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Court upholds tax on casinos

Updated: September 24, 2012 6:25AM

A state appellate court has again upheld a decision by a Will County court that dismissed a lawsuit filed against the state by four northern Illinois casinos.

The casinos — Hollywood Casino-Aurora, Empress (now known as Hollywood Casino) and Harrah’s Casino in Joliet, and the Grand Victoria Casino in Elgin — had argued that a state law that required them to give 3 percent of their adjusted gross receipts to the state’s horse racing tracks was unconstitutional.

According to the appellate court opinion, Public Act 95-1008, signed into law in December 2008, required the state’s riverboat casinos to pay 3 percent of their earnings into the Horse Racing Equity Trust Fund on a daily basis for a three-year period, to be distributed to the horse racing tracks in the state for various purposes.

Casinos with earnings under $200 million were exempt. 

In passing the act, the state legislature found that riverboat gambling had damaged the horse racing industry by luring away gambling dollars and that the 3 percent tax was necessary to reverse the damage.

In January 2009, the four casinos — the only ones in the state with earnings more than $200 million — challenged the constitutionality of the 2008 law. They paid the tax under protest, but sought a permanent injunction against the collection of the 3 percent tax.

The appellate court late last month ruled that the law was constitutional.

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