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Casinos have to pay tracks, court rules
That means millions for Arlington Park courtesy of Elgin, Aurora and Joliet boats
By John Patterson | Daily Herald Staff
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Published: 6/6/2008 12:01 AM

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SPRINGFIELD -- Arlington Park is in line to get millions of dollars courtesy of the Empress Casino and other suburban riverboats, thanks to an Illinois Supreme Court ruling Thursday.

The state's high court upheld a 2006 law that taxed the four casinos in Elgin, Aurora and Joliet and sent the money on to prop up the horse-racing industry. For the past two years, a 3 percent tax on those casinos had been in limbo as a lawsuit challenging its constitutionality wound its way through the courts.

The ruling Thursday clears the way for the tracks to get their share of nearly $80 million paid by the casinos into a state account but never distributed. Arlington Park was projected to get $10.8 million a year when the deal was approved two years ago.

An Arlington Park spokesman called the ruling a victory for horse racing but couldn't elaborate on what the track might do with the money other than increase race winnings. Part of the tax money must go toward improvements at the facility.

"We really don't know," said spokesman Thom Serafin.

The court's ruling comes just days after the tax expired. It was a two-year deal -- May 2006 to May 2008 -- designed to boost the horse racing industry. Legislation is pending that would extend the tax until 2011 or until the tracks get slot machines.

Suburban riverboats sued claiming the law unfairly targeted them while sparring five, less lucrative downstate casinos. The tax applied only to those making more than $200 million a year.

A Will County judge agreed last year, tossing out the law and sending the challenge to the Supreme Court.

The state justices, however, dismissed the casinos' argument. Justice Ann Burke, writing the court's opinion, noted the downstate boats take in $6 million a month or less, compared to as much as $40 million a month for the Chicago-area casinos.

"While it may be true that all casinos might be able to incorporate a surcharge into their services and pass the charge along to customers, this does not mean the casinos are identical," Burke wrote.

A spokesman for the parent company of two of the suburban casinos, the Hollywood Casino in Aurora and Empress Casino in Joliet, bemoaned the ruling's OK for the General Assembly to "cherry-pick a handful of businesses to fund another private industry."

"This would be similar to taxing only Chicago-area McDonald's and Burger Kings to subsidize mom-and-pop restaurants in other parts of the state," said Eric Schippers, vice president for Penn National Gaming Inc.

The casino tax requires 40 percent go to the state's five horse tracks. The other 60 percent goes to purses, or prize money for winning horse owners, helping subsidize horse breeding and training.