Appellate court upholds casino payout law
A state appellate court has upheld a law requiring Illinois casinos earning more than $200 million annually to pay 3 percent of their earnings to racetracks.
The state passed the law in 2006 in a move to save racetracks, but at least $100 million has sat in an untouched bank account while the issue has been tied up in courts.
Four Illinois casinos have been fighting the constitutionality of the law since it passed, but those casinos have continued to pay the tax to an account while awaiting a court ruling.
The most recent suit in the appellate court was filed in January of 2009 by the owners of the state’s four riverboat casinos in Elgin, Aurora and Joliet.
The court ruled in late January that the tax is constitutional, but it is unclear what the next step will be and whether the racetracks, including Arlington Park, will receive the money.
The original law that passed in 2006 sat in limbo in the courts until June 2008 when the Illinois Supreme Court ruled it valid just a few days after the tax had expired.
The state legislature voted to extend the law in December of 2008 through 2011, but it was once again was tied up in courts while the money poured into a bank account out of the hands of the racetracks.
Anthony Somone, executive director of the Illinois Harness Horseman’s Association, told the Daily Herald in May of 2010 that he estimated there was easily more than $100 million in the tax account.
“The industry is on life-support,” Somone said in May. “The reason is, quite frankly, that our product is (terrible). All the best trainers and owners have taken their horses elsewhere because we don’t have purse money to race for.”
In passing the law, the state legislature found that riverboat gambling had damaged the horse racing industry by diverting gambling dollars from the track, according to the appellate court opinion.
The law states that the four casinos, out of the nine in the state, must deposit the money daily for three years into an equity trust fund. The law is set to expire on Dec. 15 or the date when any horse track gets slots or video gambling or when the state’s 10th casino in Des Plaines begins operating.
ŸDaily Herald staff writer James Fuller contributed to this report