Supreme Court won't hear casinos-vs.-tracks dispute

The U.S. Supreme Court, leaving intact a law that played a role in former Illinois Gov. Rod Blagojevich's ouster, refused to question a state statute that diverts casino revenue to the horse-racing industry.

The justices, without comment, turned away an appeal by four Chicago-area riverboat casinos, including two owned by units of Penn National Gaming Inc. and others owned in part by MGM Mirage and Harrah's Entertainment Inc.

The casinos argued that the law was an unconstitutional taking of private property without compensation. The Illinois Supreme Court upheld the measure, saying the U.S. Constitution's takings clause doesn't apply to government-imposed fees.

The law places a 3 percent surcharge on the four casinos' gross receipts, adjusted to exclude money paid to winning bettors. Under the law, some of the collected money is used to increase horse-racing purses and the rest to subsidize tracks.

The companies said in court papers that they paid more than $75 million during the original two years of the surcharge and may pay $100 million more under a three-year extension enacted last year.

Blagojevich, who signed both the 2006 and 2008 versions into law, was indicted in April on 16 felony counts. The indictment includes an allegation that Blagojevich sought $100,000 in campaign contributions from a racetrack executive before signing the 2008 legislation.

Blagojevich, 52, was impeached by the state's House of Representatives and removed from office after a Senate trial in January.

Illinois Attorney General Lisa Madigan urged the Supreme Court not to hear the appeal, saying the fees are a legitimate condition on the state licenses that let the casinos operate.

The case is Empress Casino Joliet v. Giannoulias, 08-945.