of a negative effect by cardrooms on the public health and safety. The court then determined that the prohibition was a reasonable means to achieve a legitimate public purpose, particularly since a statute (RCW 9.46.295 specifically authorizes cities and counties to absolutely prohibit any particular type of gambling activity, such as cardrooms. Given the language of RCW 9.46.295, the court also rejected the plaintiff's contention that the city was preempted by state law from enacting a prohibition that effectively revokes a license issued by the gambling commission.

The court, however, held that the city was preempted by state law from requiring the phasing-out of existing cardrooms, with the result that the plaintiff is immediately affected by the prohibition. The ordinance had provided, among other restrictions, that existing cardrooms would be considered a legal nonconforming use but that they would have to cease operations five years after enactment of the ordinance. The court determined that the phase-out requirement and other interim restrictions changed the scope of issued gambling licenses and were thus preempted by RCW 9.46.295. Finally, the court rejected the plaintiff's claim that the prohibition would violate its vested rights, holding that the vested rights doctrine does not exempt a development "from later-enacted police power regulations in furtherance of a legitimate public goal."

It is not known at this time whether the plaintiff will appeal this decision to the state supreme court.